Cadence Minerals (KDNC) to acquire first interest in Cobalt with investment in Austrian Leogang Project

Cadence Minerals Plc (AIM: KDNC), the AIM quoted listed resources investment company, advises that it has signed a binding Memorandum of Understanding with Australian- listed Clancy Exploration Limited to earn into an initial 10% interest, with an option to increase its interest to 20%, in the high grade Leogang Cobalt-Nickel Sulphide Project in Austria. 

The MOU allows for a period of 14 days for Cadence to complete the necessary due diligence and obtain the necessary board and regulatory approvals.

Full technical details, maps and diagrams on the Project are detailed in the News Release made on 15 June 2017 by Clancy and are available their website [Insert link]. The following is summarised from the Clancy News Release.

Highlights:

·      Cadence to acquire a 10% direct interest in the Leogang Project by issuing Clancy 73,750,000 Cadence shares.

·      Cadence has a six-month exclusive option to acquire a further 10% interest in the Leogang Project by paying Clancy a further A$1 million that can either be paid in cash or Cadence shares at the time of exercising its option, or a combination of at Cadence’s election.

·      High grade cobalt-nickel-copper rock chip sampling Includes: 

·      Nockelberg Historical Mine: 

Ø Sample 1: 3.9% Cobalt, 1.55% Nickel & 2.19% Copper 

Ø Sample 2: 3.6% Cobalt, 4.38% Copper 

Ø Sample 3: 1.95% Cobalt, 2.35% Nickel & 3.59% Copper 

Ø Sample 4: 2.75% Cobalt, 2.36% Nickel & 3.19% Copper 

Ø Sample 5: 4.65% Cobalt, 3.14% Nickel & 12.7% Copper 

·      Leogang Historical Mine:

Ø Sample 6: 11.67% Cobalt, 6.52% Nickel & 3.82% Copper 

Ø Sample 7: 15.76% Cobalt, 8.12% Nickel & 4.91% Copper 

·    Substantial ground holding covering 80km² secured.

·    No modern exploration completed to date – Airborne magnetic survey to be flown this year.

Andrew Suckling, Cadence Mineral’s Executive Chairman stated: “Cobalt, lithium and Rare Earth Elements, have been identified as key strategic minerals in the rapidly expanding electric vehicle (“EV”) market with cobalt in particular facing the challenge of limited current reserves. UBS estimated that in a 100% EV world there would be a 1,928% incremental demand in cobalt, which is second only to a 2,898% incremental demand in lithium.

“In Europe, the electric vehicle market is forecast reach penetration rates of around 30% by 2025. Cobalt and lithium are critical to current battery chemistry and supply will have to increase substantially over the coming years.

“Cadence believes that, like the Cinovec lithium project, in which we have a 21% interest, the Leogang Project is a potentially important and strategic source of Cobalt in the heart of Europe’s new battery manufacturing region”

Leogang Cobalt-Nickel Sulphide Project:

Clancy has been granted exploration licences covering approximately 80km² in the Salzburg and Kitzbuhel regions of western Austria incorporating the historic and highly prospective Leogang Cobalt-Nickel Sulphide Project.

This acquisition delivers an exciting land position (80km2) in the prospective dolomite belt in western Austria, with exploration targets generated on several historical cobalt-nickel mines.

·      Nickel and cobalt were mined in the region from the mid-16th century when Leogang was famed for the richness of its cobalt and nickel mineralisation;

·      Mining peaked in the late 1700’s but the market fell away after the Napoleonic Wars;

·      Licences have been targeted to cover each historical mine and further extensions of the host dolomitic mineralisation; and

·      Airborne magnetic survey to be flown this year.

The historical Leogang cobalt-nickel mines are located within the mining friendly but environmentally sensitive jurisdiction of Austria in central Europe where infrastructure is particularly well established. These polymetallic mines were in operation mainly in the 16th and 17th centuries, and occasionally until the first half of the 20th century. At the end of the 16th century, they were famous in Europe for their production of cobalt.

Old workings and mineralised outcrops extend over 2 km strike, and ancient documents refer to other mine workings and mineralisation occurrences in the region. No modern exploration has been carried out.

The initial exploration program will comprise an airborne geophysical survey, detailed geological mapping and geochemical sampling: all will have minimal impact on the local community and involve no ground disturbance.  Survey quotes have been received for a program to cover the entire 80km².  The quotes include mobilisation and demobilisation, data acquisition, data processing and reporting and are approximately A$250,000.

Location and access:

The former mines of Leogang exist the community of Hutten, some 75 km south of Salzburg.

Historical background:

The recovery of stone and bronze miner’s hammers by archaeologists at Leogang supports mining in Prehistoric times.  However, documented mining began in 1550 with the first map of Schwarzleo dated 1671. Nickel and cobalt ore at Nockelberg were mined from the 17th Century, and three maps displaying mining activity are dated 1761, 1790 and 1794. At the end of the 16th Century, Leogang was known and famous in Europe for its richness in cobalt and nickel ores. The mined cobalt was utilised for the preparation of blue colours, but the market sank after the Napoleonic Wars and the Nockelberg mine came to a standstill by the end of the 18th Century. During the 19th Century, sporadic mining was performed between 1852-1860 and 1871-1885, and again but to a lesser extent in the first half of the 20th Century.  Part of the former Leogang mines is now a regional mining museum.

Geology:

Austria covers an area of some 84,000 km2 in central Europe, with E-W and N-S extensions of 550 km and 300 km, respectively. The Eastern Alps and the Danube River are the most prominent features of the Austrian landscape. The Bohemian Massif occupies the northern part of the country. To the south, are the Molasse, Helvetic and Penninic Zones. Further south, the Austro-Alpine Unit underlies the most mountainous parts of Austria and comprises the Central Zone of the Eastern Alps and the Northern Calcareous Alps where the Leogang project is located. The polymetallic mineralization is hosted within upper Silurian to middle Devonian aged dolomites.

Mineralisation:

The mineralisation is hosted almost exclusively by dolomite, and is often associated with over thrusting where the dolomite failed during faulting promoting the circulation of hydrothermal fluids. The mineralisation is of three main types:

·      Quite intense and strong when overthrust related.

·      Rather low when associated with shear zones.

·      Rather low when related to small faults or stratification.

Mineralisation was mined in three main areas: Inschlagalm, Nockelberg and Schwarzleo

Historical Production:

Past production records for the area are scarce.  Those that have been obtained from the Schwarzleo mining museum are shown as follows:

Note: Coordinates provided are in UTM WGS84 Projection.

High grade rock chip samples reported include (Haditsch & Mostler, 1970):

Note: Coordinates provided are in UTM WGS84 Projection.

Tenure:

The basis of Austria’s mining law is the Mineralrohstoffgesetz (MinroG) (Federal Law BGBl. I no. 38/1999) which came into effect in 1999. As of the end of 2012, the MinroG had been amended by several Federal Laws. The MinroG applies to the exploration for, production of, and processing of minerals in the country.

Three environmental laws are directly applicable to mining and other mineral production and processing operations in the country.

According to the MinroG, Austrian mineral resources are divided into three main categories:

·    Bergfreie – For resources in this category, the holder of the mining license has ownership of those minerals in the deposit for which the holder has a license to mine. The mineral raw materials in this category are metallic ores; oil shale; and many industrial minerals.

·    Bundeseigene – The resources in this category are state owned, no matter who is awarded a license to extract and produce them. Mineral fuels, such as oil and natural gas, and related materials, such as uranium, are included under this classification.

·    Grundeigene – The resources in this category are owned by the owner of the land. They include the stone, sand, and gravel not included in the first category and feldspar.

In late 2012, the Government founded an “Austrian Raw Materials Alliance” to ensure a secure supply of raw materials for the country in the long-term future.

Clancy has been granted exploration licences (Schurfberechtigung) over the relevant area.  Exploration licences grant the holder the exclusive licence to explore and are valid for five calendar years (including the year of application) and can be extended for a further five years if the exploration program has been carried out according to a program approved by the mining authorities. However, the right to conduct mining operations are not included in an exploration licence. For these activities a mining licence (“Bergwerksberechtigung”) has to be obtained which is a separate legal process.

Competent Persons Statement:

The information in this announcement that relates to the historical Exploration Results is based on information compiled and fairly represented by Jonathan King, who is a Member of the Australian Institute of Geoscientists and a consultant to Clancy Exploration Ltd. Mr King has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he has undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr King consents to the inclusion in this report of the matters based on this information in the form and context in which it appears. 

– Ends –

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

About Cadence Minerals:

Cadence is dedicated to smart investments for a greener world. The planet needs rechargeable batteries on a global scale – upcoming supersized passenger vehicles, lorries and buses – require lithium and other technology minerals to power their cells. Cadence is helping find these minerals in new places and extracting them in new ways, which will meet the demand of this burgeoning market. With over £35 million vested in key assets globally, Cadence is helping us reach tomorrow, today.

Cadence invests across the globe, principally in lithium mining projects. Its primary strategy is taking significant economic stakes in upstream exploration and development assets within strategic metals. We identify assets that have strategic cost advantages that are not replicable, with the aim of achieving lower quartile production costs. The combination of this approach and seeking value opportunities allows us to identify projects capable of achieving high rates of return.

The Cadence board has a blend of mining, commodity investing, fund management and deal structuring knowledge and experience, that is supported by access to key marketing, political and industry contacts. These resources are leveraged not only in our investment decisions but also in continuing support of our investments, whether it be increasing market awareness of an asset, or advising on product mix or path to production. Cadence Mineral’s goal is to assist management to rapidly develop the project up the value curve and deliver excellent returns on its investments.