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Cadence Minerals #KDNC – Letter of Intent to Acquire up to a 40% stake in the Pompeya and Sarzedas Tungsten, Antimony and Gold Exploration Tenements, Completion of £1 million Fundraise and Investment Updates

17th December 2024 / Leave a comment

Cadence Minerals (AIM: KDNC) is pleased to announce that it has entered into a letter of Intent with Hesperian Metal, S.L (“Hesperian”) to invest in and acquire up to 40% two prospective tungsten, antimony, and gold exploration packages in Spain and Portugal (“LOI”). The LOI will be funded via a fully over-subscribed placing with predominantly institutional investors for gross proceeds £1 million.

The two exploration tenement packages include the Pompeya Project in Spain, which covers a sizeable former mining province and is prospective for tungsten (“Pompeya”). The second tenement package is situated near Castelo Branco in eastern Portugal, which also contains several old mine workings and is prospective for antimony, tungsten, and gold (“Sarzeda”). Together, Pompeya and Sarzeda are referred to as the “Projects”.

Highlights

Cadence has conditionally agreed to an LOI to invest in and acquire up to 40% of several licenses which contain previously unidentified tungsten, antimony, and gold exploration targets.
The Pompeya project covers an area of approximately 470 square kilometres (km²) of mining and exploration licenses, featuring multiple mineralised skarns, and historic mine workings.
There has been limited exploration of tungsten in the area. However, recent investigations at Pompeya have identified tungsten ore (scheelite) in both the old mine workings and at the surface within skarn deposits.
Rock chip sampling returned tungsten oxide (“WO₃”) grades between 3.3% and 4.8%.
Other notable tungsten deposits in the Iberian Peninsula include the Los Santos Mine (currently on care-and-maintenance with the mill slated for restart in 2025) and the Panasqueira Mine (operating mine, almost continuously since 1896), both owned by Almonty Industries (TSE:AII). These operations have mineral resources (Measured and Indicated) of 3.7 Mt at 0.19% WO₃ and 10.0 Mt at 0.23% WO₃, respectively, according to the latest Almonty data.
Tungsten is recognised globally as a critical and strategic material due to its economic significance, supply risk, and limited substitution alternatives. Since 2020, the price of tungsten has risen from approximately US$200 per metric ton unit to around US$330 per metric ton unit.
The Sarzedaz project covers some 57km² and contains numerous old antimony and tungsten deposits, with associated tailings storage facilities.
Historic grab samples of the tailings storage facilities yielded a median grade of 9g/t of gold.
If Cadence proceeds with this investment, the capital raised will be used to advance the exploration of the Projects over the next six months to identify potential mineral resource targets.

Cadence CEO Kiran Morzaria commented: “As our flagship Amapá project continues to advance and de-risk, our Board are mindful of the changing macro landscape and our priority to ensure Cadence has maximum exposure to the critical minerals needed for energy and technology markets. As such, we are excited by the potential opportunity on offer with the Pompeya and Sarzeda projects, particularly given the increasing importance attached to tungsten as a strategic raw material. I look forward to reporting back on progress at the end of the exclusivity period with Hesperian Metals.”

“I am also pleased to confirm the Company has successfully raised £1 million before expenses to fund our investment into the Pompeya and Sarzeda projects and our continued investment into Amapá.”

Chairman Andrew Suckling added: “With Amapa progressing well and in particular it’s potential to feed high grade ore for “green iron”, I am pleased that our Board remains vigilant and open to new investment opportunities as the critical minerals landscape continues to shift. Once our due diligence process has completed, we fully expect the Pompeya and Sarzeda projects to complement our other investments into the critical minerals needed for energy and technology markets “

About the Projects

Pompeya

The Pompeya project is situated in the Extremadura region of southwest Spain. Hesperian Metals has executed an option and exploration agreement to purchase some 470 km² of mining and exploration tenements.

Regionally, Pompeya is within the Ossa—Morena Zone of the Iberian Massif and contains Lower Cambrian Carbonates, intruded by igneous rocks from the Hercynian Orogeny. The physical-chemical interaction between these intrusive bodies and carbonate host rocks rich in calcium and/or magnesium develops mineralised skarns, which include magnetite, tungsten, copper, and gold skarns. Skarn deposits are some of the largest sources of tungsten in the world, with some of the largest deposits located in China.

The Pompeya region contains multiple historic magnetite (iron ore) mines hosted in skarn deposits. However, the potential for Tungsten deposits was not recognised until recently. Early surface sampling was conducted after some mineralogical samples identified tungsten-bearing ore (scheelite) via UV field surveys. Scheelite, calcium tungstate (CaWO₄), is one of the most common tungsten sources, representing 65% of the world’s production, and is fluorescent under short-wave UV where it appears bright blue.

Figure 1 scheelite exposure under UV light at Pompeya project.

In addition to the UV field surveys, four rock samples were collected from skarn outcrops; these were sent to ALS Labs in Seville and returned between 3.3% and 4.8% Tungsten Oxide. These are significant assay results and justify further exploration.

Given the assay results, mineralised skarns, historic mine workings, and previously undiscovered Tungsten mineralisation, Pompeya has substantial mineral potential in the view of Cadence management. The next steps will be conducting detailed geological mapping alongside a comprehensive sampling programme and scout exploration drilling to identify potential mineral resource targets.

Figure 2 top skarn outcrop at old mines working, bottom sample from out crop under UV light.

Sarzeda

The Sarzeda project is in eastern Portugal, approximately 19km west of Castelo Branco and covers some 57km² The area contains several mineral deposits which were intermittently mined between 1916 and 1951. Hesperian has signed an option agreement to acquire these exploration concessions..

The area includes the old mines of Das Gatas (Mina do Vale da Carreira), Barroca da Santa, Pomar (Galdins), Casalinho, Monte da Goula, and Ficalho. The Das Gatas, Barroca da Santa, and Pomar mines were exploited from 1935 to 1951, mainly for antimony and tungsten.

The Das Gatas mine was exploited in the 1930s and 1940s. The workings extend from the surface to a vertical depth of 75 meters and 250 meters along the strike. The local plant produced an antimony concentrate with a high gold content; the precious metals were not recovered on-site.

Of particular interest are the old mine waste dumps, which were sampled and assayed in the 1980s and yielded significant gold results. Fifteen samples were taken, and the gold grades ranged between 0.4 g/t and 109.9 g/t, with a median grade of 30.9 g/t.

The Sarzeda project is within the Variscan Iberian Antimony Belt. The belt includes numerous old workings and mineralised deposits and can be followed for more than 400 kilometres W-E from central Portugal to southern Spain. Most known deposits are hosted in the Cambrian Schist-Graywacke Complex rocks and metasediments of Ordovician-Silurian age.

Tungsten

These Projects are expected to complement Cadence’s other investments in critical minerals needed for energy and technology markets.

Tungsten and its alloys stand out as some of the hardest metals, with tungsten boasting the highest melting point among all pure metals at 3,422°C. This unique combination of hardness and high-temperature resistance makes it a top choice for a wide range of commercial and industrial applications.

With its economic significance and limited substitution options, tungsten holds a strategic position in many global markets. The US, EU and UK all recognise its critical role, and have classified tungsten as a strategic raw material due to its economic importance, supply risks, and lack of viable substitutes. This underscores the gravity of tungsten’s role in the global economy and its irreplaceable value.

Tungsten carbide, with a hardness that rivals that of diamond, is a common choice for cutting tools and wear-resistant materials. Tungsten also finds applications in a diverse range of industries, including transportation (such as aircraft manufacturing and railways), mining, construction, defence, medical (for X-ray tubes and radiation shields), consumer electronics (like smartphones), and chemical products. Furthermore, tungsten and tin-based materials are currently under evaluation for potential use in lithium-ion batteries.

Details of the Letter of Intent with Hesperian

The LOI outlines the principal terms of the earn-in agreement to acquire up to 40% of Pompeya and Sarzeda. The decision to invest and investment stages are outlined below.

Hesperian and Cadence have agreed to an exclusivity period terminating in the Q1 of 2025. Cadence will complete its full due diligence during this period, and both parties will look to finalise a definitive investment agreement. Cadence will update the market as and when necessary.

Subject to a successful outcome to the due diligence and at Cadence’s option, Cadence will invest €430,000 over 6 months to fund early exploration costs, including surface mapping, initial scout drilling and sampling over Pompeya and reconnaissance exploration work at Sarzeda (“Phase 1 Exploration”). In addition, Cadence will issue Hesperian €175,000 of new ordinary shares in Cadence upon entering into a definitive investment agreement with Hesperian. These shares will be subject to a 12-month lock-in. In consideration of the Phase 1 Exploration investment and the issue of shares, Cadence will receive 15% interest in the Projects via such an interest in the relevant project licences.

After the completion of Phase 1 Exploration, and at its option, Cadence can invest a further €2,000,000 over 24 months to fund advanced exploration costs, including drilling priority targets and, if applicable, mineral resource development (“Phase 2 Exploration”). In addition, Cadence will issue Hesperian €600,000 of new ordinary shares in Cadence, which will be subject to a 12-month lock-in. In consideration of the Phase 2 Exploration Investment and the issue of shares, Cadence will receive a further 25% interest in the Projects at licence level.

If Phase 2 Exploration is successful, Cadence will have a first right of refusal to enter into a joint venture with Hesperian to explore and develop the Projects further.

Fundraise

Cadence intends to finance the potential investment into the Projects via an institutional placing and as has raised, subject to Admission, £1 million before expenses (the “Placing”) by way of a placing arranged by Fortified Securities of 66,666,667 new ordinary shares (the “New Ordinary Shares”) in the capital of the Company at a price of 1.5 pence per Ordinary Share (the “Issue Price”). In addition, Cadence has issued of the will issue 1,666,667 new ordinary shares to the introducers of the Projects for a consideration of £0.025 million, which will be subject to a 12-month lock in (“Introducer Shares”).

The Issue Price represents a discount of approximately 42% per cent to the closing bid price of 2.6 pence per ordinary share on 16 December 2024, the latest practicable business day before the publication of this Announcement.

Application will be made for the admission to trading on the AIM market (“AIM”) of London Stock Exchange plc (“LSE”) for the New Ordinary Shares and the Introducer Shares (“Admission”). Admission is expected to occur at 8.00 a.m. on or around 24 December 2024. The New Ordinary Shares and Introducer Shares will represent approximately 23 per cent of the Company’s issued share capital immediately following Admission.

Following Admission, the Company’s issued and fully paid share capital will consist of 295,971,037 Ordinary Shares, all carrying one voting right per share. The Company does not hold any Ordinary Shares in treasury. The figure of 295,971,037 Ordinary Shares may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.

The New Ordinary Shares will be issued fully paid and will rank pari passu in all respects with the Company’s existing Ordinary Shares.

Use of Funds

The net proceeds of the fundraising will be used to fund Cadence’s investment in Hesperian Metals and, its continued investment in the Amapá Iron Ore Project in Brazil and associated working capital.

Update on the Amapá Project

Cadence and our joint venture partners continue to have productive conversations with potential partners and/or project equity financiers to complement the project debt financing as outlined in our announcement AIM 30 October 2023. Cadence management believes that developing the DR-grade flow sheet will further these discussions. Once a binding material contract is in place, Cadence will inform shareholders.

In April and September of this year, the Amapá Project submitted all the requested applications and environmental studies for Amapá’s mine, railway, and port. This application was in the form of the Environmental Control Plan, “PCA” (Plano de Controle Ambiental), and an Environmental Control Report, “RCA” (Relatório de Controle Ambiental). These applications and submissions are a pre-requisite for the Amapá State Environmental Agency (“SEMA”) to grant the Amapá Project its installation licenses, which are required to commence the rehabilitation and construction of the Amapá Project.

Our joint venture has continued to engage with SEMA and other relevant authorities. SEMA recently requested that the Amapá project obtain standard clearances from federal, state, and municipal authorities for the railway license. These have been submitted, and we are awaiting responses. We have requested an update regarding the timeline and will inform the market once SEMA has provided guidance.

Amendment to Loan Facility

The Company has agreed to an amendment to the loan facility, which was announced on AIM 26 May 2023. The amendment varies the repayment profile and maturity date. The amended loan facility has a principal repayment holiday until March 2025, with the remaining balance being paid in eight equal instalments ending in November 2025. The Loan Facility has an effective annual interest rate of 9.5%.

About Hesperian Metals, S.L

Hesperian Metals, S.L. is a privately owned company dedicated to the exploration and development of antimony and critical mineral projects across the historic Iberian Peninsula. Their mission is to address the modern-day supply shortfall of essential minerals through sustainable and innovative mining practices.

With a diverse and experienced team, Hesperian Metals leverages in-depth regional knowledge to unlock the rich endowment of historic mines in Iberia. They are committed to meeting the global demand for critical commodities, particularly antimony, which plays a vital role in various industries.

Their approach is rooted in sustainability and innovation, ensuring that our operations not only contribute to the global supply chain but also promote environmental stewardship and community engagement.

Further information on Hesperian can be found here.

For further information contact:
Cadence Minerals plc	+44 (0) 20 3582 6636
Andrew Suckling
Kiran Morzaria

Zeus (NOMAD & Broker)	+44 (0) 20 3829 5000
James Joyce
Darshan Patel

Fortified Securities – Joint Broker	+44 (0) 20 3411 7773
Guy Wheatley

Brand Communications	+44 (0) 7976 431608
Public & Investor Relations
Alan Green

Cadence Minerals #KDNC – PFS Level Economic Study for the Amapa Iron Ore Project Increases Net Present Value to US$1.97 Billion

3rd December 2024 / Leave a comment

Cadence Minerals (AIM: KDNC), the AIM-quoted investment company, is pleased to announce an updated Pre-Feasibility Study (“PFS”) on the Amapá Iron Ore Project (“Amapá”, “Project” or “Amapá Project”), in northern Brazil. Cadence owns an equity stake of 34.6% in the Project. The updated PFS is based on the Direct Reduction grade (“DR-grade”) flow sheet announced on AIM: 26 November 2024.

Highlights:

73%[1] increase of post-tax Net Present Value (“NPV_10%“) to US$1.97 billion and 56% internal rate of return (“IRR”).
Average annual free cash flow from start-up to closure is estimated to be US$342 million.
The Project is estimated to generate a total of US$9 billion in gross revenues, US$4.9 billion in net operating profit and US$4.6 billion in free cash flow over its 15-year mine life.
Revised processing plant design to produce 5% Iron (“Fe”) DR-grade iron ore concentrate at an average[2] rate of 5.5 million metric tonnes per annum (“Mtpa”).
Free on Board (“FOB”) C1 Cash Costs US$33.7 per dry metric ton (“DMT”) at the port of Santana. Cost and Freight (“CFR”) C1 Cash Costs US$61.9/DMT in China.
Pre-production capital of US$377 million, and the payback period is reduced to 3 years due to higher free cash flows.

Cadence CEO Kiran Morzaria commented: “This significant update to the Amapá Prefeasibility Study, which includes the DR-grade concentrate flow sheet, reinforces our firm belief that the project can add substantial value to Cadence. The increased net present value of $1.97 billion and improved post-tax internal rate of return reflect significant advancements in the project’s robust economics.

The Amapá Project represents a well-developed and largely de-risked opportunity, featuring established mineral reserves, advanced environmental permitting, and complete control of integrated rail and port infrastructure. This ownership and control of the infrastructure contribute to the project’s low-cost base and will enable the pursuit of regional expansion opportunities, with substantial resources located within 30 kilometres of the existing rail line. In addition to the DR-grade flow sheet, the project will use 100% renewable energy sources. We anticipate this will help us achieve one of the lowest carbon footprints in the region while still delivering a robust and highly profitable project.

We are excited about the potential of the Amapá Iron Ore Project and look forward to providing further updates on our progress.”

Chairman Andrew Suckling added: “The Amapa Project is now emerging as a material “green iron” project, backed by product quality and highly competitive economic metrics. We are at this juncture due to the tireless efforts of the Board and Project team, and I’d like to put on record my thanks and gratitude to them and our shareholders and stakeholders. I look forward to Amapa playing its part in “green steel” production and the decarbonisation of the iron and steel industry.“

Table 1 Key Project Metrics (100% project basis)

Metric	Unit	Revised PFS July 2024	Updated DR Grade PFS Nov 2024
Total ore feed to the plant	Mt (dry)	176.93	176.93
Life of Mine	Years	15	15
Fe grade of ore feed to the plant	%	39.34	39.34
Recovery	%	76.27	75.27
62.0% iron ore concentrate production	Mtpa	0.95	–
65.4% iron ore concentrate production	Mtpa	4.51	–
67.5% iron ore concentrate production	Mtpa	–	5.52
C1 Cash Costs FOB *	US$/DMT	33.50	33.75
C1 Cash Costs CFR **	US$/DMT	62.19	61.93
Pre-Production capital investment***	US$M	343	377
Sustaining capital investment over life of mine****	US$M	245	220
AISC Cash Costs FOB*****	US$/DMT	45.22	47.38
Platts TSI IODEX 65% Fe CFR used	US$/DMT	118.75	120.00
Post-tax NPV_10%	US$M	1,145	1,977
Post-tax IRR	%	42	56
Project payback	Years	4	3
Total profit after tax (net operating profit)	US$B	3.14	4.96

*	Means operating cash costs, including mining, processing, geology, occupational health and safety environment, rail, port and site G&A, divided by the tonnes of iron ore concentrate produced. It excludes royalties and is quoted on a FOB basis (excluding shipping to the customer).
**	This means the same as C1 Cash Costs FOB; however, it includes shipping to the customer in China (CFR).
***	Includes direct tax credit rebate over 48 months
****	Includes both sustaining capital and deferred capital expenditure, specifically, improvements to the railway, the installation of a slurry pipeline and mine site to rail load out
*****	Includes all the C1 Cash Cost, plus royalties, pre-production capital investment and sustaining capital investment over the life of the mine and is quoted on a FOB basis

Introduction

The Project comprises an open-pit iron ore mine, a processing and beneficiation plant, a railway line, and an export port terminal. The Amapá Project is 100% owned by DEV Mineração S.A. (“DEV”) and its subsidiaries. DEV is owned by Pedra Branca Alliance Pte. Ltd. (“PBA”), a joint venture (“JV”) between Cadence and Indo Sino Trade Pte Ltd (“Indo Sino”).

The Project ceased operations in 2014 after the port facility suffered a geotechnical failure, which limited iron ore export. Before the cessation of operations, the Project generated an underlying profit of US$54 million in 2012 and US$120 million in 2011. Operations commenced in December 2007, and in 2008, the Project produced 712 thousand tonnes of iron ore concentrate. Production steadily increased, producing 4.8 Mt and 6.1 Mt of iron ore concentrate products in 2011 and 2012, respectively.

Cadence and Indo Sino, through their JV, acquired 100% of DEV’s shareholding in 2022 through the submission of a judicial restructuring plan approved by the unsecured creditors. As part of this plan, DEV sought to redevelop the Amapá Project. This strategy includes a plan to resume operations after plant revitalisation and modifications, aimed at improving product quality and increasing recovery, along with recovery of the port, railway, and support areas.

It should be noted that Indo Sino and Cadence have managed this PFS, and it represents an update to the PFS published on AIM: 3 January 2023 and the revised PFS published on AIM: 9 July 2024. In particular, this updated PFS has been prepared to reflect the 67.5% Fe concentrate flow sheet.

Location

The Project is in Amapá state. Amapá is Brazil’s second least populous state and the eighteenth largest by area. Most of the Amapá state territory is rainforested, while the remaining areas are covered with savannah and plains. The State capital and largest city is Macapá (pop. circa 500,000), with the municipality of Santana (pop. circa 120,000) located just 14km to the southwest.

The Amapá mine is some 125km northeast of the state capital, Macapá, and the port facility is located on the Amazon River in the municipality of Santana, close to Macapá, as shown in (Figure 1). The port site in Santana is located 170km from the mouth of the Amazon River. The nearest populace centre to the Amapá mine is Pedra Branca Do Amapari, some 11km west, with the larger town of Serra do Navio 18 km northwest.

Figure 1 Location of the Amapá Project

Amapá Project Components

The Amapá Project PFS encompasses four distinct but completely integrated operational components that formed part of the original PFS. The four areas are:

Amapá Mining Complex: An open-pit iron ore mine with various open pits, an iron ore concentration and beneficiation plant, associated waste rock dumps, and a tailings management facility.

Railway Line: Integrated 194 km railway line connecting Serra do Navio to the port terminal at Santana. The rail passes via Pedra Branca do Amapari (180 km from the port), located 13 km from the Amapá mine and the plant.

Export Port Terminal: An integrated industrial port site, privately owned and controlled by DEV, is located in Santana. The terminal had the capacity for loading the Supramax and Handymax vessels.

Transhipment Solution: A Capesize vessel is partially loaded at the berth in Santana port and topped off in the open ocean, 200 nautical miles from the berth.

Updated Pre-Feasibility Study

As announced on AIM: 26 November 2024, the Amapá Iron Ore Project completed its metallurgy test work and successfully produced a DR-grade iron ore concentrate. The updated PFS investigates all the design, engineering, and business parameters required to implement the DR-grade flow sheet at a rate of 5.5 Mtpa (dry basis)/6.03 Mtpa (wet basis). This comprises the mine schedule published in July 2024 and the processing plant and associated infrastructure required for DR-grade concentrate production.

Mining Schedule

The improved flow sheet’s annual feed rate (“ROM”) is 13.99 Mtpa (wet base). The mining schedule prepared for the revised PFS published earlier in the year was utilised for this purpose. The mine engineering and design work for this PFS, including equipment requirements and mining strategy, have been undertaken by Wardell Armstrong International. These works have been conducted at the PFS level and incorporate an Ore Reserve Estimate for open pit mining, which was prepared under the guidelines of the JORC Code (2012). The Ore Reserve for the Amapá Project is at 195.8 million tonnes, with an average grade of 39.34% Fe and a cut-off grade of 25% Fe.

A Life of Mine (“LOM”) production plan was scheduled using the Deswik.Blend® Scheduler Optimiser. The solids used in the mine schedule were based on the final pit design, with a Selective Mining Unit of 100m x 200m x 4m. The LOM schedule allows for 15 years of production with the current economic values and cut-off of 25% Fe.

The resultant LOM strip ratio is approximately 0.4:1 (tonnes waste: tonnes ore), and the average ore mine delivered to the plant is 13.99 Mtpa. A site plan of the pits and phases is outlined in (Figure 2).

Figure 2 Open Pit Design Phases

Processing Plant

Pei Si Engineering Incorporated conducted the test work and designed the flow sheet. The metallurgical test work established that the optimal flow sheet utilised a regrind, which feeds into a low-intensity magnetic separator. This process produces two streams: the first stream goes to a reverse flotation circuit, while the second stream is sent to a high-intensity magnetic separator, followed by a second reverse flotation circuit. As a result of the above, the following main changes were made to the original PFS flow sheet published in January 2023.

Removing the jigging circuit, with the iron being recovered via the grinding, magnetic, and flotation circuits. This improves the iron recovery rate.
Replacing hydrocyclone desliming with thickeners, improving classification efficiency and lowering power consumption.
The 67.5% flow sheet will remove the 62% product stream, eliminating the spiral circuit. This will shorten the process flow and reduce power consumption.
Adding a flow sheet to improve iron concentrates from 65.4% to 67.5% via regrinding the material from the magnetic separator, meaning finer particles can be further liberated, improving iron concentrate grade to 67.5%.
Replacement of all slurry, water, and reagent pumps involved in the beneficiation process.
Due to a single concentrate product, the conveyor transport is replaced by a slurry pipeline and filtrate water return pipeline, reducing operating and capital costs.
The particle size of the concentrate after the tower mills is too fine to be filtered by the existing vacuum disc filters. Therefore, horizontal press filters are required to ensure the moisture content of the filter cake is no greater than 8%.
A train loading system will be built in the train loading area.

An outline of the plant layout is shown in (Figure 3)

Figure 3 DR-Grade Plant Layout

Cost Estimates

To evaluate the project’s economics, an updated PFS financial model, which included the updated mining schedule, capital costs (“CAPEX”), operational costs (“OPEX”), and revised product price, was developed. All other aspects of the financial analysis remained the same as per the revised PFS published in July 2024.

The CAPEX estimate is based on the layout for all areas of the Project and is supported by mechanical equipment lists and engineering drawings. The costs for these items have been derived from informal vendor quotes for the equipment and materials or consultant engineering databases. Parts of the CAPEX estimate are after tax (with the duties and taxes deemed recoverable calculated separately), include contingency, and exclude escalation. The CAPEX estimate includes all the direct and indirect costs, local taxes and duties and appropriate contingencies for the facilities required to bring the Project into production, as defined by a PFS-level engineering study. As this is a PFS, the cost accuracy is estimated at ± 25% and has a base date of June 2022 and November 2024. Pre-production, deferred and sustaining summaries of the capital cost estimates are provided below. Pre-production CAPEX has increased due to the equipment required to achieve the DR-grade product. However, the variance in the total CAPEX has been reduced. This is a result of producing one product stream, which uses a slurry pipeline to transport the concentrate from the mine to the rail loadout station rather than a conveyor.

Table 2 Pre-Production Capital Cost Estimates

Description	Revised PFS July 2024 (US$M)	Updated DR GradePFS Nov 2024 (US$M)
Direct Capex Mining	2.8	2.8
Direct Capex Beneficiation Plant	104.4	133.7
Direct Capex Rail	28.5	28.5
Direct Capex Port	113.9	113.9
Sub-total Direct Capex	249.6	278.9
Sub-total Indirect Capex	55.7	56.4
Environment and Community Cost	7.1	6.8
Deduct Tax Credit	-14.6	-14.0
Contingency	44.7	49.2
Pre-Production Capex Costs	343.2	377.5

Table 3 Deferred, sustaining, and closure capital costs over LOM.

Description	Revised PFS July 2024 (US$M)	Updated DR Grade PFS Nov 2024 (US$M)
Railway (2^nd Phase)	20.0	20.0
Tailings Storage Facility	9.8	9.8
Pipeline Construction / Conveyor	60.5	33.6
Pipeline Construction – EIA/RIMA	0.4	0.3
Contingency	–	9.6
Stay in Business	90.7	84.4
Closure Costs	62.8	62.8
Total Deferred Capital Costs	244.5	220.5

OPEX for the Project has been prepared based on the Project physicals, detailed estimates of the consumption of key consumables based on those physicals, and the unit cost of consumables.

The periods considered are annual, and production follows the production plan produced by DEV, based on a yearly output of 5.5 Mtpa of DR-grade (dry basis) / 6.03 Mtpa (wet basis). OPEX comprises physicals, labour, reagents and operating consumables, freight and power costs, mobile equipment, utilities, maintenance and mining contract costs, external contractor costs, environmental, and miscellaneous/other General and Administrative (G&A) expenses. OPEX estimates were prepared or advised by independent consulting engineers. The estimate is supported by engineering, benchmarking, and pricing of key consumables and costs derived from past production figures and informal quotes from suppliers. The table below illustrates the operating costs developed by discipline during the PFS. The project FOB and CFR average cash cost per tonne of dry product over the LOM is summarised below. Overall cash costs have been reduced primarily due to the use of the slurry pipeline, which has reduced the plant costs. Mining costs have increased due to the lower recovery rate.

Table 4 FOB and CFR average cash cost per tonne of dry product over the LOM

Cash Cost Per Discipline	Revised PFS July 2024	Updated DR Grade PFS Nov 2024
	US$/DMT	US$/DMT
Mine	16.73	17.65
TSF	0.08	0.09
Beneficiation Plant, Pipeline, Transfer & Rail Loading	10.94	10.50
Rail Freight	2.43	2.26
Port	1.55	1.52
G & A	1.77	1.74
FOB Cash Costs	33.50	33.75
Marine Logistics	28.70	28.18
CFR Cash Costs	62.20	61.93

DR-Grade Pricing Mechanism

Steel contributes about 8% of global carbon emissions, potentially reaching 12% by 2035. The industry is shifting from traditional Blast Furnace and Basic Oxygen Furnace (“BF/BOF”) methods to Direct Reduced Iron and Electric Arc Furnace (“DRI/EAF”) processes to promote greener production. While BF/BOF emits around 2.2 tons of CO₂ per ton of steel, DRI/EAF can reduce this to 0.3-1 per ton with hydrogen. Wood Mackenzie projects EAF’s share will grow from 28% to 38% by 2033, supported by significant government funding to reduce emissions and increase DRI/EAF capacity.

Due to its strong slag rejection capabilities, the BF/BOF process efficiently processes a wide range of iron ore grades. In contrast, the EAF is sensitive to impurities, making low-grade iron ore with high impurity levels problematic for yield and increasing electricity consumption and slag production. Thus, the EAF requires iron ore with over 67% purity and gangue elements like SiO₂ and Al₂O₃ below 2.5%, as shown in (Figure 4).

Figure 4 Summary of Iron Ore Content and Gangue[3]

The drive to decarbonise industries and the rise in DRI and EAF steel production are increasing demand for DR-grade pellet feed, like that envisaged to be produced at Amapá. CRU, a globally recognised consulting firm, estimates that 2050 demand for DR-grade pellet feed is expected to reach 310 million tonnes. In Europe, regulatory pressures to cut emissions further drive demand. However, a significant supply shortfall of about 100 million tonnes is anticipated, necessitating new DR-Grade iron ore projects.

Iron ore is primarily traded on a CFR or FOB basis. CFR transactions transfer ownership upon unloading at the destination and include shipping costs. Due to the lack of transparent indices for products like Amapá’s, the industry recommends using a comparable index with adjustments. The Platts TSI IODEX 65% Fe CFR China is the closest benchmark for assessing Amapá’s DR-Grade product, with an additional premium for the DR-grade material.

The 65% Fe Index for the updated PFS was evaluated using various methods. Price forecasts available in the public domain from Wood Mackenzie (US$92.50/DMT), CRU (US$96.00/DMT), and Fastmarkets (US$120.00/DMT) were considered. Historically, the 3-year trailing price averages US$152.20/DMT, and the 5-year average is US$135.70/DMT¹. Based on these considerations, Amapá has used US$120.00/DMT, an increase of US$1/DMT compared to the Project’s previously published PFS.

It is generally agreed that DR-grade iron ores should command a premium over the 65% Fe Index. It is anticipated that the Amapá DR-Grade, given its beneficial properties, will qualify for this premium. One recognised industry assessment technique for product premiums involves utilising a Value in Use (“VIU”) methodology. This approach entails determining a premium or discount by considering Fe, SiO₂, and Al₂O₃ variations compared to the 65% Fe. Amapá has used the premium attributed to the Kamistiatusset Iron Ore Property (“Kami”) in Newfoundland as a guide to determine and assist the Value in Use (VIU) analysis. This analysis suggests a premium of about US$24.8/DMT, though this may not fully account for green premiums or carbon savings.

Table 5 Comparative product specification between Kami and Amapá iron ore projects.

Product	TFe%	SiO₂%	Al₂O₃%	P%	TiO₂%	CaO%	MgO%	US$ Premium / DMT
Amapá Concentrate	67.5	0.6	0.84	0.08	0.02	0.03	0.03	27.6
Kami Concentrate	67.6	2.1	0.25	0.02	0.03	0.3	0.35	24.8

Project Financial Analysis

A PFS financial model was developed to evaluate the project’s economics. Summary results from the financial model outputs, including financial analysis, are presented in tables within this section. The financial model considers 100% equity funding for the Project, although, in reality, the financing of the Project will be a mix of debt and equity. However, the existing obligations in terms of principal repayment and current interest liabilities payable have been included in the financial model.

The product change and increased premium associated with DR-grade iron ore concentrate are primary economic drivers to changes in the financial model compared to the revised PFS published in July 2024.

Table 6 Summary of key financial information for the Project.

Item Over Life of Mine	Unit	RevisedPFS July 2024	Updated DR GradePFS Nov 2024
Gross revenue	US$M	9,389	11,242
Freight (Maine Logistics)	US$M	(2,351)	(2,188)
Net Revenue	US$M	7,038	9,054
Operating costs	US$M	(2,744)	(2,621)
Royalties and taxes (excluding income tax)	US$M	(373)	(460)
EBITDA	US$M	3,922	5,973
EBIT	US$M	3,547	5,586
Net Taxes and Interest	US$M	(390)	(621)
Net Operating Profit	US$M	2,144	4,964
Initial, Sustaining capital costs & repayments	US$M	(645)	(656)
Free Cash Flow	US$M	2,672	4,696

Item	Unit	RevisedPFS June 2024	Updated DR Grade PFS Nov 2024
Life of mine	Years	15	15
Discount rate	%	10	10
NPV_10%	US$M	1,145	1,977
IRR	%	42	56
Project Payback	Years	4	3

Project Sensitivity Analysis

A sensitivity analysis was performed on key parameters within the financial model to assess the impact of changes on the project’s post-tax NPV (debt-free). To examine the sensitivity of the Project base case NPV, each cost factor’s economic and operational conditions were independently varied within a range of +/—25%, and discount rates were changed within the 8%-15% range.

Project sensitivity analysis demonstrates that the Amapá Project is most sensitive to a change in iron ore concentrate price, followed by logistics costs (marine shipment charges) and operating costs. It was least sensitive to deviation in CAPEX (Figure 5)

Figure 5 Project Sensitivity Analysis (NPV_10%)

Cadence Ownership

As of the end of November 2024, Cadence’s total investment in the Amapá Project is approximately US$14.3 million, and its equity stake in the project stands at 34.6%.

For further information contact:
Cadence Minerals plc	+44 (0) 20 3582 6636
Andrew Suckling
Kiran Morzaria

Zeus (NOMAD & Broker)	+44 (0) 20 3829 5000
James Joyce
Darshan Patel
Fortified Securities – Joint Broker	+44 (0) 20 3411 7773
Guy Wheatley

Brand Communications	+44 (0) 7976 431608
Public & Investor Relations
Alan Green

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.

Cautionary and Forward-Looking Statements

Certain statements in this announcement are or may be considered forward-looking. 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 crucial 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 results will be consistent with such forward-looking statements.

[1] Compared with revised PFS published on AIM: 9 July 2024

[2] Average after one year ramp up until year 14 of mine life

[3]. Champion Iron Limited Pre-feasibility Study for the Kamistiatusset (Kami) Iron Ore Property. [online] Available at: https://company-announcements.afr.com/asx/cia/1e8c4153-e249-11ee-b0cc-26a478d59520.pdf [Accessed 1 Dec. 2024]

Cadence Minerals #KDNC – Interim Results for the six months ended 30 June 2024

27th September 2024 / Leave a comment

Cadence Minerals plc (AIM/AQX: KDNC) is pleased to announce its interim results for the six months ended 30 June 2024.

Despite the poor commodity and macro backdrop, our primary investment, the Amapá Iron Ore Project, has progressed well. The three targets we set for the year are either completed or scheduled to be completed by year-end.

Highlights for Amapá Project progress made in the period and post-period end include:

The completion of optimisation studies resulting in a 20% increase of Post-tax Net Present Value (“NPV”) to US$1.14 billion, with profit after tax of US$3.14 billion over the Life of Mine
A 10% increase in average production after ramp-up to 5.82 million dry metric tonnes per annum (“Mtpa”) of Fe concentrate, consisting of 4.81 Mtpa at 65.4% Fe and 1.01 Mtpa at 62% Fe concentrate.
A 6% decrease in Free on Board C1 Cash Costs to US$33.5/dry metric tonne.
The submission of required environmental studies and applications for the grant of the installation licenses at the Amapá Project.
The completion of the design of a 67% iron ore concentrate flow sheet, with testing of the design currently underway.

The immediate focus of the Amapá Project is financing the next stage of development, a goal to which all the partners are fully dedicated. We believe this should be done via a trade sale or a joint venture with a highly experienced mining operator.

We are actively working towards this goal and are currently discussing with potential joint venture partners. These processes take time with extensive due diligence and contract negotiations, and we know that shareholders want to be informed about the detailed progress; however, for commercial reasons and listing rule requirements, we will only announce once a material contract has been executed.

Our other main investments are in the lithium sector. With lithium prices down some 80% over the last twelve months, we have seen a reduction in lithium equities, with the average producer down some 38% during the current year. As our investments are in either early-stage exploration or development assets, the decrease in equity price was the primary driver of our losses during the period.

Nonetheless, we see positive indications in the lithium market, with market commentators forecasting improvements in 2025 and supply shortfalls in the 2030s. However, it should be noted that we should not expect lithium prices to return to levels seen in 2022 in the short to medium term. Lithium demand is still growing significantly, so prices should improve over the coming year.

Investment Review

As outlined in the section “Our Business and Investment Strategy,” Cadence operates an investment strategy in which we invest in private projects via a private and public equity model. In both investment classes, we take either an active or passive role. We have reported in these segments below.

Private Investments, Active

The Amapá Iron Ore Project, Brazil (“Amapá” or “Project”)
Interest – 33.12% at 31/12/2023 and 34.14% at 30/06/2024

The Amapá Project is a large-scale iron ore mine with associated rail, port, and beneficiation facilities. It began operations in December 2007 but ceased in 2014 due to a geotechnical failure at the port facility, which limited iron ore export. Before closing, the Project made an underlying profit of US$54 million in 2012 and US$120 million in 2011. In 2008, the Project produced 712 thousand tonnes of iron ore concentrate, and production increased to 4.8 million tonnes in 2011 and 6.1 million tonnes in 2012.

Investment

In 2019, Cadence entered into a binding investment agreement to invest in and acquire up to 27% of the Amapá iron ore mine, beneficiation plant, railway, and private port owned by DEV Mineração S.A. (“DEV”). The agreement also gave Cadence a first right of refusal to increase its stake to 49%.

To acquire its 27% interest, Cadence invested US$6 million over two stages in a joint venture company, Pedra and Branca Alliance (“PBA”). This investment was completed in the first quarter of 2022. Since then, Cadence has invested another US$7.29 million for a further 7.14% equity. At the end of the period, Cadence Minerals had invested some US$13.8 million for 34.14% in the Project.

Operations Review

During the reporting period, we continued to develop the Amapá Project. Our main operational goals for this year were to complete our environmental applications, reduce capital expenditure, improve Project economics, and resume testing to produce a high-grade 67% iron ore concentrate.

These targets had been mainly achieved at the time of writing. Subsequently, we reported on capital costs and increased mining during the period, which delivered a 20% increase in the Project’s Net Present Value. We also submitted all the required environmental license applications, which should be granted by the end of 2024.

We have started testing the flow sheet design we developed during the period, which we expect to be completed in the fourth quarter of this year.

Updated Pre Feasibility Study (“PFS”)-level economic study

In March this year, the Amapá Project announced the results of the optimisation study, which delivered material capital savings to the Project. The Amapá Project carried out an updated PFS-level economic analysis based on these results.

Updated Mining Schedule

As part of the optimisation work, engineering consultants identified higher availability at the processing plant, which increased the annual run-of-mine feed rate to the processing plant. As a result, the mining and other related engineering disciplines had to be re-examined, and in particular, the mine schedule had to be recalculated to optimise the Project’s NPV.

As a result, a new life of mine production plan was scheduled. This revised schedule allows for 15 years of production with the current economic values and a cut-off of 25% Fe. The resultant life of the mine strip ratio is approximately 0.4:1 (tonnes waste: tonnes ore), and the average ore mine delivered to the plant is 13 million metric tonnes per annum.

Project Financial Analysis

An updated PFS financial model, which included the updated mining schedule, lower capex, and lower operational costs, was developed to evaluate the Project’s economics. All other aspects of the financial analysis remained the same as per the PFS published in January 2023. Summary results from the economic model outputs are presented in the table below. The financial model considers 100% equity funding for the Project, although the financing of the Project will be a mix of debt and equity. A summary of the key financial information is presented below, alongside the 2023 PFS data.

Table 1.1 Key Project Metrics (100% Project basis)

Metric	Unit	2023 PFS Data	2024 PFS Data
Total ore feed to the plant	Mt (dry)	176.88	176.93
Life of Mine	Years	16	15
Fe grade of ore feed to the plant	%	39.34	39.34
Recovery	%	76.27	76.27
62.0% iron ore concentrate production	Mtpa	0.89	0.95
65.4% iron ore concentrate production	Mtpa	4.23	4.51
C1 Cash Costs FOB *	US$/DMT	35.53	33.50
C1 Cash Costs CFR **	US$/DMT	64.23	52.20
Pre-Production capital investment***	US$M	399	343
Sustaining capital investment over LOM****	US$M	245	245
Post-tax NPV (10%)	US$M	949	1,145
Post-tax IRR	%	34	42
Project payback	Years	4	4
Total profit after tax (net operating profit)	US$B	2.96	3.14

*	Means operating cash costs, including mining, processing, geology, OHSE, rail, port and site G&A, divided by the tonnes of iron ore concentrate produced. It excludes royalties and is quoted on a FOB basis (excluding shipping to the customer).
**	Means the same as C1 Cash Costs FOB; however, it includes shipping to the customer in China (CFR).
***	Includes direct tax credit rebate over 48 months
****	Includes both sustaining CAPEX and deferred capital expenditure, specifically, improvements to the railway and the installation of conveyor belt and mine site to rail load out

Project Permitting

As announced in September 2023 (News Release Here), the Amapá Project has agreed with the Amapá State Environmental Agency (“SEMA”) to an expedited environmental licensing process, given that the Project was previously operating and had been granted all required licenses.

The Amapá Project owns the required Mining Concessions; however, it must obtain a Mine Extraction and Processing Permit (“Mining Permit”) to begin operation. To obtain this permit, the Amapá Project must obtain an Installation License (“LI”) to begin construction and, when constructed, an Operational License (“LO”). An LI and LO are also required to build and operate the railway and port.

In April, the Amapá Project submitted the required environmental studies and applications for the Amapá mine and railway. This application was in the form of the Environmental Control Plan, “PCA” (Plano de Controle Ambiental), and an Environmental Control Report, “RCA” (Relatório de Controle Ambiental). This was followed in early September when

The Project submitted the required environmental studies and application for the LI grant for the iron ore port.

Our joint venture has continued engaging with SEMA and other relevant authorities, who have indicated that the LI for the rail and mine remain on schedule for the grant this year. Given the impact that the railway’s restart will make on local communities, the installation license for the railway is anticipated to have some conditions precedent. This is expected in any project of this nature. The Amapá Project management team always anticipated this as part of the required licensing requirements to redevelop the Amapá Iron Ore Project. Our understanding from SEMA is that, based on the current timeline, all the LIs will be granted by the end of 2024.

Secured Bank Settlement Iron Ore Shipments

As per the settlement agreement announced in December 2021 here, the net proceeds of the one shipment carried out in 2022, along with approximately half of the net proceeds from the shipments in 2021, have been used to pay the secured bank creditors.

In early 2024, we reached an in-principle agreement on a one-time settlement amount with the secured creditors and had a financing solution to make this payment. However, we could not crystallise the financing due to a longer-than-expected approval process from the secured creditors and unfavourable iron ore prices. We remain optimistic that as the iron ore price improves, we will be able to secure the funding needed to make this one-time payment.

Development Plan for the Amapá Project

The goal is to bring this Project back into production. Based on the positive results derived from the updated economic assessment at a PFS level, we are now testing the 67% iron ore concentrate product flow sheet. Once the flow sheet is proven to the PFS level, this revised flow sheet will form the basis of an amended economic assessment of the Project.

Alongside this, and based on discussion with SEMA, we expect the grant of the LIs by the end of the year, allowing the commencement of construction and the recommissioning of the Project in 2025. Of course, this will be subject to the Project securing appropriate debt and equity financing.

Cadence, along with its joint venture partner, has agreed that the lowest risk and currently the best commercial approach for our investment in the Project should be either a trade sale or a joint venture with a highly experienced mining operator. We are actively working towards this goal and discussing it with potential joint venture partners. The funding of debt and equity for the recommissioning and construction of the Project is anticipated to occur at the asset or joint venture level.

Private Investments, Passive

Ferro Verde Iron Ore, Brazil

Interest – 1% on 31/12/2023 and 30/06/2024

In 2022, Cadence invested a small amount (£0.21 million) in an advanced iron ore deposit in Brazil the previous year. The Ferro Verde Deposit is in the southern portion of the state of Bahia, in the northeastern region of Brazil, next to the town of Urandi, some 700 km southwest of Salvador, the state of Bahia. The project is currently progressing with its Definitive Feasibility Study (DFS). It has a historic inferred resource of 284 million tonnes of iron ore at 31% Fe. The intent is to produce 4.5 Mtpa of 67% Fe. Our intended exit strategy is either when the asset is listed or the owners carry out a trade sale.

Private investments, Passive

Sonora Lithium Project, Mexico

Interest – 30% on 31/12/2023 and 30/06/2024

Cadence holds an interest in the Sonora Lithium Project through a 30% stake in the joint venture interests in Mexalit S.A. de CV (“Mexalit”) and Megalit S.A. de CV (“Megalit).

In April 2022 and May 2023, the Mexican Government made changes to its Mining Law, which included prohibiting lithium concessions, declaring lithium a strategic sector, and giving a state-owned entity exclusive rights for lithium mining operations. Despite existing concessions, including those held by Mexilit and Megalit, being supposedly unaffected, the General Directorate of Mines (“DGM”) started reviewing nine lithium concessions held by Mexican subsidiaries. Mexilit and Megalit submitted evidence of compliance with minimum investment obligations, but these concessions were still cancelled.

Ganfeng and Cadence believe the cancellations violate Mexican and international law and have filed administrative review recourses. Cadence also issued a Request for Consultations and Negotiations to the Government of Mexico under the United Kingdom-Mexico Bilateral Investment Treaty regarding the revocation of mining concessions for the Sonora Lithium Project.

In their Request, Cadence and REMML have identified various BIT obligations that Mexico has breached, including Mexico’s obligation not to unlawfully expropriate the investments of UK investors such as Cadence and REMML and its obligation to treat such investments fairly and equitably.

In accordance with Article 10 of the BIT, Cadence and REMML have requested consultations and negotiations with Mexico to resolve the dispute amicably. The BIT provides for disputes to be resolved by international arbitration if they cannot be resolved through consultation and negotiation.

The affected concessions include those granted to Mexilit S.A. de CV (“Mexilit”) and Minera Megalit S.A. de CV (“Megalit”), which are joint venture companies in which Cadence holds a 30% stake through REMML.

Public Investments

The public equity investment segment is composed of passive investment. The trading portfolio consists of investments in listed mining entities that the board believes possess attractive underlying assets. The focus is to invest in mining companies that are significantly undervalued by the market and where there is substantial upside potential through exploration success and/or the development of mining projects for commercial production. Ultimately, the aim is to make capital gains in the short to medium term. Investments are considered individually based on various criteria and are typically traded on the TSX, ASX, AIM or LSE.

The movement in public portfolio values during the year is summarised below.

	Commentary	£,000
Portfolio value on 31 December 2023		4,162
Disposal of public Investments during the year	Disposal of investments held in European Metals & Hastings Technologies	(1,321)
Realised and Unrealised loss on portfolio value for the year	Realised and unrealised loss on European Metals & unrealised loss on Evergreen due to decrease in equity price	(1,902)
Portfolio value on 30 June 2024		939

As of 30 June 2024, our public equity stakes consisted of the following:

	30-Jun-24	31-Dec-23	30-Jun-23	31-Dec-22
Company	£’000	£’000	£’000	£’000
European Metals Holding Ltd	359	2,339	5,207	4,882
Evergreen Lithium Ltd	567	1,481	2,738	–
Hastings Technology Metals Ltd	–	321	1,570	–
Charger Metals NL	–	–	187	301
Eagle Mountain Mining Ltd	–	–	20	37
Miscellaneous	13	21	17	24
Total	939	4,162	9,740	5,244

Public Equity, Passive

European Metals Holdings Limited (“European Metals”)
Interest – 7.0% at 31/12/2023 and 2.96% on 30/06/2024

European Metals owns 49% of Geomet s.r.o. with 51% owned by České Energetické Závody, a.s. (“CEZ”). Geomet s.r.o. owns 100% of the Cinovec lithium deposit, which hosts a globally significant hard-rock lithium deposit with a total Indicated Mineral Resource of 372.4Mt at 0.45% Li2O and an Inferred Mineral Resource of 323.5Mt at 0.39% Li2O. This is a combined resource of 7.22 million tonnes of lithium carbonate equivalent. The Cinovec lithium deposit contains a Probable Ore Reserve of 34.5Mt at 0.65% Li2O, which covers the first 20 years of mining at an output of 22,500tpa of battery-grade lithium carbonate.22,500tpa of Lithium Carbonate).

The Cinovec lithium project has achieved key milestones, including the successful production of lithium carbonate and lithium hydroxide from the pilot programme – both to battery grade, the granting of extensions to our exploration licenses, and the selection of a significantly superior site for the lithium processing plant. It’s important to note that there have been delays in the definitive feasibility study. However, EMH’s work on important processing enhancements is expected to improve the project’s economics significantly.

Public Equity, Passive

Evergreen Lithium Limited (“Evergreen”)
Interest – 8.74% at 31/12/2023 and 8.74% on 30/06/2024

In 2023, Evergreen was listed on the Australian Stock Exchange, and Cadence’s equity stake in Evergreen was reduced to 8.74% from 13.16% due to the IPO and associated fundraising. Further shares in Evergreen are due to Cadence upon achieving certain performance milestones.

Evergreen is the 100% owner of three exploration tenements, including the Bynoe Lithium Project, Fortune Lithium Project, and Kenny Lithium Project. The Bynoe Lithium Project, located contiguous to Core Lithium’s Finnis hard rock lithium project, is considered Evergreen’s flagship prospect, offering significant exploration potential.

During the period Evergreen continued its exploration of the Byone projects, the main highlights included approving the mine management plan, which enabled drilling to commence. This was announced in July 2024, with an auger sampling program drilling short holes over areas identified as high-priority targets. Samples generated from this program will be analysed at an offsite laboratory. Results from this work will be used in conjunction with surface soil sample results to target LCT pegmatites in the future. In addition, RAB/Air Core drilling began, testing geochemical, geophysical and other targets identified in the previous exploration programmes. This drilling programme has intersected shallow pegmatites along strike from Core Lithium’s BP33 deposit. Given the early success of the current air-core drill program, RC drill planning is currently underway. RC drilling will be used to test pegmatites at depth and along strike.

FINANCIAL RESULTS:

During the period, the Group made a loss before taxation of £2.53 million (6 months ended 30 June 2023: £1.95 million, year ended 31 December 2023: £3.02 million). There was a weighted basic loss per share of 1.392p (30 June 2023: 1.163p, 31 December 2023: 1.762p). The total assets of the group decreased from £19.97 million at 31 December 2022 to £17.79 million.

During the period, our net cash outflow from operating activities was £0.32 million, and we raised gross proceeds of £0.47m via the issue of shares and a further £1.33m from the sale of our investments. Most of the capital raised was reinvested (£1.01m), with £0.55m used to pay down existing debt. As a result, our net cash position was reduced from £0.22 million to £0.13 million.

Kiran Morzaria

Director

26 September 2024

For further information contact:
Cadence Minerals plc	+44 (0) 20 3582 6636
Andrew Suckling
Kiran Morzaria

Zeus Capital Limited (NOMAD & Broker)	+44 (0) 20 3829 5000
James Joyce
Darshan Patel Isaac Hooper

Fortified Securities – Joint Broker	+44 (0) 20 3411 7773
Guy Wheatley

Brand Communications	+44 (0) 7976 431608
Public & Investor Relations
Alan Green

Cautionary and Forward-Looking Statements

The company deems the information contained within this announcement to constitute Inside Information as stipulated under the Market Abuse Regulation (E.U.) No. 596/2014, as it forms part of U.K. domestic law under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.

CADENCE MINERALS PLC

STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2024

	Notes	Unaudited Period ended 30 June 2024	Unaudited Period ended 30 June 2023	Audited Year ended 31 December 2023
		£’000	£’000	£’000

Income				–
Unrealised loss on financial investments		(1,126)	(1,319)	(3,101)
Realised loss on financial investments		(776)	(213)	(2,793)
		(1,902)	(1,532)	(5,894)

Share based payments		–	(25)	(25)
Impairment of intangibles		–	–	(905)
Loan from subsidiary written off		–	–	4,810
Other administrative expenses		(630)	(768)	(1,302)
Total administrative expenses		(630)	(793)	2,578

Operating profit/(loss)		(2,532)	(2,325)	(3,316)

Foreign exchange (losses)/gains		(1)	407	297
Finance cost		–	(36)	–
Loss before taxation		(2,533)	(1,954)	(3,019)

Taxation		–	–	–

Loss attributable to the equity holders of the Company		(2,533)	(1,954)	(3,019)

Total comprehensive loss for the period, attributable to the equity holders of the Company		(2,533)	(1,954)	(3,019)

Loss per share
Basic (pence per share)	3	(1.392)	(1.163)	(1.762)
Diluted (pence per share)	3	n/a	n/a	n/a

CADENCE MINERALS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2024

	Share capital	Share premium account	Share-based payment reserve	Investment in own shares	Retained earnings	Total equity
	£’000	£’000	£’000		£’000	£’000

Balance at 1 January 2023	2,144	37,612	252	(64)	(18,623)	21,321
Share based payments	–	–	25	–	–	25
Issue of share capital	82	42	–		–	124
Transactions with owners	82	42	25	–	–	149
Loss for the period	–	–	–		(1,954)	(1,954)
Total comprehensive loss for the period	–	–	–		(1,954)	(1,954)
Balance at 30 June 2023 (unaudited)	2,226	37,654	277	(64)	(20,577)	19,516
Transfer on lapse of warrants	–	–	(19)		19	0
Transactions with owners	–	0	(19)	0	19	0
Loss for the period	–	–	–		(1,065)	(1,065)
Total comprehensive loss for the period	–	–	–	–	(1,065)	(1,065)
Balance at 31 December 2023	2,226	37,654	258	(64)	(21,623)	18,451

Issue of share capital	167	333	–		–	500
Costs of share issue		(35)				(35)
Transactions with owners	167	298	0	0	0	465
Loss for the period	–	–	–	–	(2,533)	(2,533)
Total comprehensive loss for the period	–	–	–	–	(2,533)	(2,533)
Balance at 30 June 2024 (unaudited)	2,393	37,952	258	(64)	(24,156)	16,383

CADENCE MINERALS PLC

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2024

		Unaudited	Unaudited	Audited
		30 June 2024	30 June 2023	31 December 2023

Assets	Notes	£’000	£’000	£’000

Non-current
Financial Assets		11,857	10,530	11,660
		11,857	10,530	11,660
Current assets
Trade and other receivables		3,903	3,978	3,937
Financial Assets		1,901	10,702	4,162
Cash and cash equivalents		133	577	215
Total current assets		5,937	15,257	8,314

Total assets		17,794	25,787	19,974

EQUITY AND LIABILITIES
Current liabilities
Trade and other payables		561	348	288
Borrowings		850	565	933
Total current liabilities		1,411	913	1,221

Liabilities due after one year
Borrowings		–	611	302
Amounts owed to subsidiaries		–	4,747	–
Total liabilities		1,411	6,271	1,523

Equity
Share capital	4	2,393	2,226	2,226
Share premium		37,952	37,654	37,654
Share based payment reserve		258	277	258
Investment in own shares		(64)	(64)	(64)
Retained earnings		(24,156)	(20,577)	(21,623)

Total equity attributable
to owners of the company		16,383	19,516	18,451

Total equity and liabilities		17,794	25,787	19,974

CADENCE MINERALS PLC

CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD 30 JUNE 2024

	Unaudited Period ended	Unaudited Period ended	Audited Year ended
	30 June 2024	30 June 2023	31 December 2023

	£’000	£’000	£’000
Cash flows from operating activities
Operating loss	(2,532)	(2,325)	(3,316)
Net realised/unrealised loss on financial investments	1,902	1,532	5,894
Impairment of investments	–		905
Write off of loan from subsidiary	–		(4,810)
Equity settled share-based payments	–	25	25
(Increase)/decrease in trade and other receivables	34	(21)	20
Increase/(decrease) in trade and other payables	273	31	(29)
Net cash outflow from operating activities	(323)	(758)	(1,311)

Taxation	–	–	–

Cash flows from investing activities
Receipts on sale of current investments	1,321	935	2,150
Payments for non-current financial investments	(1,001)	(975)	(2,088)

Net cash inflow from investing activities	320	(40)	62

Cash flows from financing activities
Proceeds from issue of share capital	500	124	–
Share issue costs	(35)	–	–
Borrowings	–	1,187	1,400
Loan repayments	(557)	–	–
Finance cost	–	(12)	–
Net cash (outflow)/inflow from financing activities	(92)	1,299	1,400

Net increase/(decrease) in cash and cash equivalents	(95)	501	151
Foreign exchange movements on cash and cash equivalents	13	(34)	(46)
Cash and cash equivalents at beginning of period	215	110	110
Cash and cash equivalents at end of period	133	577	215

Material non-cash transactions

There were no material non-cash transactions in the period to 30 June 2024.

During the period to 30 June 2023 the Company acquired 2,452,650 shares in Hastings Technology Metals Ltd from its wholly owned subsidiary Mojito Resources, at a cost of AUD$ 9m (£5.152m). This amount was not paid in cash but treated as a intercompany loan from Mojito Resources. This has been treated as a non-current liability.

NOTES TO THE INTERIM REPORT

FOR THE PERIOD ENDED 30 JUNE 2024

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 2023 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 2023 financial statements, which are prepared under the historical cost convention and in accordance with UK adopted International Accounting Standards (IAS).

GOING CONCERN

The Directors have prepared cash flow forecasts for the period ending 30 September 2025. 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

The Company operates a single primary activity to invest in businesses so as to generate a return for the shareholders.

3 EARNINGS PER SHARE

The calculation of the earnings 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 2024	30 June 2023	31 December 2023

	£’000	£’000	£’000

Profit/(loss) on ordinary activities after tax (£’000)	(2,533)	(1,954)	(3,019)

Weighted average number of shares for calculating basic profit/loss per share	188,388,620	174,360,940	177,693,153
Less: shares held by the Employee Benefit Trust (weighted average)	(6,380,000)	(6,380,000)	(6,380,000)
Weighted average number of shares for calculating basic (loss)/profit per share	182,008,620	167,980,940	171,313,153
Share options and warrants exercisable	n/a	n/a	n/a
Weighted average number of shares for calculating diluted profit per share	n/a	n/a	n/a

Basic profit/(loss) per share (pence)	(1.392)	(1.163)	(1.762)
Diluted profit per share (pence)	n/a	n/a	n/a

4 FINANCIAL INVESTMENTS

Financial assets at fair value through profit or loss:
	£’000	£’000	£’000	£’000
	Level 1	Level 2	Level 3	Total

Fair value at 31 December 2022	5,244	–	12,327	17,571
Additions	5,152	–	2,048	7,200
Transfers on listings	1,810	–	(1,810)	–
Fair value changes	(3,101)	–	–	(3,101)
Impairment of assets	–	–	(905)	(905)
Loss on disposals	(2,793)	–	–	(2,793)
Disposal	(2,150)	–	–	(2,150)
Fair value at 31 December 2023	4,162	–	11,660	15,822
Additions	–	–	1,159	1,159
Fair value changes	(1,126)	–	–	(1,126)
(Loss)/Gains on disposals	(776)	–	–	(776)
Disposal	(1,321)	–	–	(1,321)
Fair value at 30 June 2024	939	–	12,819	13,758

Losses on investments held at fair value through profit or loss
Fair value loss on investments	(1,319)	–	–	(1,319)
Realised loss on disposal of investments	(213)	–	–	(213)
Net loss on investments held at fair value through profit or loss	(1,532)	–	–	(1,532)

Non-current	–	–	10,530	10,530
Current	9,740	–	962	10,702
	9,740	–	11,492	21,232

5 SHARE CAPITAL

	Unaudited	Unaudited	Audited
	30 June 2024	30 June 2023	31 December 2023
	£’000	£’000	£’000
Allotted, issued and fully paid
173,619,050 deferred shares of 0.24p (30 June and 31 December 2023: 173,619,050)	417	417	417
197,637,704 ordinary shares of 1p (30 June 2023 and 31 December 2023 180,971,037 ordinary shares of 1p)	1,976	1,809	1,809
	2,393	2,226	2,226

6 LOANS

BORROWINGS

During the year ended 31 December 2023, the Company entered into a Mezzanine Loan Facility to finance its investment in the Amapá Project.

The Mezzanine Loan Facility (“Loan Facility”) involves an unconditional and committed initial tranche by the Investors of US$ 2 million and a further conditional Loan Facility amount of US$ 8 million, subject to agreement by the Investors. The Loan Facility is valid for three years.

The First Tranche of US$ 2 million, drawn down in 2023, has a 24-month term (“Maturity Date”). It has a six month principal repayment holiday, followed by 18 equal monthly cash repayments thereafter to the maturity Date. The Loan Facility has an effective annual interest rate of 9.5% and has a 5% implementation on the value of the First Tranche.

If the Company elects not to settle a monthly payment in cash (each being a “Missed Payment”), they will automatically grant a right for the Missed Payment to be settled in shares as per the non-cash repayment terms contained in the Loan Facility Agreement (“Non-Cash Repayment”). Following a Non-Cash Repayment, the Investors will be automatically granted conversion rights over such principal and interest balances due concerning the Missed Payment. The Investors will then have the right for 12 months to convert such amounts either at a price equal to 12.7 pence (representing a 30% premium to the closing price on 25/05/2023) or at a 7% discount to the average of the five daily VWAPs chosen by the Investors in the 20 trading days preceding its conversion notice or at the price the Company issues further equity if lower than the existing conversion price.

Cadence has provided a security package to the Investors as part of the Loan Facility. This package includes a floating charge over the Company’s investments, placing its holding in European Metals Holdings into escrow and the issue of new ordinary shares to the Investors (“Initial Issued Shares”). The Initial Issued Shares represent 50% of the value of the First Tranche, or 8,251,224 new ordinary shares. These initial Issued Shares will be used as part of any Non-Cash Repayments if applicable. On the Maturity Date, the Company can utilise the Initial Issued Shares to pursue its investment strategy or for working capital purposes. If it has settled all amounts in cash and these Initial Issued Shares revert to the Company.

As part of the Loan Facility, the Company has agreed to grant 8,251,224 warrants to subscribe for ordinary shares in the Company at an exercise price of 13.2 pence (representing roughly a 35% per cent premium to the current share price of the Company’s Shares) with a 48-month term.

During the period to 30 June 2024 £557,000 ($698,000) of capital and interest was repaid in cash. During the year ended 31 December 2023, £1,622,000 ($2,000,000) less costs was drawn down. £124,000 ($153,000) was repaid through the issue of the Initial Issued Shares. The borrowing costs (and resulting fx) have been capitalised under IAS23, as the sole purpose of the loan was to finance the Amapá Project.

Cadence Minerals #KDNC – Placing to raise £500,000 and Issue of Warrants to Advance the Amapa Iron Ore Project

5th April 2024 / Leave a comment

Cadence Minerals (AIM: KDNC; OTC: KDNCY) announces that it has successfully raised, subject to Admission, £500,000 before expenses (the “Fundraise”) through the placing of 16,666,667 new ordinary shares (the “New Ordinary Shares”) in the capital of the Company at a price of 3 pence per Ordinary Share (the “Issue Price”) and the issue of warrants to the subscriber of the New Ordinary Shares in the ratio of one warrant to each one New Ordinary Share subscribed for (the “Warrant”). The Fundraise was with a single institutional investor.

The Issue Price represents a discount of approximately 43 per cent. to the closing price of 5.25 pence per ordinary share on 4 April 2024, being the latest practicable business day prior to the publication of this Announcement.

The Warrants in the Fundraise grant rights to subscribe for one additional Ordinary Share for each Warrant held in the ratio of one Warrant for every one New Ordinary Share issued to the investor. The Warrants are exercisable at a price of 5 pence per Ordinary Share and expire on 31 March 2025.

The net proceeds of the Fundraise will solely be used to fund Cadence’s investment in the Amapá Iron Ore Project in Brazil (“Amapá”, “Project” or “Amapá Project”), specifically:

Prepare a revised mine schedule, up to a Pre-Feasibility Study (“PFS”) level, to reflect an increased production of 5.5 million tonnes per annum (“Mtpa”), with 4.51 Mtpa at 65% Fe and 0.99 Mtpa at 62% Fe.
Prepare and publish a revised PFS economic model that reflects the production increase and the 33% lower plant capital expenditure, which we announced on March 22, 2024.

The sampling and testing of the 67% Fe “Green Iron” product flow sheet, to a PFS level or accuracy.
If the testing of the “Green Iron” flow sheet is successful, the preparation and publication of a revised PFS economic model to reflect the higher product quality increased production.

Working capital at the Amapá Project to fund ongoing licensing requirements, with the expectation that all the required licensing for construction will be granted by the end of 2024.

Application will be made for the admission to trading on the AIM market (“AIM”) of London Stock Exchange plc (“LSE”) for the New Ordinary Shares (“Admission”). Admission is expected to occur at 8.00 a.m. on or around 11 April 2024. The New Ordinary Shares will represent approximately 8.4 per cent. of the Company’s issued share capital immediately following Admission.

Following Admission, the Company’s issued and fully paid share capital will consist of 197,637,704 Ordinary Shares, all of which carry one voting right per share. The Company does not hold any Ordinary Shares in treasury. The figure of 197,637,704 Ordinary Shares may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.

The New Ordinary Shares will be issued fully paid and will rank pari passu in all respects with the Company’s existing Ordinary Shares.

Cadence CEO Kiran Morzaria commented: “I am pleased that we have been able to raise this money from a single investor at a pivotal time for the development and evolution of Amapá. This will enable completion of the revised PFS and fund the licensing process through to a license for construction at the end of 2024. I look forward to reporting back with further updates.”

For further information contact:
Cadence Minerals plc	+44 (0) 20 3582 6636
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 20 7220 1666
James Joyce
Darshan Patel

Fortified Securities – Joint Broker	+44 (0) 20 3411 7773
Guy Wheatley

Brand Communications	+44 (0) 7976 431608
Public & Investor Relations
Alan Green

Cadence Minerals #KDNC – Update on the Cadence Amapá Project investment and Equity Stake

28th March 2024 / Leave a comment

Cadence Minerals (AIM: KDNC; OTC: KDNCY) is pleased to announce details of its increased equity stake in the Amapa Iron Ore Project (“Amapá”, “Project” or “Amapá Project”). The Amapá Project is an integrated iron ore project in the Amapá State of Brazil, with Mineral Resources of 276 million tonnes (Mt) at 38.33% Iron (Fe) and Ore Reserves of 196 Mt at 39.34% Fe.

The Amapá PFS delivered a post-tax net present value of US$949 million at a 10% discount rate and a post-tax internal rate of return of 34%, with an average annual life of mine EBITDA of US$235 million. With the planned production of 5.3 Mtpa of Fe concentrate, the Project is forecast to deliver free on-board C1 Cash Costs of US$35.53 per dry metric tonne.

The Project is about to undergo an amended economic assessment at a PFS level based on the positive results from the optimisation studies released earlier this month. This study will include lower capital expenditure, higher production rate and a possible reduction in mining costs.

Moreover, the Project is fully committed to advancing the development of the 67% Fe product flow sheet, as previously outlined in the announcement on 7 March 2024. It is anticipated to be at a production rate of 5.5 Mtpa.

Cadence Interest in the Amapá Project

At the end of September 2023, Cadence’s total investment in the Amapá Project stood at approximately US$12.1 million, with the equity stake in the project standing at 32.6%. As of March 28^th 2024, Cadence’s total investment in the Amapá Project had increased by approximately US$1.1 million to a total investment of approximately US$13.2 million, and consequently the equity stake in the project now stands at 33.6%.

Cadence CEO Kiran Morzaria commented: “As our involvement and commitment to the Amapá Project increases, we’re ever more excited and enthused by the potential and promise that the newly recommissioned mine and infrastructure is set to deliver. With robust Mineral Resources and Ore Reserves, coupled with solid financial projections, we stand poised to unlock substantial value, and our increased equity stake reflects our confidence in the Project’s potential.”

“The forthcoming economic assessment builds upon our recent optimisation efforts, underscoring our commitment to maximising the project’s delivery potential wherever possible. Moreover, our commitment to advancing the 67% Fe product flow sheet underscores our proactive approach to meet evolving market demands in green steel.”

For further information contact:
Cadence Minerals plc	+44 (0) 20 3582 6636
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 20 7220 1666
James Joyce
Darshan Patel

Fortified Securities – Joint Broker	+44 (0) 20 3411 7773
Guy Wheatley

Brand Communications	+44 (0) 7976 431608
Public & Investor Relations
Alan Green

Cadence Minerals #KDNC – Optimisation Study Delivers Material Capital Savings at the Amapá Iron Ore Project

22nd March 2024 / Leave a comment

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to report the successful completion of its capital expenditure optimisation program at the Amapá Iron Ore Project (the “Project”, “Amapa” or “Amapá Project”). The program has identified significant savings in processing plant recommissioning and increased production. The optimisation study was conducted at a pre-feasibility level and marks an important milestone in the company’s progress towards achieving cost-efficient and sustainable operations.

Highlights:

PFS-level optimisation studies (the “Study”) have identified 33% (US$63.2 million) of capital savings associated with the beneficiation plant at the Amapá Project.
The Study has resulted in a forecast increase in production of approximately 4.8% to 5.5 Mtpa of iron ore concentrate, of which 4.51 will be a 65% product and 0.99 Mtpa a 62% product.
Alongside our joint venture partners, we plan to redesign the mine plan to reduce mining costs.
The revised capex and mine plan will form the basis of an amended economic assessment at a PFS level.
Fully committed to advancing the development of a 67% “Green Iron” Fe product flow sheet at a production rate of 5.5 Mtpa.
The capital requirement for the entire Project is now in the bottom quartile of comparables at US$58 per million tonnes of annual capacity.
The Study was completed ahead of schedule, so we do not anticipate any delays to the timeline already announced.

Cadence CEO Kiran Morzaria commented: “We’re thrilled to announce the successful completion of our capital expenditure optimisation program at the Amapá Iron Ore Project. This effort has delivered a substantial 33% reduction in capital costs, saving $63.2 million and forecasted a 4.8% to 5.5 Mtpa increase in iron ore concentrate production.

Moreover, given the Study was completed ahead of schedule, we do not anticipate any delays to the timeline already announced, even with the additional work associated with optimising the mine plan to accommodate the increased production.

We remain fully committed to advancing the development of the 67% Fe product flow sheet, aligning with our vision for sustainable growth and value maximisation.”

Background to Optimisations Studies

As per the announcement made on 7 March 2024, our joint venture company Pedra and Branca Alliance (“PBA”), which owns 100% of the Amapá Iron Ore project, engaged an engineering firm in 2023 to carry out an in-depth review of the processing plant flowsheet to significantly reduce capital and operating expenditures and, possibly, improving the iron ore concentrate quality.

We are pleased to report that the review of capital and operating expenditures is complete, and the 67% flow sheet development continues.

Results from Amapá Project Optimisation Studies

This part of the optimisation study focused on the iron ore beneficiation plant at the Amapá Project. It aimed to reduce the capital and operational expenditure while producing a product mix of 65% Blast Furnace Pellet Feed (“BFPF”) and 58% spiral concentrate.

An independent Chinese consulting engineering company carried out this work and identified several material capital savings, particularly in the equipment and materials suppliers. As a result of their work, the direct and indirect capital associated with the beneficiation plant has been reduced by US$63.2 million (approximately 33%) from US$191.7 million to US$128.5 million. Utilising the comparables within the PFS report published in 2023, the entire capital required for the Amapá Project is in the bottom quartile of capital intensity at US$58 per million tonnes of capacity; the median of the comparable projects is US$142 per million tonnes of capacity.

In addition, the utilisation and availability rates of the beneficiation plant were increased, resulting in an increase in plant throughput and production from 5.28 million tonnes per annum (“Mtpa”) to 5.5 Mtpa, both on a dry basis. This also led to a marginal reduction in operating costs. Out of the 5.5 Mtpa, approximately 4.51 Mtpa will be 65% BFPF, and 0.99 Mtpa will be a 58% spiral concentrate.

Next Steps

Based on the positive results derived from the optimisation study, which included an increase in throughput, we have decided, in conjunction with our joint venture partners, to redesign the mine plan to reduce mining costs. As already highlighted, the Study was completed ahead of schedule. Therefore, we do not anticipate any delays in the already announced timeline.

This revision and the revised capex will form the basis of an amended economic assessment of the Project at a PFS level. Additionally, we are fully committed to advancing the development of the 67% Fe product flow sheet, as previously outlined in the announcement on 7 March 2024. We also anticipate it being at a production rate of 5.5 Mtpa.

About the Amapá Project and Cadence’s Ownership

The Amapá Project is a brownfield integrated iron ore project in the Amapá State of Brazil. It has Mineral Resources of 276 million tonnes (Mt) at 38.33% Iron (Fe) and Ore Reserves of 196 Mt at 39.34%. The Project consists of the mine, processing plant, wholly owned port and a 194km railway, all operated by PBA. A PFS was published in January 2023. The PFS delivered a post-tax net present value of US$949 million at a discount rate of 10% and a post-tax internal rate of return of 34%, with an average annual life of mine EBITDA of US$235 million annually. In the PFS, after ramp-up, the planned yearly average production was forecast to be 5.3 Mtpa of Fe concentrate, consisting of 4.4 Mtpa at 65.4% Fe and 0.9 Mtpa at 62% Fe concentrate. Over the life of the mine, The Project is forecast to deliver free on-board C1 Cash Costs of US$35.53 / dry metric tonne.

At the end of September 2023, Cadence’s total investment in the Amapá Project stood at approximately US$12.1 million, with the equity stake in the Project standing at 32.6%. Since then, Cadence has continued to invest in the Amapá Project, and a further updated equity position will be provided at the end of March 2024.

For further information contact:
Cadence Minerals plc	+44 (0) 20 3582 6636
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 20 7220 1666
James Joyce
Darshan Patel

Fortified Securities – Joint Broker	+44 (0) 20 3411 7773
Guy Wheatley

Brand Communications	+44 (0) 7976 431608
Public & Investor Relations
Alan Green

I would like to receive Brand Communications updates and news...

Tag Archives: Amapá Project

Cadence Minerals #KDNC – Letter of Intent to Acquire up to a 40% stake in the Pompeya and Sarzedas Tungsten, Antimony and Gold Exploration Tenements, Completion of £1 million Fundraise and Investment Updates

Cadence Minerals #KDNC – PFS Level Economic Study for the Amapa Iron Ore Project Increases Net Present Value to US$1.97 Billion

Cadence Minerals #KDNC – Interim Results for the six months ended 30 June 2024

Cadence Minerals #KDNC – Placing to raise £500,000 and Issue of Warrants to Advance the Amapa Iron Ore Project

Cadence Minerals #KDNC – Update on the Cadence Amapá Project investment and Equity Stake

Cadence Minerals #KDNC – Optimisation Study Delivers Material Capital Savings at the Amapá Iron Ore Project

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