A Cornish mining company is seeking to raise £135m in an attempt to finance the reopening of the historic South Crofty tin mine and end the UK’s reliance on foreign imports.

Cornish Metals, which is backed by the National Wealth fund, is selling shares to major institutional and strategic investors, as well as UK retail investors in a bid to fundraise the amount.

Retail investors will be able to purchase stakes at 60p per share, a deep 41.2 per cent discount to the group’s share price on 13 October. Institutional investors will be able to purchase shares at the same price. Investors must purchase a minimum of £250 worth of shares.

Crunch fundraise

The AIM-listed group warned that the offer will be voided and cancelled if £135m fails to be raised before the sale ends on 10 November. 

The firm previously issued £160m in senior Nordic bonds, but is forbidden from drawing down the funds until it secures at least £123m in new equity fundraising. Completing the offer satisfies this agreement.

Meanwhile, the total estimated capex needed to develop and prepare the tin mine for commercial production is approximately £185m.

The fundraise is expected to cover the bulk of initial costs including constructing modern facilities, redeveloping mine shafts and installing site infrastructure.

The transaction is backed by its shareholders National Wealth Fund, Vision Blue Resources and FTSE 100 listed miner Glencore.

Ending foreign reliance

The South Crofty tin mine has been closed since March 1998, and has been underwater for nearly 30 years.

But the National Wealth Fund, which acts as the government’s state investment arm, fund projects which support net-zero and strengthen domestic supply chains. The fund has already pumped £63.6m into the group to support the reopening of the mine.

Meanwhile, Glencore has committed £11.2m and Vision Blue has invested around £70m.

Tin has been designated a critical mineral, essential for electronics, solar power and AI hardware, with ministers identifying the mine as a “flagship project” and crucial to ending reliance on foreign imports.

Cornish Metals chief executive, Don Turvey, previously estimated the group could extract the metal for £10,800 per tonne, a substantial margin from the current global price of £38,200 per tonne.

The mine is expected to produce 4,700 tonnes annually over 14 years if production begins in mid-2028. The National Wealth Fund has previously said the project would create over 300 mining and engineering jobs.