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Cadence Minerals and the next Commodity Supercycle
There is little doubt that historians will conclude that the global impact of COVID-19 represents the worst crisis since the Great Depression. The pandemic is leaving deep and enduring scars on the global economy, taxing health and medical services to the limit, depriving children of education, while decimating sectors of commerce and industry and in particular leisure and travel.
But history has shown on numerous occasions that the indomitable human spirit has a remarkable capacity for survival and evolution amidst existential crises. As areas such as traditional High St retail and seem to be drawing to a close, sectors such as commodities and mining are booming thanks to a near perfect storm created in part by the COVID crisis.
In October 2020, the IMF stated that the total bill for the global pandemic would reach some $28tn (£21.5tn) in lost output. The rapid intervention by global Governments with rate cuts, looser monetary policies and fiscal stimulus have certainly avoided a financial catastrophe, but at the same time these actions have effectively weakened fiat currencies and increased demand for commodities.
Historically the consequences of such events invariably see a strong recovery in commodity markets. This factor was clearly in evidence as 2020 progressed, and as the COVID noose tightened, prices of commodities such as Iron Ore, Copper and Nickel, along with precious metals including Gold and Silver, all increased in value.
As a consequence, as 2020 progressed prices of commodities such as Iron Ore, Copper and Nickel, along with precious metals including Gold and Silver, all increased in value.
In the wake of the sharp economic contractions in 2020, the IMF forecast that only China was expected to emerge with any economic growth during the year. 2021 is set to be a different story however, and with the vaccine rollout accelerating globally, there are expectations for sharp recoveries across most of the leading economies. Added to this, the new $1.9tn stimulus package in the US from the Biden administration will see heavy investment into ageing US infrastructure. These factors should ensure sustained demand and pricing for iron ore and base metals.
There is also the revolution taking place within the automotive industry to consider. The move towards EV’s is accelerating rapidly, with a plethora of commitments from key automotive manufacturers such as Ford, Volvo, BMW and Jaguar to switch to electric only production in the next few years. This move of course sounds the death knell for the internal combustion engine, but at the same time is driving the cost of battery metals and component commodities such as lithium, nickel, cobalt and graphite
The net effect is that mining, specific commodities and minerals, along with the sector’s nebulous support service industries are undergoing a significant global resurgence. Projects considered uneconomical to develop, and that have remained dormant for years are returning to life, newly financed and fast tracked thanks to the array of modern desktop technologies, data and modelling tools.
Iron Ore
In a note published last December, Goldman Sachs outlined their expectations for another substantial deficit next year (27Mt, GSe), supported by a combination of gradually decelerating China steel demand growth, sharply re-accelerating demand for Western steel and tepid supply growth. GS added that the weighting of the 2021 deficit to the front half of the year points to fundamental support for a sustained price path higher over Q1 and Q2, revising near-term targets for the benchmark 62% iron ore price to 3M $140/t and 6M $150/t.
These numbers of course imply material upside longer term, and GS have also upgraded full year forecasts for 2021 to $120/t ($90/t previously) and for 2022 to $95/t ($75/t previously).
GS sees four core drivers supporting this bullish view:
- Chinese steel production has remained strong & production in 2021 remains supported by a healthy infrastructure and property project pipeline, alongside a resurgence in China’s manufacturing capex cycle and steel exports.
- With construction and heavy industry remaining relatively less affected by second-wave lockdowns, Western steel demand is also recovering ahead of expectations. Significant regional price strength in the US and Europe is likely to spur further blast furnace restarts (and hence iron demand) after an aggressive suspensions phase in 2020 contributed to the current steel supply shortfalls as demand recovers.
- Iron ore supply growth is likely to stagnate in 2021. The limited growth that exists next year is concentrated with Vale Brazil operations, which is why their recent substantive downgrade to production guidance has had such an outsized positive impact on price.
- Chinese mill iron ore inventories remain low, raising the prospect of restocking bursts through the year.
For Cadence Minerals, this bullish outlook for iron ore puts two very firm ticks in the box, firstly for what is widely regarded as the company’s flagship Amapa Iron Ore project in Brazil, and secondly the investment in ASX and TSX listed Macarthur Minerals, with whom Amapa shares numerous infrastructural and evolutionary similarities.
Amapa Project
Bringing a project the size and scale of Amapa back to life has as expected proved to be a complex and challenging process. Nonetheless, DEV Mineração, Cadence and Indo Sino Pty Ltd are reaching a legal settlement with the project creditors, and with the ruling in February by the Commercial Court of São Paulo that port operations and the shipment of iron ore stockpiles can begin, the company is set to take the first practical step towards bringing the project back to life, which will in turn bring benefits to the Amapa region in terms of employment, health and education.
Once the creditor settlement agreement has been signed, an initial $2.5m investment will be released from escrow, meaning that the Pedra Branca Alliance (Cadence & Indo Sino JV co) will own 99.9% of DEV, the owner of the entire Amapa mining and processing assets,. At this point Cadence will proportionately own 20% of Amapa. The next step will involve a further $3.5m investment following the granting of the necessary environmental licenses required to operate the mine, which will see Cadence move to a 27% stake, with an option to increase to 49% once project financing has been raised to complete recommissioning and commence production.
Last November Cadence completed an updated Mineral Resource Estimate for Amapa, which increased the 2012 Anglo American MRE estimate by 21% to 176.7 million tonnes (“Mt”) grading 39.7% Fe in the Indicated category. With a production capacity of 5.3Mt per annum, the survey also noted there was significant potential to increase the resource base after the completion of metallurgical and optimisation studies.
Lake Giles Iron Project
Cadence also has a stake (c1%) in ASX and TSX listed Macarthur Minerals, owner of the Lake Giles Iron Project near Kalgoorlie in Western Australia. The Lake Giles project consists of the Moonshine magnetite deposit and the Ularring hematite deposit, which together have an indicated Mineral Resource Estimate of 218Mt grading 27.5% Fe in the Indicated category.
Lake Giles and Amapa share many similarities in regard to facilities and production routes, and with the Feasibility Study already underway, Lake Giles has a 3.4 Mt per annum production target with potential to scale-up operations.
Lithium
A recent paper published by commodities expert Fastmarkets FB noted that global lithium supply was developing at accelerating pace due to strong and continually growing demand. In particular the demand for compounds used in lithium-ion (li-ion) batteries such as lithium carbonate and lithium hydroxide has prompted lithium producers to expand total production while diversifying their investments in different lithium operations to ramp up production and diminish asset risk.
Despite an effective over supply in 2018-2019 that saw a price moratorium and a 50% fall in the price of battery-grade lithium carbonate in China, the subsequent seismic shift to bring forward EV production and commitments from major automotive manufacturers around the world saw the price of Lithium in China surge to an 18 month high of $9450 per tonne in January 2021.
The Fastmarkets’ research team expects global lithium demand to grow to at least 1.1 million tonnes per year of lithium-carbonate equivalent (LCE) by 2025 from an expected 300,000 tonnes of LCE in 2019, with Global lithium producers set to boost output year on year to maintain pace with growing demand. Despite this, as can be seen from the table above the numbers still don’t add up, with massive shortfalls projected by Benchmark Intelligence in lithium and other key constituent metals by 2030.
Over 2018, China emerged as the world’s leading lithium-processing hub with the rapid growth of companies like Ganfeng Lithium, which specialise in converting lithium concentrate from hard rock.
Cinovec – European Metals Holdings
The Cinovec project is the largest hard rock lithium resource in Europe and 4th largest non-brine resource in the world. Perfectly located to become the central lithium supply hub for the European EV industry, Cadence owns a 12% stake in AIM listed European Metals Holdings (EMH), which in turn owns 49% of the Cinovec project, (51% owned by utilities giant CEZ Group).
Cinovec is a potential low-cost producer at the bottom of the cost curve, and will sustainably supply 25,267 tpa lithium hydroxide or 22,500 tpa lithium carbonate into the European battery market.
Sonora Lithium Project
Cadence is a 30% joint venture partner with Bacanora Lithium (BCN) on the Fleur Lease (Mexalit & Megalit) at the Sonora Lithium Project in Mexico. A completed feasibility study values Sonora Mexico at US$1.25bn NPV, with some of the lowest production costs at $4,000/t in the industry.
AIM listed Bacanora is focused on building a 35,000 tpa lithium carbonate operation at Sonora with 50% owner and take off partner Ganfeng Lithium.
Australia Hard Rock Lithium Projects
Cadence owns three dormant hard rock lithium assets in Australia. These are Picasso (Western Australia – WA), Litchfield (Northern Territories – NT) and Alcoota (NT) all of which are in regions with proven lithium mineralisation and supportive mining infrastructure.
The Litchfield project, located near Darwin (NT), has an exploration license granted and is contiguous to Core Lithium’s (ASX: CXO) territory. Core has a JORC compliant mineral resource of 8.55Mt @ 1.33% Li2O for its Finnis project (for all six deposits).
Yangibana Rare Earths Project
Operated by ASX listed Hastings Technology Metals, Yangibana is a substantial Rare Earths deposit near Gascoyne in Western Australia. Drilling and sampling have revealed high concentrations of Neodymium and Praseodymium (NdPr), essential components in permanent magnets used in electric vehicles.
Cadence is a 30% joint venture partner with Hastings on part of the Yangibana Rare Earth Element Project. Probable Ore Reserves within the tenements held by Cadence are just over 2m tonnes with TREO of 1.66%.
The current mine plan anticipates production to start from the joint venture areas (Yangibana) in year 6.
A Key Role?
Around the world today there are countless mining exploration companies, commodity investors and mine operators with projects offering scope for development and potential for investment. The challenge with any project of this nature is matching the opportunity with the macro backdrop, projected demand for the commodity alongside capex vs. return, production routes, shipping and completion of cycle to bring the product to the customer.
Rarely if ever has the industry been presented with so compelling a backdrop for the commodity market as a whole. The significant global resurgence seen in the mining sector at present given is entirely sustainable given the level of asset purchases and spending by Governments to rejuvenate damaged economies and the inevitable resulting erosion in fiat currency value.
As economies emerge from the havoc wrought by the COVID virus and restrictions on spending are lifted, it is clear that in many cases demand will outstrip availability. This will apply almost without exception across the commodity spectrum – iron ore for steel to fund reconstruction – lithium, nickel, cobalt, graphite and rare earths to address the burgeoning demand for lithium-ion battery production.
There is no doubt that the recovering global economy is embarking on the next great Commodity Supercycle. Many mining groups and commodity project investors will benefit from this phenomenon by owning the right projects, at the right stage of evolution at the right time. On the evidence available today, Cadence Minerals is certainly one of them.
Cadence Minerals #KDNC – Interim Results
Cadence Minerals plc (AIM/NEX: KDNC), is pleased to announce its interim results for the six months ended 30 June 2020.
The effects of the COVID-19 pandemic have been deep and fundamental. The pandemic has driven huge changes in the way we work and live the long-term effects of which are hard to predict with any great degree of accuracy. The reaction by governments around the world has for the large part involved economic stimuli with central banks cutting interests and the launch of huge quantitative easing schemes.
It is the latter, and in particular, the stimulus packages in China that have been beneficial to our investment portfolio. . China’s impact in relation to the rapid increase in iron ore prices has been clear. It is still the world’s biggest buyer of industrial commodities, and the vast majority seaborne trade in iron ore goes there. Indeed, in the first week of June, China’s steel blast furnaces were operating at 92% of capacity, which is above the 80-85% rates considered normal. Currently, indicators of construction activity look strong and a pipeline of orders had already been building before the pandemic struck. In its aftermath, construction has been given an extra push by the Chinese Government’s stimulus package.[1]
With this macroeconomic background, the directors believe that the Company’s investments have performed well. A detailed review of which was recently published in the annual report released in June 2020 and in further announcements subsequent to this date. We have provided some of the highlights from our investments over the period below.
The Company also raised £1.25 million of new funds (before expenses) from new and existing investors as announced on 21st August. These funds were raised for general working capital and to provide flexibility to the Company to repay loan notes from cash reserves rather than from its holdings in quoted investments.
HIGHLIGHTS
Amapa, Iron Ore Mine (“Amapa”)
· Amapa was owned by Anglo American plc and Cliffs Natural Resources and consists of a large-scale iron ore mine, beneficiation plant, railway, and private port. In 2012 the operation produced 6.1 Mt of iron ore concentrate and reported operating profits from their 70% ownership in the Amapá Project of US$120 million (100% – US$171 million). Before its sale in 2012, Anglo American valued its 70% stake at US$462m in its 2012 Annual Report (100% – US$600m).
· The remaining major precondition for Cadence to make its initial investment into Amapa requires DEV Mineraço S.A’s (“DEV”) to reach a settlement agreement with the secured bank creditors (“Bank Creditors”). On completion of the conditions and the release of the Cadence escrow monies, Cadence will become a 20% shareholder in Amapa via our joint venture company which will own 99.9% of DEV.
· DEV, Cadence and Indo Sino Pty Ltd (“the Investors”) have continued a constructive dialogue with the secured the Bank Creditors, and the parties are currently negotiating the settlement terms as proposed by the Bank Creditors.
· Iron Ore Stockpile Shipment – as announced on the 21 August – Companhia Docas de Santana (“CDSA”), a public (municipal) company and the port operator requested some additional non-statutory contractual requirements and undertakings. DEV has provided the requested documentation and continues to liaise with the State of Amapa and SEMA (Secretaria de Estado de Meio Ambiente). Cadence understands that SEMA will provide the required documentation imminently. Cadence will provide an update once the first shipment is underway.
European Metals Holdings Limited (“EMH”)
· In late April 2020, EMH advised that shareholders had approved the investment of EUR 29.1 million by CEZ a.s. (“CEZ”) for a 51% equity interest in Geomet, EMH’s Czech subsidiary and holder of the Cinovec licenses at the Extraordinary General Meeting held on 23 April 2020. The investment of EUR 29.1 million will see the Cinovec project fully funded to the decision to construct.
· In June 2020, EMH European Metals advised that the Czech Ministry of the Environment had granted Geomet an updated Preliminary Mining Permit related to the Eastern part of the Cinovec deposit. The permit was issued for a period of 8 years. A Preliminary Mining Permit is a necessary legal pre-qualification before obtaining a Final Mining Permit and guarantees EMH the priority right to apply for and obtain a Final Mining Area and a Final Mining Permit.
Macarthur Minerals (“Macarthur”)
· Announced Moonshine Magnetite Mineral Resource upgrade
· RCR Mining Technologies appointed to examine rail unloading infrastructure solution at Esperance Port
· Proposal for development of a Commercial Track Access Agreement received from Arc Infrastructure
· lodgement of applications for land access to develop a 93km haul road from its Lake Giles Iron Project to a proposed rail siding adjacent to the Perth to Kalgoorlie rail line
· Finalisation of land tenure agreement for the development of its proposed Magnetite processing plant at Lake Giles
Bacanora Lithium Plc (“Bacanora”)
· Cadence owns a 30% stake in the Mexalit S.A. de CV (“Mexalit”) joint venture which forms part of the Sonora Lithium Project in Northern Mexico.
· In late May 2020, Bacanora provided an update which included. The Sonora government continues to maintain measures to prevent the spread of Covid-19 which meant Bacanora’s Hermosillo pilot plant was placed in care and maintenance in late March 2020 after shipping samples to its engineering partners in order to maintain the Front End Engineering Design schedule. The pilot plant will remain closed until conditions are considered safe, and the Government lifts its restrictions.
· As a result of the return to work in China in late April 2020, the Ganfeng lithium test plant and project team resumed work on the Sonora flowsheet optimisation and process engineering. After the completion of the flow sheet engineering Ganfeng will provide Bacanora with an Engineering, Procurement and Construction style engineering proposal to produce downstream battery-grade lithium products from the Sonora Lithium Project.
Yangibana Rare Earth Project
· Cadence owns 30% of 3 Mining Leases, 6 Exploration Licences which form part of the Yangibana Rare Earth Deposit. Hastings Technology Metals owns the remaining 70%.
· Hasting’s signed long term binding Master Agreement with German Automotive Tier 1 supplier, Schaeffler technologies AG. Hasting’s obligation is to supply a substantial volume of MREC over an initial period of 10 years
· Total Yangibana Project CAPEX revised to A$449m from A$517mresulting in 13% or A$68M reduction in CAPEX based on Hydrometallurgical Plant relocation to the Pilbara
FINANCIAL RESULTS:
During the period the Group made a loss before taxation of £1.26 million (6 months ended 30 June 2019: £0.29 million year ended 31 December 2019: £2.27 million). There was a weighted basic loss per share of 1.336p (30 June 2019: 0.331p, 31 December 2018: 2.544p). As a result of unrealised foreign exchange differences, comprehensive loss for the period was £1.42 million (30 June 2019: £0.24 million, 31 December 2019: £2.04 million).
The total assets of the group decreased from £18.77 million at 31 December 2019 to £17.89 million. Of this amount £0.37 million represent the market value of our investments at the period end. Borrowings were reduced from £2.98m at 31 December 2019 to £2.08m at 30 June 2020.
During the period our net cash outflow from operating activities was £0.67 million, and our net cash position was up £0.12 million at £2.38 million.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information:
| Cadence Minerals plc | +44 (0) 7879 584153 |
| Andrew Suckling | |
| Kiran Morzaria | |
| WH Ireland Limited (NOMAD & Joint Broker) | +44 (0) 207 220 1666 |
| James Joyce | |
| James Sinclair-Ford | |
| Novum Securities Limited (Joint Broker) | +44 (0) 207 399 9400 |
| Jon Belliss |
Link here for the group financial statements
Cadence Minerals #KDNC – Interim Results for the six months ended 30 June 2019
Cadence Minerals plc announces interim Results for the six months ended 30 June 2019
HIGHLIGHTS
· Cadence entered into an investment agreement to acquire up to 27% of the Amapá iron ore mine, beneficiation plant, railway and private port.
· Before its sale in 2012 Anglo American valued (impaired) its 70% stake in the Amapá iron ore mine at US $462m ( 100% US $600m).
· During its operation, the mine generated an annual operating profit of up to U$171 million (100%).
· The total historic mineral resource contains an estimated 348 million tonnes (“Mt”) of ore @ 38.9% iron content (“Fe”).
· Macarthur Minerals (Cadence equity ownership approx. 9%) refocused efforts on their iron ore assets and secured a binding Life-Of-Mine Off-Take Agreement with Glencore International A.G
· European Metals (Cadence equity ownership approx. 19%) published a pre-feasibility study for the production of lithium hydroxide, increasing the net present value of the project 105% to US$1.1 BN.
INVESTMENT REVIEW
Amapá, Iron Ore Mine (“Amapá”)
In June this year Cadence Minerals entered into a binding investment agreement (“the Agreement”) with Indo Sino Pte. Ltd. (“Indo Sino”) to invest in and acquire up to a 27% interest in the former Anglo American plc (“Anglo American”) and Cliffs Natural Resources (“Cliffs”) Amapá iron ore mine, beneficiation plant, railway and private port (“Amapá Project”) owned by DEV Mineração S.A. (“Amapá”).
The Amapá Project is a large-scale iron open pit ore mine with associated rail, port and beneficiation facilities and commenced operations in December 2007. Production increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012 respectively.
A summary of the asset is as below:
· Before its sale in 2012 Anglo American valued its 70% stake in the Amapá Project at US$866 million (100% 1.2 billion) and after impairment valued it at US $462m in its 2012 Annual Report ( 100% US $600m)
· During its operation, the mine generated an annual operating profit of up to U$171 million (100%)
· The total historic mineral resource contains an estimated 348 million tonnes (“Mt”) of ore @ 38.9% iron content (“Fe”)
· The ore is beneficiated to 65% Fe Pellet Feed and 62% Fe Spiral Concentrate
· Based on available historic mine plans and an independent consultant review it is expected that at full production the Amapá Project has a mine life of 14 years and at full capacity is targeting to produce up to 5.3 Mt of Iron Ore per annum
· Subject key preconditions being met, the planned shipment of a 1.39 million tonne stockpile is scheduled to commence in December 2019. It is estimated that these stockpiles have a net realisable value of approximately US$ 60 million, which will be reinvested in the restart of the Amapá Project
· Potential for the mine and existing infrastructure to be brought to market swiftly with mining and processing anticipated to restart in 2021 subject to the grant of the necessary permits, regulatory consents and project financing.
To acquire its 27% interest, Cadence will invest US$ 6 million over two stages. The first stage is for 20% of the JV Co the consideration for which is US$2.5 million. The second stage of investment is for a further 7% of JV Co for a consideration of US$3.5 million. Should Indo Sino seek additional investors or an investment in the JV Co the agreement also provides Cadence with a first right of refusal to increase its stake to 49% in the JV Co.
Our investment is conditional on several key preconditions the first is the approval of the judicial restructuring plan (“JRP”), which was completed at the end of August. Once the remaining pre-conditions relating to the reinstatement of a concession on the railway licenses and bank creditor arrangements have been met, the US$2.5 million investment placed in the judicial trust account will be released, and Cadence will own 20% of the Amapá iron ore project. This will enable the start of the shipping of the iron stockpile.
The approval of the JRP and the fulfilment of the preconditions outlined above will result in Cadence’s and IndoSino’s joint venture company Pedra Branca Alliance Pte Ltd. (“PBA”) owning 99.9% of DEV Mineração S.A. (“Amapá”). DEV Mineração S.A. is the owner of the Amapá iron project.
Cadence’s next stage of investment will be a further investment of US$3.5 million on the grant of all operational and environmental licenses for the Amapá Project, at which point Cadence will own 27%.
As part of the JRP Amapá submitted an outline of an operational and financial plan that Amapá intends to implement to bring the project back into production, which included the following
· The total initial estimate of capital investment of approximately US$168 million, of which it is estimated US$61 million will be spent on port rehabilitation and US$47 million to be spent on plant recommissioning.
· Rehabilitation to be completed by the end of 2021 with new production in 2022. Full production by 2024 of 5.3 million tonnes (“Mt”) of iron ore per annum.
· At full production and using US$61 per tonne of 62% Fe Amapá is forecast to have:
· an average net revenue after shipping of US$266 million per annum,
· and an average EBITDA of US$136 million per annum.
European Metals Holdings Limited (“EMH”)
Cadence has been investing in European Metals since June 2015. As of the date of this document, Cadence holds approximately 19% in the Cinovec deposit in the Czech Republic through a direct holding in the share capital of European Metals that owns 100 per cent of the exploration rights to the Cinovec lithium/tin deposit. The Cinovec lithium and tin deposit is located in the Krusne Hory mountain range. The deposit that straddles the border between Germany and the Czech Republic and in Germany, it is known as the Zinnwald deposit (50% owned by Bacanora Lithium Plc ). The district has an extensive mining history, with various metals having been extracted since the 14th Century.
During the period EMH made significant progress. Drilling continued at the site with five of the eight-hole programme completed; this drilling programme was carried out to define the first two years of mining within the Cinovec-south area. The results of this programme have either been in line with or exceeded, EMH’s expectations particularly with regard to the tin intercepts.
In addition to the drilling results, EMH published a pre-feasibility study on producing battery-grade lithium hydroxide for as an alternative to battery-grade lithium carbonate. The result significantly enhanced the forecast economics of the Cinovec Project:
Highlights of the study are: (all $ figures in this release are US Dollars and increases refer to the 2017 PFS Lithium Carbonate study):
· Net estimated overall cost of production post-credits: $3,435 / tonne LiOH.H2O
· Project Net Present Value (“NPV”) increases 105% to: $1.108B (post-tax, 8%)
· Internal Rate of Return (“IRR”) was increased 37% to 28.8% (post-tax)
· Total Capital Cost: $482.6M
· Annual production of Battery Grade Lithium Hydroxide: 25,267 tonnes
· Studies are based on only 9.3% of reported Indicated Mineral Resource and a mine life of 21 years processing an average of 1.68 Mtpa ore
· The process used to produce lithium hydroxide allows for the staging of lithium carbonate and then lithium hydroxide production to minimise capital and startup risk and enables the production of either battery-grade lithium hydroxide or carbonate as markets demand
After the period end, EMH entered into an agreement with CEZ Group(“CEZ”), one of Central and Eastern Europe’s largest power utilities, to conditionally provide a EUR 2 million finance facility by way of a convertible loan. CEZ is currently conducting due diligence on the Company and Project. The successful outcome of the due diligence process could see CEZ become European Metals’ largest shareholder and co-development partner for the Cinovec Lithium/Tin Project through conversion of the convertible note and subsequent additional investment.
Macarthur Minerals (“Macarthur”)
Cadence holds approximately 9% of the equity in Macarthur. Macarthur has three iron ore projects in the Yilgarn region of Western Australia. The Company has also established multiple project areas in the Pilbara, Western Australia for conglomerate gold, hard rock greenstone gold and hard rock lithium. In addition, Macarthur Minerals has significant lithium brine interests in the Railroad Valley, Nevada, USA.
During the period Macarthur focused its efforts on its Iron Assets in Western Australia.
The main highlights for Macarthur over the period were:
· Opened an up to US$6 million institutional convertible note offer to fund the production of a Bankable Feasibility Study on Macarthur iron ore projects
· Binding Life-Of-Mine Off-Take Agreement with Glencore International A.G for the Lake Giles Iron Ore Project for approximately 4 mtpa for the first 10 years on project start up
· Macarthur entered into exclusive negotiation agreement with Aurizon for rail haulage services for the Lake Giles Iron Ore Project
· Infill drilling program planned for the Moonshine magnetite deposit
· Engineering firm Engenium commissioned to revise NI 43-101 compliant technical report and refine operating and capital costs of the hematite and magnetite projects
· Applications have been made for three additional prospective iron ore tenements. These were properties released by Cliffs Natural Resources and are adjacent to the iron ore operations of Mt Jackson and Deception Mines
Bacanora Lithium Plc (“Bacanora”)
At the period end Cadence owned less than one per cent of Bacanora’s equity and a 30% stake in the Mexalit S.A. de CV (“Mexalit”) joint venture which forms part of the Sonora Lithium Project in Northern Mexico.
Bacanora has two lithium development assets, the Sonora Lithium Project and the Zinnwald Lithium Project. Bacanora has a 50% interest in, and joint operational control, of the Zinnwald Lithium Project. Zinnwald represents a strategic asset located near a thriving market for lithium and energy products.
Bacanora’s principal asset is the Sonora Lithium Project in northern Mexico. The asset has Measured plus Indicated Mineral Resource estimate of over 5 million tonnes (‘Mt’) (comprising 1.9 Mt of Measured Resources and 3.1Mt of Indicated Resources) of lithium carbonate equivalent (‘LCE’) and an additional Inferred Mineral Resource of 3.7 Mt of LCE, Sonora is regarded as one of the world’s larger known clay lithium deposits.
Bacanora continued to progress the strategic investment by Ganfeng Lithium Co., Ltd. (“Ganfeng”) during the period and signed the investment agreement at the end of June 2019, the key terms of which were:
· Cornerstone strategic investment of 29.99% in Bacanora for £14,400,091 by Ganfeng
· Project level investment of 22.5% in Sonora Lithium Ltd , the holding company for the Sonora Lithium Project, for £7,563,649
· Additional long-term offtake at a market-based price per tonne
· Gangfeng will complete a review within six months of the EPC engineering design and capital costs of Sonora Lithium Project with a view to reducing costs and accelerating the timetable
· Gangfeng will provide a plant and process commissioning team to assist Bacanora in delivering first production in 2021
At the time of publishing Ganfeng was awaiting final approval from Chinese authorities to make its investment.
Yangibana Rare Earth Project
Cadence owns a 30% free carried interest in the Yangibana North, Gossan, Hook, Kanes Gossan, Lions Ear and Bald Hill North rare earth projects in Western Australia. These projects form part of the larger Yangibana Rare Earth Project (“the Project”). The free carry is up to the commencement of the feasibility study.
A considerable amount of work over this period has been to define the geological resource and reserves, optimise the process flow, carry out detailed design and engineering work required for the setting up of a process plant, negotiations on equipment supply and no less crucial securing project finance. An early works permit was granted which allowed the initiation of infrastructure work and bring on-site a 340 rooms accommodation camp ready for occupation when mine construction commences.
On geology, there was a 34% increase in probable ore reserves to 10.35 million tonnes at 1.22% TREO including 0.43%Nd2O3+Pr6O11, supporting an initial 11 years operational life for the project based on the JORC certified resource of 21.7 million tonnes.
The current mine plan and production targets set out by the operator incorporates 10.35 million tonnes of Probable Ore Reserves, of which 1.96 million tonnes is part our joint venture asset, Yangibana North, which according to the operator’s production targets are scheduled to be mined from year 8 to year 14. These production targets include indicated mineral resources, hence the longer mine life.
Lithium Assets in Australia
In March this year Cadence announced that it has agreed to acquire three highly prospective assets in Australia that are in regions with proven high-grade lithium mineralisation. The mechanism to facilitate this acquisition was via varying binding investment agreements in place with Lithium Technologies Pty Ltd (“LT”) and Lithium Supplies Pty Ltd (“LS”) that Cadence entered on 11 December 2017 to acquire up to 100% of six prospective hard rock lithium assets in Argentina.
Highlights of the assets include:
· The acquisition covers three projects – Picasso (Western Australia – WA), Litchfield (Northern Territories – NT) and Alcoota (NT) – that are located in regions with proven lithium mineralisation and supportive mining infrastructure
· The Picasso Project (license granted) is near Alliance Mineral Assets’ (ASX: A40; SGX: 40F; “AMA”) high-profile Bald Hill Mine in WA (note: AMA recently completed a 50:50 A$400m+ merger with delisted Tawawa Resources [ASX: TAW] & raised $40M to develop the asset base)
· Demonstrating exploration upside for Picasso, the Bald Hill Mine is producing a spodumene concentrate and has a JORC (2012) compliant mineral resource of 26.5Mt @ 0.96% Li2O; probable ore reserves at 11.3Mt @ 1.01% Li2O
Preliminary exploration work was concluded in April with positive results, and Cadence increased its stake from 4% to 24%. Early exploration work will begin soon to test and sample targets that have been identified during the preliminary exploration.
Other Investments
Cadence also retains equity positions in Sagon Resources Ltd (formerly Clancy Minerals Ltd) and Auroch Minerals Ltd. 
The latter being involved in base metal exploration in Australia, in particular, the Saints Nickel Project in Western Australia. Sagon Resources Ltd is currently exploring the Cummins Range Rare Earths Project.
FINANCIAL REVIEW
During the period, the Group made a loss before taxation of £0.28 million (30 June 2017: loss of £4.61 million). This was primarily due to an increase in the value on our portfolio, which offset administrative, financing and share of associated losses totalling £0.96 million.
There was a weighted basic loss per share of 0.003p (30 June 2017: loss per share 0.059p) Foreign currency translation differences marginally decreased comprehensive loss for the period to £0.24 million (30 June 2017: total comprehensive loss of £4.66 million).
Administrative expenses decreased by £0.11 million compared to the same period last year; this decrease was driven by cost-cutting measures across the board.
The total assets of the group increased from £18.33 million at 31 December 2017 to £19.39 million. Of this amount, £2.33 million represent the market value of our available for sale investments at the period end. The reduction in the total assets is as a result of the decrease in the value of Bacanora equity, which was the primary driver for the reduction of available for sale asset value.
It is important to note that this does not include our investment in EMH. Our investment in EMH is classified as an investment in an associate and held at a value of £12.2 million. EMH is classified as such because we hold approximately 19% and Kiran Morzaria, the Chief Executive Officer of Cadence is also a Non-Executive Director of EMH.
Our borrowings of £3.71 million as at the 31 December 2017 reduced to £2.06 million by the end of the period as we paid back our convertible loans.
During the period, our net cash outflow from operating activities was £0.52 million compared to £0.45 million during the same period last year. We invested £0.27 million in Amapá, as part of our due diligence and JRP costs and our financing costs were some £0.19 million. We disposed of £1.42 of our available for sale investments which predominantly was our Bacanora equity. These sales were used to pay back some £1.59 million of our convertible loan during the period. We raised some £1.30 million of equity during the period which after netting of the aforementioned costs and revenue from the sale of our equity stake yielded resulted in a cash balance at the end of the period of £0.54 million
|
For further information, please contact |
|
|
Cadence Minerals plc |
+44 (0) 207 440 0647 |
|
Andrew Suckling |
|
|
Kiran Morzaria |
|
|
WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
|
James Joyce |
|
|
James Sinclair-Ford |
|
|
Novum Securities Limited (Joint Broker) |
+44 (0) 207 399 9400 |
|
Jon Belliss |
CADENCE MINERALS PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2019
|
Notes |
Unaudited Period ended 30 June 2019 |
Unaudited Period ended 30 June 2018 |
Audited Year ended 31 December 2018 |
|||
|
£’000 |
£’000 |
£’000 |
||||
|
Income |
– |
|||||
|
Unrealised profit/(loss) on assets held for sale |
1,118 |
(3,730) |
(7,440) |
|||
|
Realised (loss)/profit on assets held for sale |
(264) |
105 |
(1,967) |
|||
|
Other income |
4 |
48 |
140 |
|||
|
858 |
(3,577) |
(9,267) |
||||
|
Share based payments |
– |
(3) |
(7) |
|||
|
Other administrative expenses |
(672) |
(785) |
(1,559) |
|||
|
Total administrative expenses |
(672) |
(788) |
(1,566) |
|||
|
Operating profit/(loss) |
186 |
(4,365) |
(10,833) |
|||
|
Share of associates losses |
(274) |
(182) |
(555) |
|||
|
Finance cost |
(197) |
(59) |
(377) |
|||
|
(Loss)/profit before taxation |
(285) |
(4,606) |
(11,765) |
|||
|
|
|
|
||||
|
Taxation |
– |
– |
– |
|||
|
(Loss)/profit attributable to the equity holders of the Company |
(285) |
(4,606) |
(11,765) |
|||
|
Other comprehensive income/(expenditure) |
||||||
|
Foreign currency translation differences |
47 |
(53) |
(150) |
|||
|
Other comprehensive income/(expenditure) for the period net of tax |
47 |
(53) |
(150) |
|||
|
Total comprehensive expenditure for the period |
(238) |
(4,659) |
(11,915) |
|||
|
Loss per share |
||||||
|
Basic (pence per share) |
3 |
(0.003) |
(0.059) |
(0.150) |
||
|
Diluted (pence per share) |
3 |
(0.003) |
(0.051) |
(0.145) |
CADENCE MINERALS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2019
|
Share capital |
Share premium account |
Share-based payment reserve |
Hedging, Loan & Exchange reserves |
Retained earnings |
Total equity |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
|
Balance at 1 January 2018 |
1,202 |
27,552 |
3,178 |
337 |
(5,545) |
26,724 |
|
Share based payments |
– |
– |
3 |
– |
– |
3 |
|
Transfer on lapse of warrants |
– |
– |
(132) |
– |
132 |
– |
|
Transactions with owners |
– |
– |
(129) |
– |
132 |
3 |
|
Foreign exchange |
– |
– |
– |
(53) |
– |
(53) |
|
Profit for the period |
– |
– |
– |
– |
(4,606) |
(4,606) |
|
Total comprehensive loss for the period |
– |
– |
– |
(53) |
(4,606) |
(4,659) |
|
Balance at 30 June 2018 (unaudited) |
1,202 |
27,552 |
3,049 |
284 |
(10,019) |
22,068 |
|
Share based payments |
– |
– |
4 |
– |
– |
4 |
|
Transfer on lapse of warrants |
– |
– |
(1,661) |
– |
1,661 |
– |
|
On settlement of loan notes |
– |
– |
(412) |
(412) |
||
|
Transactions with owners |
– |
– |
(1,657) |
(412) |
1,661 |
(408) |
|
Foreign exchange |
– |
– |
– |
(97) |
– |
(97) |
|
Loss for the period |
– |
– |
– |
– |
(7,159) |
(7,159) |
|
Total comprehensive loss for the period |
– |
– |
– |
(97) |
(7,159) |
(7,256) |
|
Balance at 31 December 2018 |
1,202 |
27,552 |
1,392 |
(225) |
(15,517) |
14,404 |
|
Issue of share capital |
232 |
2,668 |
– |
– |
– |
2,900 |
|
Costs of share issue |
– |
(105) |
– |
– |
– |
(105) |
|
Transactions with owners |
232 |
2,563 |
– |
– |
– |
2,795 |
|
Foreign exchange |
– |
– |
– |
47 |
– |
47 |
|
Loss for the period |
– |
– |
– |
– |
(285) |
(285) |
|
Total comprehensive loss for the period |
– |
– |
– |
47 |
(285) |
(238) |
|
Balance at 30 June 2019 (unaudited) |
1,434 |
30,115 |
1,392 |
(178) |
(15,802) |
16,961 |
CADENCE MINERALS PLC
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
|
Unaudited |
Unaudited |
Audited |
||||
|
30 June 2019 |
30 June 2018 |
31 December 2018 |
||||
|
Assets |
Notes |
£’000 |
£’000 |
£’000 |
||
|
Non-current |
||||||
|
Intangible assets |
2,438 |
1,875 |
2,172 |
|||
|
Investment in associate |
12,170 |
12,918 |
12,483 |
|||
|
14,608 |
14,793 |
14,655 |
||||
|
Current assets |
||||||
|
Trade and other receivables |
1,919 |
461 |
315 |
|||
|
Assets held for sale |
2,330 |
9,946 |
2,895 |
|||
|
Cash and cash equivalents |
536 |
216 |
468 |
|||
|
Total current assets |
4,785 |
10,623 |
3,678 |
|||
|
Total assets |
19,393 |
25,416 |
18,333 |
|||
|
EQUITY AND LIABILITIES |
||||||
|
Current liabilities |
||||||
|
Trade and other payables |
372 |
290 |
223 |
|||
|
Borrowings |
2,060 |
3,058 |
3,706 |
|||
|
Total current liabilities and total liabilities |
2,432 |
3,348 |
3,929 |
|||
|
Equity |
||||||
|
Share capital |
4 |
1,434 |
1,202 |
1,202 |
||
|
Share premium |
30,115 |
27,552 |
27,552 |
|||
|
Share based payment reserve |
1,392 |
3,049 |
1,392 |
|||
|
Hedging & Exchange reserve |
(178) |
284 |
(225) |
|||
|
Retained earnings |
(15,802) |
(10,019) |
(15,517) |
|||
|
Total equity and liabilities |
||||||
|
to owners of the company |
16,961 |
22,068 |
14,404 |
|||
|
Total equity and liabilities |
19,393 |
25,416 |
18,333 |
|||
CADENCE MINERALS PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD 30 JUNE 2019
|
Unaudited Period ended |
Unaudited Period ended |
Audited Year ended |
||||
|
30 June 2019 |
30 June 2018 |
31 December 2018 |
||||
|
£’000 |
£’000 |
£’000 |
||||
|
Cash flows from operating activities |
||||||
|
Operating profit/(loss) |
186 |
(4,365) |
(10,833) |
|||
|
Net realised/unrealised profit on assets held for sale |
(854) |
3,625 |
9,407 |
|||
|
Equity settled share-based payments |
– |
3 |
7 |
|||
|
Decrease/(increase) in trade and other receivables |
(4) |
261 |
407 |
|||
|
Increase/(decrease) in trade and other payables |
149 |
28 |
(39) |
|||
|
Net cash outflow from operating activities |
(523) |
(448) |
(1,051) |
|||
|
Taxation |
– |
– |
– |
|||
|
Cash flows from investing activities |
||||||
|
Payments for investments in assets held for sale |
– |
(476) |
(523) |
|||
|
Receipts on sale of assets held for sale |
1,419 |
438 |
1,755 |
|||
|
Receipts from sale of/(payments for) investments in associates |
39 |
– |
(50) |
|||
|
Investment in exploration costs |
(266) |
(100) |
(325) |
|||
|
Net cash outflow from investing activities |
1,192 |
(138) |
857 |
|||
|
Cash flows from financing activities |
||||||
|
Proceeds from issue of share capital |
1,300 |
– |
– |
|||
|
Share issue costs |
(105) |
– |
– |
|||
|
Net (loan repayments)/borrowings |
(1,599) |
(1,176) |
(998) |
|||
|
Finance cost |
(197) |
(59) |
(377) |
|||
|
Net cash inflow from financing activities |
(601) |
(1,235) |
(1,375) |
|||
|
Net increase/(decrease) in cash and cash equivalents |
68 |
(1,821) |
(1,569) |
|||
|
Cash and cash equivalents at beginning of period |
468 |
2,037 |
2,037 |
|||
|
Cash and cash equivalents at end of period |
536 |
216 |
468 |
NOTES TO THE INTERIM REPORT
FOR THE PERIOD ENDED 30 JUNE 2019
1 BASIS OF PREPARATION
The interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention. The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group’s statutory financial statements for the year ended 31 December 2018 have been delivered to the Registrar of Companies. The auditor’s report on those financial statements was unqualified.
The principal accounting policies of the Group are consistent with those detailed in the 31 December 2018 financial statements, which are prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted by the European Union. IFRS16 – Leases has been adopted, but as the Group has no leases exceeding 12 months, this has had no impact.
GOING CONCERN
The Directors have prepared cash flow forecasts for the period ending 30 September 2019. The forecasts demonstrate that the Group has sufficient funds to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the accounts have been prepared on a going concern basis.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results
2 SEGMENTAL REPORTING
An operating segment is a distinguishable component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group’s chief operating decision maker to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available.
The chief operating decision maker reviews financial information for and makes decisions about the Group’s performance as a whole. The Group has not actively traded during the period.
Subject to further acquisitions the Group expects to further review its segmental information during the forthcoming financial year.
3 PROFIT PER SHARE
The calculation of the loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.
|
Unaudited |
Unaudited |
Audited |
|||
|
six months ended |
six months ended |
year ended |
|||
|
30 June 2019 |
30 June 2018 |
31 December 2018 |
|||
|
£’000 |
£’000 |
£’000 |
|||
|
(Loss)/profit on ordinary activities after tax (£’000) |
(285) |
(4,606) |
(11,765) |
||
|
Weighted average number of shares for calculating basic loss/profit per share |
8,335,217,332 |
7,851,440,338 |
7,851,440,338 |
||
|
Share options and warrants exercisable |
280,000,000 |
1,259,575,345 |
280,000,000 |
||
|
Weighted average number of shares for calculating diluted loss/profit per share |
8,615,217,332 |
9,111,015,683 |
8,131,440,338 |
||
|
Basic loss per share (pence) |
(0.003) |
(0.059) |
(0.150) |
||
|
Diluted loss per share (pence) |
(0.003) |
(0.051) |
(0.145) |
4 SHARE CAPITAL
|
Unaudited |
Unaudited |
Unaudited |
|||
|
30 June 2019 |
30 June 2018 |
30 June 2018 |
|||
|
£’000 |
£’000 |
£’000 |
|||
|
Allotted, issued and fully paid |
|||||
|
173,619,050 deferred shares of 0.24p (30 June 2018 and 31 December 2018: 173,619,050) |
417 |
417 |
417 |
||
|
10,172,652,446 ordinary shares of 0.01p (30 June 2018 and 31 December 2018: 7,851,440,338) |
1,017 |
785 |
785 |
||
|
1,434 |
1,202 |
1,202 |
Cadence Minerals #KDNC – Update on Lithium Assets in Australia
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY; “Cadence”) is delighted to provide an update on preliminary exploration work undertaken on three highly prospective lithium assets in Australia, which was announced on 4 March 2019. Furthermore, Cadence is pleased to confirm the completion of Stages 2 of this transaction which elevates its stake in the three lithium assets to 24% from 4%.
HIGHLIGHTS
- Over the past month, the geology consultant to our joint venture partner in Australia has progressed desktop reviews on the three lithium projects – Picasso (Western Australia – WA), Litchfield (Northern Territories – NT) and Alcoota (NT) – which uncovered the following salient points:
- Picasso: at least 70 potentially mineralised surface pegmatites have been identified within the tenure, which is near Alliance Minerals’ (ASX: A40; SGX: 40F; “AMA”) high-profile operating Bald Hill Lithium Mine as well as Cowan Lithium and Liontown Resources (ASX: COW; “COW” and ASX: LTR; “LTR”) advanced lithium projects.
- As the preliminary work has unearthed some encouraging findings, the team intends to fast-track plans to mobilise to the Picasso site to commence assessing the potential of the pegmatites identified for incremental follow up work.
- Litchfield: on 27 March 2019, neighbour Core Lithium (ASX: CXO; “CXO”) announced encouraging high-grade drill results – 76m @ 1.78% Li2O from 149m including 21m @ 2.06% Li2O from 202m – at its BP33 deposit (part of the Finniss project) which is 900m from Litchfield’s boundary.
- CXO’s results confirm there are numerous high-grade spodumene orebodies present in the region, which significantly enhances potential exploration upside for the Litchfield project, especially the prospect of contiguous mineralisation.
- Alcoota: as a result of interpreting satellite imagery from the site, we are confident that there are multiple lithium-rich surface pegmatites within the tenure that potentially connect to confirmed occurrences in adjacent tenures to the north-west and south east.
- With all regulatory approvals finalised, Cadence will proceed to complete Stage 2 of the varied agreement with Lithium Technologies Pty Ltd (“LT”) and Lithium Supplies Pty Ltd (“LS”) which will lift its stake to 24% from 4%.
Kiran Morzaria, Chief Executive Officer, added: “Cadence’s geology consultant has moved swiftly over the past month to broaden the understanding of our newly acquired lithium assets in Australia, uncovering 70 potentially mineralised occurrences at the Picasso project and verifying there is a pegmatite continuum across the Alcoota tenure. Furthermore, Core Lithium’s recent drill assay results from its BP33 deposit, which are arguably among the highest in Australia in the past 12-months, clearly benefits Cadence’s Litchfield project given it is only 900m away.
These initial findings represent a highly encouraging start and clearly set the stage for an exciting exploration program to unfold over the balance of the year, as the geology consultancy moves quickly to develop these highly prospective lithium projects.”
PRELIMINARY EXPLORATION WORK
The geology consultant in Australia progressed desktop work on all three assets since the acquisition announcement on 4 March 2019, which unearthed the following new salient points that enhance the prospective features to varying degrees:
Picasso project, WA
Further analysis of mapping data undertaken by the Geological Survey of Western Australia (GSWA) and satellite imagery has highlighted at least 70 potentially mineralised pegmatites, which includes multiple GSWA mapped clusters, within the project’s boundary. This is an extremely encouraging quantitative start to the exploration program, as more pegmatites, including clusters, are expected to be uncovered in the southern portion of the tenure as GSWA potentially did not differentiate pegmatites in granitic terrane.
Combined, this data will be instrumental in refining targets for the inaugural site visit that will focus on expansive proprietary geological mapping and collecting rock-chip samples to test for elevated lithium levels. In turn, once this material is analysed, the geology consultants will be able to commence formulating priority targets for the inaugural drilling program. Interestingly, as the Picasso project is exclusively on unallocated Crown land, this dynamic facilitates the geology consultant expediting the exploration program.
Overall, with the Picasso project having similar geology to its neighbouring peers (AMA, LTR and Cowan Lithium), which have confirmed occurrences of pegmatites with lithium-bearing spodumene, it is highly prospective and delivers significant exploration upside. Moreover, the Picassso project is highly accessible, as it is 1km north of the sealed Eyre Highway which runs through Norseman, a regional hub for the mining industry, 50km west of the tenure.
Litchfield project, NT
Further drilling at CXO’s BP33 deposit, which is 900m from the Litchfield project boundary, delivered more impressive high-grade results – 76m @ 1.78% Li2O from149m including 21m @ 2.06% Li2O from202m. Notably, according to CXO’s 27 March 2019 release, the latest intersection results “confirm the consistent, wide and high-grade nature of the spodumene pegmatite orebody at BP33” which is a key component of the Finniss project. Within the next few weeks, its is expected that CXO will be completing a Definitive Feasibility Study for the Finniss project, which we believe should materially enhance the exploration upside for Litchfield, given the potential for contiguous mineralisation.
Systematically reviewing information on the Northern Territory government’s STRIKE platform highlighted incremental encouraging results, with 35 mineral occurrences identified within 1-2km of the Litchfield project’s boundary. All CXO’s major deposits (including BP33), which comprise demonstrable mineral resources, are classified as pegmatite occurrences containing lithium, tin, niobium and tantalum. Importantly, the underlying geology and geophysical characteristics of the Litchfield project are very similar to CXO’s ground, which has been verified by magnetic and radiometric surveys.
Leveraging the wealth of information available from CXO’s ground, the Litchfield project clearly delivers exciting upside potential. The next phase of the exploration program is to reconcile satellite imagery with known information and identify priority targets for the inaugural fieldwork, which will provide more clarity on the extent of mineralised pegmatites across the tenure.
Alcoota project, NT
Reconciling satellite imagery with known lithium-rich surface pegmatite occurrences to the north-west and south-east in contiguous tenures on opposite sides of the Alcoota project, potentially indicates a mineralised continuum zone through the tenure. Importantly, these occurrences have, for the most part, been recorded in the STRIKE system and verified in ASX announcements by Kingston Resources (ASX: KSN), which previously owned adjacent tenure that was then sold to private group, Lithium Plus. Moreover, the encouraging findings from the preliminary desktop review confirm the underlying geology within Lithium Plus’ ground is near identical to the Alcoota project.
As limited exploration was undertaken on the Alcoota project historically, there are several targets warranting further investigation that were identified by satellite imagery. Of these, a large target near the central southern boundary, that is clearly readily accessible, stands out as visually it closely mirrors lithium-rich pegmatites identified in neighbouring peers.
However, further work is required to finalise the desktop review which should provide full clarity on where the team should target when they commence follow up field work.
Finalising desktops and expediting exploration program
Holistically, the geology consultant’s next focus is to finish off all the desktop studies then start planning the inaugural site visits and fieldwork. As the preliminary work has unearthed some encouraging findings, the team intends to fast-track plans to mobilise to the Picasso site to commence assessing the potential of the pegmatites identified for incremental follow up work.
STAGE 2 Completion
With all regulatory approvals now finalised, Cadence will now acquire further 20% in of LT & LS increasing its equity stake in both to 24%. LT &LS own the Australian lithium assets. As per the announcement dated 4 March 2019 Cadence will issue 373,544,298 new ordinary shares to the founding shareholders of LT & LS.
Admission and Settlement
Application will be made for the admission to trading on the AIM market (“AIM”) of London Stock Exchange plc (“LSE”) of the Placing Shares (“Admission”). Admission is expected to occur on or around 16 April 2019. Following Admission, the Company will have 9,091,651,299 Ordinary Shares in issue. There are no shares held in treasury. The total voting rights in the Company is therefore 9,091,651,299 and Shareholders may use this figure as the denominator by which they are required to notify their interest in, or change to their interest in, the Company under the Disclosure Guidance and Transparency Rules.
– Ends –
For further information:
|
Cadence Minerals plc |
+44 (0) 207 440 0647 |
|
Andrew Suckling |
|
|
Kiran Morzaria |
|
|
WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
|
James Joyce |
|
|
James Sinclair-Ford |
|
|
Novum Securities Limited (Joint Broker) |
+44 (0) 207 399 9400 |
|
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.
Cadence Minerals (KDNC) BRR Media interview and Australia Lithium assets presentation
BRR Media interview
Kiran Morzaria, CEO of Cadence Minerals discusses the company’s latest Australia lithium asset accessions on BRR Media. Listen to the interview here.
Acquisition of Lithium Assets in Australia presentation slides