Mr. Patrick Anderson reports

CORNISH METALS RELEASES AUDITED FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE PERIOD ENDED DECEMBER 31, 2023

Cornish Metals Inc. has released its annual audited financial statements and management's discussion and analysis (MD&A) for the period ended Dec. 31, 2023. The reports are available under the company's profile on SEDAR+ and on the company's website.

Highlights for the period ended Dec. 31, 2023, and for the period ending March 20, 2024:

• Refurbishment of New Cook's Kitchen (NCK) shaft has commenced ahead of schedule:
  • Rephasing shaft refurbishment will improve the functionality of NCK shaft and enable larger equipment to access the mine at an earlier stage in its redevelopment (news release dated March 3, 2024).
• Commissioning of the water treatment plant (WTP) completed at the end of October, 2023:
  • Discharge of treated water to the Red River commenced in early November, 2023, in accordance with permitted standards;
  • Dewatering of the mine progressed well with water levels drawing down as expected. The rate of dewatering has been reduced to allow shaft refurbishment and dewatering to proceed concurrently (news releases dated Jan. 17, 2024, and March 3, 2024).
• Updated mineral resource estimate (MRE) for South Crofty mine released in September, 2023:
  • 31.6-per-cent increase to contained tin in the indicated mineral resource category for the lower mine (news release dated Sept. 13, 2023).
• Drill program to collect samples for metallurgical test work as part of the South Crofty feasibility study completed in June, 2023:
  • Visible tin mineralization confirmed in all 28 drill holes with assay results reported (news release dated July 3, 2023);
  • Ore sorting test work completed with excellent results from X-ray transmission (XRT) confirming the potential to materially reduce tonnes milled, and reduce process plant capital and operating costs (news release dated Oct. 8, 2023).
• Drill program started at the Wide Formation target in the Carn Brea exploration area (news release dated Sept. 19, 2023):
  • Drill results from the first six holes confirm the Wide Formation structure over a 1.6-kilometre strike length;
  • A new mineralized structure has been identified lying directly beneath the Great Flat lode and several high-grade, steeply dipping tin zones (news release dated Feb. 4, 2024).
• Shaft reaccess work completed in readiness for commencement of refurbishment of NCK shaft:
  • South headframe above NCK shaft remediated with installation of new sheave wheel;
  • New temporary egress headframe arrangement installed inside the existing north headframe;
  • South winder building refurbished with new exterior cladding and associated civil works for accommodating new winding apparatus;
  • Main and auxiliary drum winders installed and commissioned.
• Work on the feasibility study continues and is well under way:
  • Preliminary economic assessment (PEA) expected to be published in second quarter 2024 to provide interim guidance ahead of the publication of the feasibility study (news release dated Jan, 17, 2024).
• Fifteen-month power supply contract agreed for the provision of 100 per cent renewably generated power thereby providing certainty over power costs during the mine dewatering phase (news release dated July 18, 2023).
• Cornish Metals chief executive officer Richard Williams will depart the company effective on March 31, 2024, when he will also leave the company's board (news release dated March 15, 2024):
  • Mr. Williams will remain available to the company on a consulting basis going forward;
  • Ken Armstrong, a non-executive director, will be appointed as interim CEO and Patrick Anderson, chairman of the board, will become the executive chairman of the company during the transition.
• Samantha Hoe-Richardson joined the board as independent non-executive director effective Jan. 8, 2024 (news release dated Jan. 8, 2024).

Mr. Anderson, executive chairman of Cornish Metals, stated: "The Cornish Metals team made excellent progress in 2023, achieving several important milestones, in particular, the construction and commissioning of the water treatment plant, further derisking South Crofty, and advancing the project closer towards a construction decision. On behalf of the board of directors I want to thank Richard for the many achievements he made and obstacles overcome to bring the company and the South Crofty Project to where it is today.

"Two thousand twenty-four is shaping up to be another busy year for the company with mine dewatering and the refurbishment of NCK shaft progressing to deeper levels of the mine. The South Crofty PEA is nearing completion and we look forward to reporting the updated mine plan and project economics in Q2 this year. We are also excited by the ongoing Wide Formation drilling program, with results to date confirming our model that this represents a new, large-scale, tin-bearing exploration target lying beneath the historically mined Great Flat lode, demonstrating the exploration upside of this area, which we view as having substantial potential to add to our current mineral resource base at South Crofty.

"We appreciate the continued support of our shareholders, the local community and other stakeholders."

Review of activities

Updated mineral resource estimate released for South Crofty mine

An updated MRE for South Crofty mine, prepared in accordance with the requirements of the JORC Code (2012 edition), was released on Sept. 13, 2023. This updates and supersedes the MRE published on June 9, 2021.

Since the 2021 MRE, the company's geological team has continued to digitize and incorporate historic assay data into the mineral resource model for the lower mine. Furthermore, confirmation of existing structures at depth through the recent metallurgical drilling program (as described below) has been incorporated into the updated MRE.

The updated MRE for the lower mine area of South Crofty mine reports a:

• 39-per-cent increase in tonnes and 31.6-per-cent increase in contained tin in the indicated mineral resource category from the 2021 MRE;
• 35.6-per-cent increase in tonnes and 15.5-per-cent increase in contained tin in the inferred mineral resource category from the 2021 MRE.

The updated MRE for the tin-only lower mine is summarized herein.

The mineral resource estimate for South Crofty is available in a report titled "South Crofty Tin Project -- Mineral Resource Update NI 43-101 Technical Report," dated Oct. 27, 2023, co-authored by N. Szebor (MCSM, MSc, BSc, CGeol, EurGeol, FGS) and R. Chesher (FAusIMM(CP), RPEQ, MTMS) of AMC Consultants, and can be accessed on the company's SEDAR+ page.

The majority of new mineral resources are contained within the central part of the mine in No. 1, No. 2, No. 3, Main, Intermediate, North and Great lodes following digitization and modelling of historic data.

The updated MRE for the lower mine area is reported using a 0.6 per cent tin cut-off grade, the same cut-off grade applied in the MREs prepared in 2016 and 2021. The updated MRE was prepared by the company's geological team and independently reviewed and verified by AMC Consultants.

The lower mine area contains tin mineralization within quartz-tourmaline vein or lode structures, which are hosted entirely within granitic rocks. The major lode structures that comprise the updated MRE remain open along strike and to depth.

Mineral resources for the upper mine area of the South Crofty updated MRE were reported accounting for a recalculation of tin equivalent grades due to changes in metal prices since the 2021 MRE was published (refer news release dated Sept. 13, 2023).

Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues.

The updated MRE will be incorporated into the mine plan to be included in the feasibility study as described below.

Commissioning of water treatment plant at South Crofty and commencement of dewatering

The construction of the WTP at South Crofty involved various enabling works, including completion of the treated water discharge duct from the WTP, various roadways and the concrete foundation pad for the WTP itself. Pipelines carrying water from the submersible pumps in NCK shaft to the WTP were also laid along with electrical and communication systems.

The WTP comprises nine reaction tanks for altering the chemical properties to precipitate the various metals out of solution, and six inclined plate settling tanks (lamella clarifiers) to remove the precipitated solids. At the back end of the WTP, a sludge storage and thickening system has been installed, consisting of storage tanks for unthickened and thickened sludge and a deep cone thickener to thicken the sludge.

At the mine end is a building housing the high-voltage power supply/substation and the variable speed drives (VSDs) required to operate the pumps. A new power supply contract (refer below) provides the 11-kilovolt power supply needed. At the WTP end, a large motor control centre and automation system were installed in a new building, which National Grid connected to its network with another new substation.

A hydro-turbine has been added ahead of the discharge point that is generating up to 20 per cent of the electricity required to operate the WTP. Other renewable energy opportunities are also being explored.

Wet commissioning of the WTP was completed during September and October, 2023. After successful commissioning, the WTP was officially opened on Oct. 26, 2023, with discharge of treated water to the Red River commencing in early November, 2023. The treated water exceeds the company's permitted standards set by the environment agency for its discharge into the Red River. Dewatering of the mine progressed well with the water level drawing down as expected. With the commencement of refurbishment of NCK shaft (as more fully described below), the rate of mine dewatering has been reduced, with the water level being maintained, to allow shaft refurbishment and dewatering to proceed concurrently. Mine dewatering and shaft refurbishment are expected to be complete by September, 2025.

Installation of submersible pumps and commissioning of variable speed drives

Two submersible pumps manufactured by KSB in Germany have been installed in NCK shaft for the first stage of the two-stage mine dewatering program. The pumps are specialist high-head, vertical pumps that are controlled by VSDs to enable the 25,000-cubic-metre-per-day pumping rate to the WTP to be maintained as the water level drops and the pumping head increases. The VSDs were manufactured by Schneider Electric and supplied by Siemag Tecberg U.K.

The pumps were installed in NCK shaft in mid-2023. Commissioning teams from Siemag Tecberg U.K. and Schneider Electric were on site for testing the pumps and VSDs that were successfully commissioned and ran through a series of performance tests to demonstrate their ability to meet the target flow rate to the WTP.

The pumps were initially lowered to approximately 360 metres below surface and suspended from 120 three-metre-long pipes that form the temporary rising main. When the water level reaches the level at approximately 360 metres below surface, a permanent set of pumps will be installed at that level. The submersible pumps will then be lowered to approximately 730 metres below surface for the second stage of dewatering.

Since the commencement of the dewatering of the South Crofty mine (refer above), the pumps have been pumping mine water from approximately 360 metres below surface to the WTP from where the treated mine water is discharged to the Red River.

Execution of power supply contract for South Crofty

In July, 2023, South Crofty entered into a 15-month supply contract with NPower for the provision of 100 per cent renewably generated power. The supply contract allows South Crofty to advance through the mine dewatering phase with certainty over the power costs for the next 15 months. This added certainty is an important financial consideration given the power price volatility seen over the last two years.

Preparation for reaccessing New Cook's Kitchen shaft

Two single drum winders were ordered for the shaft reaccess work, with the primary access winder supplied by Siemag Tecberg U.K. and an emergency egress winder provided by Zitron SA. These winders will enable NCK shaft to be reaccessed once dewatering activities have sufficiently progressed. Both winders arrived on site by the beginning of November, 2023, and have been installed and commissioned in December, 2023, and January, 2024, respectively.

The south headframe sitting above NCK shaft has been remediated and strengthened as required. New sheave wheels and associated apparatus have been ordered to replace the originals which were beyond economic repair. The South Winder house, housing the primary access winder, has been remediated with its structural steelwork checked and refurbished, and new exterior cladding erected. The secondary egress winder has been housed in a new temporary winding house which was erected in October, 2023.

Pump and pipe handling infrastructure has also been installed around the headframe to facilitate the lowering of the pumps and pipes and subsequent dewatering activities.

Refurbishment of New Cook's Kitchen shaft

After assessment of the condition of the timbers in NCK shaft, refurbishment of the shaft has commenced ahead of schedule (refer to news release dated March 3, 2024). Rephasing shaft refurbishment will improve the functionality of NCK shaft, enable larger equipment to access the mine at an earlier stage in its redevelopment and ensure that high health and safety standards are applied as the underground mine workings are accessed.

As stated above, shaft refurbishment and mine dewatering will proceed concurrently and are expected to be complete by September, 2025. The rephasing of shaft refurbishment is expected to have no impact on the overall South Crofty project development timeline and there is no anticipated impact on the overall cost of reopening South Crofty arising from this rephasing.

Metallurgical study drill program at South Crofty

A metallurgical drill program as part of the feasibility study was completed between July, 2022, and June, 2023. The program was designed to collect samples for various metallurgical studies, including XRT ore sorting, flowsheet optimization and paste backfill studies. This test work should allow acceleration of the feasibility study in advance of dewatering the mine and will provide key information for the mineral processing flowsheet.

The program comprised 10,312 metres of diamond drilling with three drill rigs contracted from Priority Drilling Ltd., under the supervision of the company's geological team.

Samples were collected from the North Pool zone (eastern section of mineral resource), the No. 4 and No. 8 lodes (central part of the mineral resource), Roskear, and Dolcoath South (western part of the mineral resource). These five main lodes/mineralized zones contain the majority of the mineralized material anticipated to be processed during the first six years of the proposed mine life.

The metallurgical drill program comprised 14 parent and daughter drill holes targeting No. 4 and No. 8 lodes, and 14 parent and daughter holes targeting the Roskear lode. Visible tin mineralization was observed in all 28 drill holes. Three holes from each lode were assayed for base metals and associated elements and the rest of the drill intercepts were used for metallurgical studies. The assay results were reported in the news release dated July 3, 2023.

Four parent and 29 daughter holes targeting the North Pool zone and the Dolcoath South lode, respectively, were also completed.

Metallurgical test work results

The metallurgical test work was conducted on samples from the metallurgical drill program (as more fully described above) across five mineralized zones (North Pool zone, No. 4 and No. 8 lodes, Roskear, and Dolcoath South), representing the majority of the potential production areas in the first six years of the proposed mine life.

XRT ore sorter test work of bulk composite samples was completed by TOMRA Sorting GmbH. Heavy liquid separation (HLS) test work of bulk composite samples was completed by Wardell Armstrong International.

Both XRT ore sorting and HLS preconcentration test work yielded excellent results:

• XRT: 55 per cent of mass rejection with less than 3 per cent of metal loss (minus 50 mm (millimetres) to plus 15 mm size fraction);
• HLS: 50 per cent of mass rejection with less than 5 per cent of metal loss (minus 15 mm to plus 0.85 mm size fraction).

The metallurgical test work results confirm the potential to materially reduce tonnes milled and reduce process plant capital and operating costs as well as the associated environmental footprint. The test work results are being incorporated in the feasibility study as described below.

Preparation of feasibility study

Good progress is being made in advancing the South Crofty feasibility study with a substantial amount of the study completed. All study components, with the exception of infill drilling, are expected to be finalized by the end of June, 2024.

The feasibility study continues to progress, or has completed, the following activities:

• Geotechnical test work -- televiewer investigations and geotechnical rock testing completed on the primary mining areas by RobertsonGeo to confirm known historical structural and rock mass property data;
• Headframe structural modelling and refurbishment completed by IMEC and Entech Mining/RSV Group;
• Concept numerical modelling of the proposed underground mining methods and stope designs completed by MiningOne;
• Phase 1 of the metallurgical test work program completed by Wardell Armstrong (mineralogy, physical competency, characterization XRT, heavy liquid separation and gravity response test work). Phase 2 of the test work program (flowsheet development) is progressing well;
• Ground investigations for the new mineral processing plant completed by AGS Ground Solutions;
• Mineral processing plant design and layout in advanced stages by Fairport Engineering, incorporating the results of the metallurgical test work program and potential future throughput expansions;
• Underground mine design and optimization completed using the September, 2023, South Crofty updated MRE;
• Concept mine ventilation study, underground infrastructure design and hoisting analysis completed;
• Concept engineering on paste backfill options and sighter test work completed by Paterson & Cooke (U.K.);
• Feasibility-study-level engineering design for the paste backfill plant is under way;
• Hydrogeology (Piteau Associates), environmental, social, closure (SLR Consulting) and market studies (Project Blue and CRU Group) completed;
• AMC Consultants (U.K.) has been commissioned to review and provide overall feasibility study sign-off.

Exploration drill program at Carn Brea South

A 9,000-metre exploration drill program commenced at the Wide Formation target in the Carn Brea South exploration area. The drill program is designed to test the geometry and the continuity of tin mineralization within the recently discovered Wide Formation target (refer news release dated Jan. 10, 2023).

The mineralization style in the Wide Formation, comprising pervasive tourmaline and quartz (termed blue peach), is similar in character to that associated with No. 8 lode, one of the most prolific tin-producing lodes in the latter years of operation of the South Crofty mine. The drill program is testing an area measuring 2,500 metres along strike (northeast to southwest) and 500 metres down dip (north to south).

Drill results from the first six holes (refer to news release dated Feb. 4, 2024) confirm the Wide Formation structure over a 1.6 km strike length, a down-dip extent of at least 525 metres and thicknesses ranging from 1.8 metres to 4.8 metres. The structure remains open. Notable tin intercepts from the Wide Formation include 1.21 metres grading 0.87 per cent Sn in CB23_004.

Drilling also identified a new mineralized structure lying directly beneath the Great Flat lode splay, and several high-grade, steeply dipping tin zones between the Great Flat lode and the Wide Formation. Notable tin intercepts from the newly identified Great Flat lode splay include 3.38 metres grading 1.01 per cent Sn in CB23_002.

Notable tin intercepts from multiple steeply-dipping, high-grade tin zones mainly intersected between the Great Flat lode and the Wide Formation including 3.09 metres grading 1.21 per cent Sn in CB23_001.

To date, nine drill holes (totalling approximately 6,119 metres) have been completed.

Departure of CEO, Mr. Williams

On March 15, 2024, the company announced the departure of CEO, Mr. Williams, effective on March 31, 2024, when he will also leave the company's board. Mr. Williams will remain available to the company on a consulting basis going forward. Mr. Armstrong, a non-executive director, will be appointed as interim CEO and Mr. Anderson, chairman of the board, will become the executive chairman of the company during the transition and search for a permanent CEO to lead the company through the next stage of development of South Crofty as the company moves toward construction.

Appointment of Ms. Hoe-Richardson as independent non-executive director

On Jan. 8, 2024, the company announced that Ms. Hoe-Richardson joined the board of directors as an independent non-executive director (refer to news release dated Jan. 8, 2024). Ms. Hoe-Richardson is an experienced non-executive director from a global mining, infrastructure and insurance background. She is currently a non-executive director of Kew Soda Ltd., Assured Guaranty U.K. Ltd., Ascot Underwriting Ltd., 3i Infrastructure PLC, and an independent adviser on climate change and sustainability to Laing O'Rourke. Ms. Hoe-Richardson was head of environment and sustainable development at Network Rail until 2017 and prior to that spent 16 years at Anglo American PLC, latterly as head of environment. She previously worked in investment banking and audit. Ms. Hoe-Richardson holds a masters degree in nuclear and electrical engineering from the University of Cambridge, and is also a non-practising chartered accountant.

• Increase in operating costs impacted by higher insurance costs attributable to more site-based activities primarily relating to the construction of the WTP, related dewatering and NCK shaft reaccess work;
• Interest income of $1.7-million benefited from increased interest rates being received on higher cash balance following the offering;
• Cash refund received of $168,112 relating to research and development tax credit arising from South Crofty drill program completed in 2020, with further applications under way for subsequent activities;
• Expenditure of $14.8-million incurred during the period on the construction of the WTP and related dewatering equipment, as well as new or replacement equipment for the mine;
• Dewatering costs of $1.3-million incurred since October, 2023, for power, reagents, sludge disposal and maintenance of the WTP;
• Other project-related costs of $10.6-million incurred during the period relating to the advancement of South Crofty to a potential construction decision, primarily for the metallurgical drill program, the feasibility study, and planning activities for dewatering and NCK shaft reaccess;
• Costs of $1.2-million incurred for the continuation of the exploration program at Carn Brea which recommenced in June, 2023;
• Recognition of foreign currency translation gain of $2-million for those assets located in the United Kingdom when translated into Canadian dollars for presentational purposes.

The company changed its financial year end from Jan. 31 to Dec. 31 to better align the company's financial reporting periods to that of its peer group in the mineral resources sector. In addition, the calendar year-end coincides with traditional financial, taxation and operational cycles. The change in year-end takes effect from Dec. 31, 2023, with the result that the current period of reporting is the 11 months ended Dec. 31, 2023. The comparative period of reporting is the 12 months ended Jan. 31, 2023.

Outlook

As described above, the company is advancing the South Crofty tin project to a potential construction decision. The company's objectives are as follows:

• Dewater South Crofty mine and refurbish NCK shaft by September, 2025;
• Publish a PEA for South Crofty in the second quarter of 2024;
• Complete a feasibility study with the outcome of the PEA providing guidance for the timing for the completion of the feasibility study and outstanding work programs;
• All study components of the continuing feasibility study, with the exception of infill drilling, expected to be completed by the end of June, 2024;
• Complete the 14-hole/9,000-metre Wide Formation exploration drill program;
• Commence basic and detailed engineering studies, construction of the processing plant, refurbishment of underground facilities, and other on-site early works.

The follow-up exploration drill program at the Wide Formation target at Carn Brea South will also continue subject to the receipt of satisfactory drill results.

Subject to the availability of financing, consideration will also be given to continuing with the company's exploration program at United Downs and evaluating other high-potential, exploration targets within transport distance of the planned processing plant site at South Crofty.

The company continues to target first tin production from South Crofty mine by the end of 2026, subject to securing project financing.

About Cornish Metals Inc.

Cornish Metals is a dual-listed company focused on advancing the South Crofty high-grade, underground tin project through to a construction decision, as well as exploring its additional mineral rights, all located in Cornwall, United Kingdom.

Technical information

The technical information in this news release has been compiled by Owen Mihalop who has reviewed and takes responsibility for the data and geological interpretation. Mr. Mihalop (MCSM, BSc (honours), MSc, FGS, MIMMM, CEng) is chief operating officer for Cornish Metals and has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a competent person as defined under the JORC Code (2012) and as a qualified person under National Instrument 43-101. Mr. Mihalop consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

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