Since closing its acquisition of the South Crofty tin project in Cornwall in July 2016, Strongbow Exploration (TSXV: SBW) has wasted little time laying the groundwork to put the former underground mine back into production.
South Crofty was the last tin mine to close in the U.K. in 1998 and has a mining licence valid until 2071.
Last year the company secured a water discharge permit to dewater the flooded mine workings, and in January this year completed the sale of a 1.5% net smelter return royalty to its largest shareholder, Osisko Gold Royalties (TSX: OR; NYSE: OR), which owns about 28% of the company. The $7.17 million in proceeds from the NSR will be spent on building a water treatment plant.
In May, the company told shareholders of its plans for a dual listing on the AIM Market of the London Stock Exchange, and this week signed a financing and offtake agreement with Orion Mine Finance.
The financing deal is contingent on the AIM listing and an equity investment of no less than US$3 million in Strongbow's common shares by Orion's OMF Fund II H (OMFFII).
Under the agreement, OMFFII will purchase tin warrants from the London Metal Exchange representing refined tin equal to 5% of South Crofty's production over a ten-year period.
Richard Williams, Strongbow's president and CEO, said in a news release that the agreement was a "further endorsement" of the tin project, which he described as "one of the highest grade tin resources globally."
The mine "is well placed to deliver 'clean tin' to end users seeking to secure supply that is conflict free, does not exploit child labour, and does not have a negative environmental impact," he added.
Soft Crofty will be dewatered in stages. Phase I will dewater from surface to 350 metres below surface; Phase 2 down to 730 metres below surface; and Phase 3 to the bottom of the mine, 870 metres below surface.
Production from the mine dates to 1592.
Strongbow has an experienced board of directors. Its chairman, Grenville Thomas, is a member of the Canadian Mining Hall of Fame and founded Aber Resources. Patrick Anderson, a director, is the co-founder and former CEO of Aurelian Resources and more recently the CEO of Dalradian Resources, which Orion Resource Partners acquired last month.
Dalradian's key asset was the Curraghinalt gold project in northern Ireland.
In Toronto, Strongbow's shares are trading at 17.5 ? apiece within a 52-week trading range of 10 ? and 28 ?. The company has about 86.6 million shares for a market cap of $15.2 million.