Cadence Minerals (AIM/NEX: KDNC) is pleased to provide a corporate update covering the development on the Amapá Iron Ore Project and a restructuring of the Company’s loan notes.
Amapá Iron Ore Project Update
Cadence announced on the 7 June that it had entered into a binding investment agreement with Indo Sino Pte. Ltd. (“Indo Sino”) to invest in and acquire up to a 27% interest in the former Anglo American plc and Cliffs Natural Resource Amapá iron ore mine, beneficiation plant, railway and private port (“Amapá Project”) owned by DEV Mineração S.A. (“Amapá”).
As previously announced Cadence’s investment is conditional, amongst other matters, on the approval of a judicial restructuring plan (“JRP”) submitted by Cadence and Indo Sino to the Sao Paulo Commercial Court in Brazil and the transfer of 99.9% of the issued share capital of Amapá to the Cadence and Indo Sino joint venture company (“JVCo”).
Cadence is pleased to confirm that it has placed US$2.5 million into a judicial trust account of the commercial court of São Paulo. These funds will be held in escrow until the preconditions of the JRP are met, which include the approval of the JRP at a creditors meeting, and the grant of key operational licenses. We currently anticipate that the creditors meeting will occur at the end of August.
Once all the JRP preconditions are met (which mirror the preconditions in our investment agreement with Indo Sino) the US$2.5 million will be released and Cadence will own 20% of the Amapá Project.
In anticipation of the approval of the JRP and completion of the preconditions the JVCo is starting several key workstreams, including updating the mineral resource to current standards, beneficiation plant and mine plan reviews and a preliminary economic study amongst others. We look forward to reporting on these over the coming months.
Further information on the project is available in the Company’s announcement on 21 May 2019
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/KDNC/14082106.html
Further information on the binding investment agreement is available in the Company’s announcement on the 7 June 2019
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/KDNC/14102294.html
Restructuring of Loan Notes
Cadence announced on the 24 November 2018 that it had refinanced its outstanding loan notes by entering into a US$4.87 million amortising loan note with a consortium of institutional lenders, which was due to be fully repaid on the 1 December 2019 (“Amortising Loan Note”). At the date of publication, the outstanding principle balance of the Amortising Loan Note is US$2.23 million.
Cadence has completed the restructure of two of the three outstanding loan notes with the same consortium of institutional lenders. The two new loan notes will repay US$ 1.19 million of the Amortising Loan Note and have been restructured as a convertible loan note with an exercise price of 0.12 pence and will attract an effective annual interest rate of 7.9% (“Convertible Loan Note”)
Cadence will initially only pay the interest on the Convertible Loan Note until the 1 January 2020, after which 50% of the outstanding balance will be paid back over 8 months (1 August 2020). The outstanding 50% will be paid back on 1 September 2020.
In addition, and to, in part, fund the working capital requirements of the Amapá Project, as outlined above, Cadence has drawn down a further US$ 1.25 million of the Convertible Loan Note under the same terms. After this draw down the outstanding balance on the Convertible Loan Note US$2.44 million. The note is secured over the Company’s assets.
The Company is finalising terms to fund the balance of the Amortising Loan Note, which is anticipated to be on the same terms of the Convertible Loan Note announced today.
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.
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TR-1: Standard form for notification of major holdings
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NOTIFICATION OF MAJOR HOLDINGS (to be sent to the relevant issuer and to the FCA in Microsoft Word format if possible)i |
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1a. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attachedii: |
Cadence Minerals Plc
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1b. Please indicate if the issuer is a non-UK issuer (please mark with an “X” if appropriate) |
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Non-UK issuer |
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2. Reason for the notification (please mark the appropriate box or boxes with an “X”) |
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An acquisition or disposal of voting rights |
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An acquisition or disposal of financial instruments |
X |
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An event changing the breakdown of voting rights |
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Other (please specify)iii: |
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3. Details of person subject to the notification obligationiv |
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Name |
Trafalgar Trading Fund Inc. |
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City and country of registered office (if applicable) |
Cayman Islands |
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4. Full name of shareholder(s) (if different from 3.)v |
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Name |
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City and country of registered office (if applicable) |
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5. Date on which the threshold was crossed or reachedvi: |
08/07/19 |
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6. Date on which issuer notified (DD/MM/YYYY): |
10/07/19 |
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7. Total positions of person(s) subject to the notification obligation |
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% of voting rights attached to shares (total of 8. A) |
% of voting rights through financial instruments |
Total of both in % (8.A + 8.B) |
Total number of voting rights of issuervii |
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Resulting situation on the date on which threshold was crossed or reached |
n/a |
9.07% |
9.07% |
10,546,196,754 |
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Position of previous notification (if applicable) |
n/a |
n/a |
n/a |
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8. Notified details of the resulting situation on the date on which the threshold was crossed or reachedviii |
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A: Voting rights attached to shares |
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Class/type of ISIN code (if possible) |
Number of voting rightsix |
% of voting rights |
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Direct (Art 9 of Directive 2004/109/EC) (DTR5.1) |
Indirect (Art 10 of Directive 2004/109/EC) (DTR5.2.1) |
Direct (Art 9 of Directive 2004/109/EC) (DTR5.1) |
Indirect (Art 10 of Directive 2004/109/EC) (DTR5.2.1) |
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SUBTOTAL 8. A |
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B 1: Financial Instruments according to Art. 13(1)(a) of Directive 2004/109/EC (DTR5.3.1.1 (a)) |
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Type of financial instrument |
Expiration |
Exercise/ |
Number of voting rights that may be acquired if the instrument is exercised/converted. |
% of voting rights |
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Convertible loan note |
01.09.20 |
08.07.19-01.09.20 |
957,033,101.65 |
9.07% |
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SUBTOTAL 8. B 1 |
957,033,101.65 |
9.07% |
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B 2: Financial Instruments with similar economic effect according to Art. 13(1)(b) of Directive 2004/109/EC (DTR5.3.1.1 (b)) |
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Type of financial instrument |
Expiration |
Exercise/ |
Physical or cash settlementxii |
Number of voting rights |
% of voting rights |
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SUBTOTAL 8.B.2 |
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9. Information in relation to the person subject to the notification obligation (please mark the applicable box with an “X”) |
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Person subject to the notification obligation is not controlled by any natural person or legal entity and does not control any other undertaking(s) holding directly or indirectly an interest in the (underlying) issuerxiii |
X |
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Full chain of controlled undertakings through which the voting rights and/or the |
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Namexv |
% of voting rights if it equals or is higher than the notifiable threshold |
% of voting rights through financial instruments if it equals or is higher than the notifiable threshold |
Total of both if it equals or is higher than the notifiable threshold |
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10. In case of proxy voting, please identify: |
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Name of the proxy holder |
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The number and % of voting rights held |
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The date until which the voting rights will be held |
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11. Additional informationxvi |
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Place of completion |
Hong Kong |
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Date of completion |
10/07/19 |
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For further information:
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Cadence Minerals plc |
+44 (0) 207 440 0647 |
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Andrew Suckling |
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Kiran Morzaria |
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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
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James Joyce |
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James Sinclair-Ford |
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Novum Securities Limited (Joint Broker) |
+44 (0) 207 399 9400 |
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Jon Belliss |
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.
Forward-Looking Statements:
Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.