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Mick Davis’ Vision Blue joins backers for Cornish Metals tin mine

South Crofty, about 390km west of London on the Celtic Sea Coast, was the last tin mine in Europe when it closed in 1998. (Image courtesy of Cornish Metals.)

Cornish Metals (LON, TSX-V: CUSN) is getting closer to reopening the South Crofty tin-copper mine in Cornwall, southwest England, as a group of investors, including mining veteran Mick Davis, are injecting £40.5 million ($53.1m) into the company.

Davis’ battery metals investment firm Vision Blue Resources (VBR), whose main strategy is acquiring stakes in assets linked to electric vehicles (EVs) and grid storage growth, has committed £25 million ($33m), Cornish Metals said.

The remaining £15.5 million ($20m) will come from a private placing to existing and new UK institutional investors, as well as existing Canadian investors and eligible accredited private investors, it noted.

The parties involved in the fundraising will get warrants that give them the right to buy shares at Friday’s closing price of 27p over the next three years. If all the warrants are exercised, Cornish Metals will receive a further £60 million ($79m).

Upon closing, VBR will own about 27% of Cornish Metals, which will use the cash to dewater South Crofty and complete the studies needed to take a final construction decision in about 18 months.

“We are excited to embark on this new chapter of Cornwall’s mining history, which will see South Crofty make a significant contribution to the local and UK economy, with the potential to create up to 1,000 direct and indirect jobs, as well being at the forefront of the drive towards net zero,” chief executive Richard Williams said in the statement.

There is currently no primary mine production of tin in Europe or North America and the US has included the metal in a list of minerals considered critical to the country’s economic and national security.

South Crofty could generate up to 5,000 tonnes of tin a year, with first production expected in 2026. The company said the mine will create up to 270 direct jobs and support a further 750 in the region, one of the UK’s most underprivileged.

Securing supply

Mick Davis is a well-known name in the mining industry as he led Xstrata from a $500 million business in the early part of the last decade to an operation so big that — at one point — it made a takeover offer for Anglo American (LON: AAL).

In 2012, he sold Xstrata to Glencore (LON: GLEN) and ventured into setting up X2 Resources, a mining fund that was unable to score any deals in the three years after its launch.

Davis did not get discouraged by that failure. In 2019, he co-founded Niron Metals, an investment vehicle involved in bringing Guinea’s Zogota iron ore deposit into production.

Seeking to seize the opportunity presented by the increasing need for battery metals, which include a host of materials from lithium to nickel, cobalt and copper, Davis launched VBR in December 2020.

The fund has since invested in several companies, including Canada’s NextSource Materials (TSX: NEXT), which is building a graphite mine in Madagascar.

South Crofty has one of the highest-grade tin mineral resources in the world not currently in production and has the potential to be amongst the lowest-cost producers globally.