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Cadence Minerals #KDNC Provides PFS Update for the Amapa Iron Ore Project & Appoints Wardell Armstrong as PFS Manager
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to provide an update on the ongoing Pre-Feasibility Study (“PFS”) at its flagship Amapa Iron Ore Project (“Amapa” or “Amapa Project”).
Amapa is a substantial integrated mine, beneficiation plant, railway and port in the northeast of Brazil. It was previously owned by Anglo American (70%) and Cliffs (30%) and at its peak produced up to 6.1 million tonnes (“Mt”) of iron ore concentrate per year.
Highlights
- Cadence have now acquired 27% of the Amapa Project, which is being fast-tracked through development and eventually to production.
- PFS commissioning based on producing 5.3 Mt per annum, 4.9Mt is anticipated to be a 65% iron ore concentrate.
- Wardell Armstrong International Ltd, a leading, globally recognised mining consultancy, has been appointed the PFS Manager of the Amapa Project.
- Work is on track to deliver a high-quality PFS for the Amapa Project
Cadence CEO, Kiran Morzaria, commented: “The Amapa Mine has all the attributes of a significant iron ore deposit, and the recently upgraded Mineral Resource Estimate of 176.7m tonnes grading 39.7% Fe at the Inferred category provides the Cadence board with great confidence in our investment decision.”
“As we see the world move towards decarbonisation and as manufacturers seek to minimise their carbon footprint, the planned production of a >65% Fe concentrate utlising predominantly renewable energy really does highlight the potential for the Amapa mine, rail and port infrastructure to deliver a lower emission iron ore product to our customers.”
“Completion of the PFS will be an important step towards unlocking the value of this deposit and I look forward to providing progress updates in the coming weeks.”
Amapa Pre Feasibility Study and Wardell Armstrong Appointment
The Pre Feasibility Study (“PFS”) began on the Amapa Project late last year and is based on producing 5.3 Mt of iron ore concentrate per annum. We expect to produce 4.9Mt of the higher quality, lower carbon footprint 65% iron ore concentrate which, as of the date of this announcement, trades at approximately US$170 per dry tonne.
The PFS contemplates refurbishing and rehabilitating the existing port, rail and plant with modifications being made to the beneficiation plant to achieve a larger portion of 65% iron concentrate (4.9 Mt). In addition, an investigation is underway into optimisation opportunities and potential cost savings in the transportation of the iron ore concentrate, particularly in the areas of transhipment and movement of ore from the mine to the rail loadout.
Previous studies carried out by SRK consulting based on 2015 site visits and updated in 2019 to reflect changes in inflation and foreign exchange rates estimated the total level of capital expenditure for the project of approximately US$168.8 million (scoping study level accuracy). The same study estimated operating expenditure of about US$ 24 per dry tonne delivered free onboard from Amapa’s port in Santana, Brazil.
All the other areas within the PFS are progressing as expected, with work underway on all critical areas, including mining, beneficiation, infrastructure, energy, tailings storage facilities, logistics and sales and marketing.
Cadence is also pleased to announce that it has appointed Wardell Armstrong International Ltd (“WAI”) as PFS manager for the Amapa Project. WAI is a leading, globally recognised mining consultancy with a track record of conducting all levels of technical study required on projects that have successfully been financed and developed into full mining operations.
WAI are working closely with all our consultants to deliver the lowest cost and capital expenditure possible, which represent huge advantages for any mining operation, particularly for construction and project financing.
About the Amapa Project
Amapa commenced operations in December 2007 with the first production of iron ore concentrate product of 712 kt in 2008. In 2008 Anglo American (70%) and Cliffs (30%) acquired the Amapa Project in 2008 as part of a larger package of mining assets in Brazil.
Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012. During this period, Anglo American reported operating profits from its 70% ownership in the Amapa Project of US$ 120 million (100% US$ 171 million) and US$ 54 million (100% US$ 77 million). Before its sale in 2012, Anglo American valued its 70% stake in the Amapa Project at US$ 866 million (100% US$ 1.2 billion). It impaired the asset in its 2012 Annual Accounts to US$ 462 million (100% US$ 660 million).
Cadence updated the Mineral Resource Estimate on November 2nd 2020, increasing the MRE by 21%. The current MRE contains a Mineral Resource of 176.7 million tonnes grading 39.7% Fe in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.
Details of Ownership and Joint Venture Agreement
Cadence owns 27% of the Amapa Project, with our joint venture partner, Indo Sino Pty Ltd (“Indo Sino”), owning the remaining 73%. The ownership of Amapa is via a joint venture company, Pedra Branca Alliance Pte. Ltd. (“JV Co”), which owns 100% of the equity of DEV Mineração S.A. (“DEV”). Should Indo Sino seek further investors or an investment in the JV Co, Cadence has a first right of refusal to increase its stake to 49%. If Cadence does not exercise its right of first refusal under the terms, Indo Sino will have a twelve-month option to buy the shares in JV Co held by Cadence for 1.5 times the price paid by Cadence for such shares.
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For further information:
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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 Cadence Minerals Plc’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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.
Cadence Minerals #KDNC formally completes Phase Two to vest its 27% in the Amapa Iron Ore Project
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to report that further to the announcement of February 7th 2022 (link here), all of the required contractual documentation has been completed, and Cadence now has vested its 27% of the Amapa Iron Ore Project (“Amapa Project” or “Amapa”).
This second stage of investment was to acquire a further 7% (US$3.5 million) of Pedra Branca Alliance (“PBA”), the Cadence and IndoSino joint venture company which owns 100% of the equity of DEV Mineraço S.A. (“DEV”). DEV is the owner of the large-scale Amapa Project. This second stage investment was conditional on several preconditions, which have now been satisfied, and consequently Cadence has now vested a further 7%.
Anglo American, a previous owner and 70% shareholder, (with Cliffs owning the remaining 30%), valued the entire Amapa Project at US$ 1.2 billion. In its 2012 Annual Accounts, Anglo American impaired the entire Amapa project value to US$ 660 million.
Cadence CEO, Kiran Morzaria, commented: “I am pleased to report that following the recent oversubscribed fundraising, we have formally completed phase two of our investment into Amapa to acquire 27%. I know our new and longstanding shareholders share our vision for Amapa, and I am pleased to report that the mine rehabilitation plan is progressing on schedule.”
“I look forward to reporting back to you on further operational progress in the coming weeks.”
About the Amapa Project
The Amapa Project commenced operations in December 2007 with the first production of iron ore concentrate product of 712 kt in 2008. In 2008 Anglo American (70%) and Cliffs (30%) acquired the Amapa Project in 2008 as part of a larger package of mining assets in Brazil.
Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012. During this period, Anglo American reported operating profits from its 70% ownership in the Amapa Project of US$ 120 million (100% US$ 171 million) and US$ 54 million (100% US$ 77 million). Before its sale in 2012, Anglo American valued its 70% stake in the Amapa Project at US$ 866 million (100% US$ 1.2 billion). It impaired the asset in its 2012 Annual Accounts to US$ 462 million (100% US$ 660 million.
Cadence updated the Mineral Resource Estimate on November 2nd 2020, increasing the MRE by 21%. The current MRE contains a Mineral Resource of 176.7 million tonnes grading 39.7% Fe in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.
Details of Ownership and Joint Venture Agreement
Cadence owns 27% of the Amapa Project with our joint venture partner, Indo Sino Pty Ltd (“Indo Sino”) owning the remaining 73%. The ownership of Amapa is via a joint venture company, Pedra Branca Alliance Pte. Ltd. (“JV Co”) which owns 100% of the equity of DEV Mineraço S.A. (“DEV”). Should Indo Sino seek further 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.
To acquire its 27% interest Cadence has invested US$6 million over two stages. If Cadence is not able to exercise its right of first refusal under the terms of the Agreement, Indo Sino will have a twelve-month option to buy the shares in JV Co held by Cadence for 1.5 times the price paid by Cadence for such shares.
The Agreement also contains security and default clauses which if triggered causes an upwards adjustment mechanism to allow Cadence to either receive cash from JV Co or receive additional shares in JV Co. In the latter case, Cadence’s shareholding in the JV Co will not go above 49.9%.
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For further information:
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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 Cadence Minerals Plc’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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.
Cadence Minerals #KDNC formally completes Phase One to vest its 20% in the Amapa Iron Ore Project
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to announce that further to the announcement of December 29th 2021 (link here), all of the required contractual and regulatory documentation has been completed and filed and Cadence now owns 20% of the Amapa Iron Ore Project.
On the 24th December 2021, the Company alongside Indo Sino entered into a Settlement Agreement with DEV Mineração S.A. (“DEV”) and the Secured Bank Creditors, which to become effective required some additional contractual and regulatory documentation to be completed and filed. As this work has now been completed, Pedra Brance Alliance (“PBA”), the Cadence and IndoSino joint venture company now owns 100% of the equity of DEV, which owns the large-scale Amapa iron ore mine, beneficiation plant, railway and private port (“Amapa Project”, “Amapa”), and consequently Cadence is a 20% owner of PBA.
Anglo American, a previous owner, valued 100 percent in the Amapa Project at US$ 1.2 billion. It impaired the asset in its 2012 Annual Accounts to US$ 660 million for 100 percent.
The second stage of investment is for a further 7% of PBA for a consideration of US$3.5 million. This second stage investment was conditional on several material preconditions, which have now been satisfied. Cadence will now vest its next 7% which will be funded from its recent equity raise. If Cadence does not complete the investment, Indo Sino will have a twelve-month option to buy the shares in PBA held by Cadence for 1.5 (1 ½) times the price paid by Cadence for the shares.
Cadence CEO, Kiran Morzaria, commented: “I am pleased to report that we have formally completed phase one of our investment into Amapa to acquire our initial 20 percent. Furthermore, our board are delighted that the recent fundraise to fund the second investment phase was oversubscribed. It is clear that our vision for Amapa is shared by new and existing shareholders alike given the high level of interest and participation in the fundraising.”
“I look forward to reporting back to you on progress in the coming weeks.”
About the Amapa Project
The Amapa Project commenced operations in December 2007 with the first production of iron ore concentrate product of 712 kt in 2008. In 2008 Anglo American (70%) and Cliffs (30%) acquired the Amapa Project in 2008 as part of a larger package of mining assets in Brazil.
Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012. During this period, Anglo American reported operating profits from its 70% ownership in the Amapa Project of US$ 120 million (100% US$ 171 million) and US$ 54 million (100% US$ 77 million). Before its sale in 2012, Anglo American valued its 70% stake in the Amapa Project at US$ 866 million (100% US$ 1.2 billion). It impaired the asset in its 2012 Annual Accounts to US$ 462 million (100% US$ 660 million.
Cadence updated the Mineral Resource Estimate on 2 November 2020, increasing the MRE by 21%. The current MRE contains an Mineral Resource of 176.7 million tonnes grading 39.7% Fe in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.
Details of the Joint Venture Agreement
The agreement with our joint venture partner, Indo Sino Pty Ltd, is to invest in and acquire up to 27% of the joint venture company Pedra Branca Alliance Pte. Ltd. (“JV Co”). On completion and registration of the Settlement Agreement the equity of DEV Mineração S.A. (“DEV”) will be transferred to the JV Co, at which point it will own 99.9% of the Amapa Project. Should Indo Sino seek further 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.
To acquire its 27% interest Cadence will invest US$ 6 million over two stages in JV Co. 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$3.5 million. If Cadence is unable to complete the second stage of the investment or not exercise its right of first refusal under the terms of the Agreement, Indo Sino will have a twelve-month option to buy the shares in JV Co held by Cadence for 1.5 (1 ½) times the price paid by Cadence for such shares.
Cadence’s investment was conditional on several material preconditions, which as of the date of this announcement have been satisfied. On completion of Cadence’s investment (not including the first right of refusal), our joint venture partner Indo Sino will own 73% of JV Co. The Agreement also contains security and default clauses which if triggered causes an upwards adjustment mechanism to allow Cadence to either receive cash from JV Co or receive additional shares in JV Co. In the latter case, Cadence’s shareholding in the JV Co will not go above 49.9%.
On completion of the US$ 6 million investment, Cadence will have the right to appoint two members to a five-member board, with the remaining three comprising of one member jointly appointed by Cadence and Indo Sino and two appointed by Indo Sino.
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For further information:
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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 Cadence Minerals Plc’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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.
Cadence Minerals #KDNC – Result of Placing & Subscription and TVR
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF CADENCE MINERALS PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
Cadence Minerals Plc
(“Cadence Minerals”, “Cadence” or the “Company”)
Result of Placing & Subscription and Total Voting Rights
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to announce that it has successfully raised gross proceeds of £4.1 million in an oversubscribed fundraising as announced yesterday (the “Placing”).
A total of 19,512,180 Placing Shares in the Company have been placed by WH Ireland Limited (“WH Ireland”) with new and existing investors at a price of 20.5 pence per share (the “Issue Price”).
In addition, the Company has secured a further £0.1 million via a direct subscription (the “Subscription”) of 487,805 shares at the Issue Price (the “Subscription Shares”).
The fundraise was significantly oversubscribed in both the Placing and Subscription and the Directors of the Company are delighted by the support from existing shareholders and new investors, including institutional investors.
Application will be made to the London Stock Exchange for the Placing Shares and Subscription Shares to be admitted to trading on AIM and to the AQSE Growth Market and it is anticipated that dealings in the Placing and Subscription Shares will commence on AIM at 8.00 a.m. on 10 February 2022 (“Admission”). The Placing and Subscription Shares will represent approximately 11.9 per cent. of the Company’s issued share capital following completion of the Placing (“Enlarged Share Capital”). The Issue Price represents a discount of approximately 17.1 per cent. to the closing mid-market price of Cadence’s existing ordinary shares of 24.75 pence on 1 February 2022 (being the last business day prior to the announcement of the Placing yesterday).
Following Admission, the Company’s issued and fully paid share capital will consist of 168,049,083 Ordinary Shares, all of which carry one voting right per share. The Company does not hold any Ordinary Shares in treasury. The figure of 168,049,083 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.
Capitalised terms used but not defined in this announcement have the meanings given to them in the Company’s announcement released earlier today in respect of the Placing unless the context provides otherwise.
Enquiries:
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Cadence Minerals plc |
+44 (0) 207 440 0647 |
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Andrew Suckling |
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Kiran Morzaria |
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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
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James Joyce / Darshan Patel |
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Harry Ansell / Daniel Bristowe |
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Novum Securities Limited (Joint Broker) |
+44 (0) 207 399 9400 |
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Jon Belliss |
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This announcement includes inside information as defined in Article 7 of the UK version of Market Abuse Regulation No. 596/2014 as it forms part of UK law as retained EU law as defined in, and by virtue of, the European Union (Withdrawal) Act 2018, as amended, and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.
Cadence Minerals #KDNC – Proposed Placing
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO . 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED (“UK MAR”) . UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN .
THIS ANNOUNCEMENT, INCLUDING THE APPENDIX TO THIS ANNOUNCEMENT, AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FORRELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT, INCLUDING THE APPENDIX TO THIS ANNOUNCEMENT, IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT AND THE APPENDIX DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF CADENCE MINERALS PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY . IN PARTICULAR, YOU SHOULD READ AND UNDERSTAND THE INFORMATION PROVIDED IN THE APPENDIX WHICH CONTAINS THE TERMS AND CONDITIONS OF THE PLACING .
02 February 2022
Cadence Minerals Plc Proposed Placing
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to announce that it has launched a placing (“Placing”), to raise approximately £3.5million through the Placing of new ordinary shares (“Placing Shares”) in the capital of the Company to new and existing investors at an issue price of 20.5 pence per share (“Placing Price”).
The Placing Price represents a discount of approximately 17.1 per cent. to the closing price of 24.75 pence per ordinary share on 1 February 2022, being the latest practicable business day prior to the publication of this Announcement.
The Placing is subject to the terms and conditions set out in the Appendix to this Announcement.
Cadence intends to use the net proceeds of the Placing to invest further in the Amapa Iron Ore Project (“Amapa Project” or “Amapa”) increasing its stake to 27 per cent., as announced on 29 December 2021. The funds invested in the Amapa Project will primarily be used to progress the pre-feasibility studies, the remaining net proceeds of the Placing will be used for Cadence to continue to pursue its investment strategy and for general working capital purposes.
Funding Details
The Company has entered into a placing agreement (“Placing Agreement”) with WH Ireland Limited (“WH Ireland”) pursuant to which terms WH Ireland agreed to arrange the Placing. The Company has given certain customary warranties and indemnities under the Placing Agreement in favour of WH Ireland. Completion of the Placing is subject to the satisfaction of the conditions contained in the Placing Agreement including, but not limited to, Admission.
Your attention is drawn to the detailed terms and conditions of the Placing set out in the Appendix to this Announcement (which forms part of this Announcement).
The Appendix to this Announcement contains the detailed terms and conditions of the Placing and the basis on which investors agree to participate in the Placing. The Placing has not been underwritten by WH Ireland. Placees are deemed to have read and understood this Announcement in its entirety, including the Appendix, and to have made their offer on the terms and subject to the conditions contained herein and to have given the representations, warranties, undertakings and acknowledgements contained in the Appendix to this Announcement.
The Placing Shares will be issued, credited as fully paid, and will rank pari passu with the existing Ordinary Shares in issue in the capital of the Company, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of such shares after the date of their issue.
The Company is mindful of its existing shareholders and wants to give shareholders the opportunity to invest on the same terms as those who have participated in the Placing. Consequently, the Company will shortly be sending a circular to shareholders setting out the terms of an open offer, which will allow existing qualifying shareholders the ability to subscribe for further shares at the Placing Price pro-rata to their existing holdings (the “Open Offer”) up to a maximum number of shares to be detailed in the circular.
Admission and Settlement
Application will be made for the admission to trading on the AIM market (“AIM”) of London Stock Exchange plc (“LSE”) and to the AQSE Growth Market (“AQSE”) operated by Aquis Stock Exchange Limited for the Placing Shares (“Admission”). Admission is expected to occur at 8.00 a.m. on or around 10 February 2022. There are no shares held in treasury.
About the Amapa Project
The Amapa Project commenced operations in December 2007 with the first production of iron ore concentrate product of 712 kt in 2008. In 2008, Anglo American (70%) and Cliffs (30%) acquired the Amapa Project in 2008 as part of a larger package of mining assets in Brazil.
Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012. During this period, Anglo American reported operating profits from its 70% ownership in the Amapa Project of US$ 120 million (100% US$ 171 million) and US$ 54 million (100% US$ 77 million). Before its sale in 2012, Anglo American valued its 70% stake in the Amapa Project at US$ 866 million (100% US$ 1.2 billion). It impaired the asset in its 2012 Annual Accounts to US$ 462 million (100% US$ 660 million).
DEV filed for judicial protection in August 2015 in Brazil, and mining ceased at the Amapa Project. A judicial order in early 2019 offered investors and creditors the opportunity to file a revised JRP. Cadence and Indo Sino filed a conditional JRP, which creditors approved in August 2019. Cadence, Indo Sino and DEV have continued to develop the Amapa Project and satisfy the conditions of the JRP.
Cadence updated the Mineral Resource Estimate on 2 November 2020, increasing the MRE by 21%. The current MRE contains a Mineral Resource of 176.7 million tonnes grading 39.7% Fe in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.
Cadence Amapa Project Stake
As mentioned on 29 December 2021, the Company entered into a binding settlement agreement (“Settlement Agreement”) with the secured bank creditors of DEV Mineraço S.A. (“DEV”), the owner of the Amapa Project in Brazil. The execution of the Settlement Agreement represents the last major precondition for Cadence to vest its initial US$ 2.5m for 20% of the large-scale Amapa iron ore mine, beneficiation plant, railway and private port. Anglo American, a previous owner had valued its 70% stake in the Amapa Project at US$ 866 million (100% US$ 1.2 billion). It impaired the asset in its 2012 Annual Accounts to US$ 462 million (100% US$ 660 million).
The parties to the agreement are now completing and filing the required contractual and regulatory documentation which will crystallise the Cadence and Indo Sino Trade Pte. Ltd. (“Indo Sino”) joint venture company’s 100% ownership of DEV and the Amapa Project.
The agreement with our joint venture partner, Indo Sino Pty Ltd, is to invest in and acquire up to 27% of a joint venture company Pedra Branca Alliance Pte. Ltd. (“JV Co”). On Completion and registration of the Settlement Agreement the equity of DEV will be transferred to the JV Co, at which point it will own 99.9% of the Amapa Project.
To acquire its 27% interest, Cadence will invest US$ 6 million over two stages in JV Co. 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.
For further information on the Company, please visit www.cadenceminerals.com or contact:
For further information:
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Cadence Minerals plc |
+44 (0) 207 440 0647 |
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Andrew Suckling |
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Kiran Morzaria |
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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
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James Joyce / Darshan Patel |
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Harry Ansell / Daniel Bristowe |
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Novum Securities Limited (Joint Broker) |
+44 (0) 207 399 9400 |
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Jon Belliss |
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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.
Link here for the full placing announcement and documents
Cadence Minerals #KDNC – Project Updates, Corporate Update and Company Presentation and Q&A
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to provide a series of project updates, and details of a new presentation and Q&A session.
Amapa Project
On 29 December 2021, Cadence announced the execution of the binding settlement agreement with the secured bank creditors, which allows us to vest our 20% interest in the large-scale Amapa iron ore mine, beneficiation plant, railway and private port (“Amapa Project”, “Amapa”).
We are pleased to announce that the completion and filing of the required contractual and regulatory documentation is proceeding as planned and we currently expect to finalise this in the first two weeks of next month.
Cadence has already begun work on the next investment phase to earn an additional 7% of Amapa for US$3.5 million. These funds will be primarily used to progress the pre-feasibility studies on the asset.
The pre-feasibility study (“PFS”) is progressing as expected, with the consulting engineers for the mine operations, ore reserve estimation, metallurgy, processing and shipping identified and in the process of being appointed. The rail logistic study has been completed in draft form, and is being reviewed.
In addition, to supplement the technical team at the Amapa, Tony Cau has been appointed as the pre-feasibility project director. Tony is a Civil Engineer with 40 years of global experience in the metals processing and engineering industry. Tony has worked for internationally recognised consulting and operational firms, including SNC-Lavalin, Bateman Engineering, BHP Billiton and Ausenco.
Litchfield and Picasso Projects
On 29 September 2021, Cadence announced that Castillo Copper (ASX/LON: CCZ) (“Castillo”) had entered into a 90-day option agreement with Lithium Technologies Pty Ltd (“LT”) and Lithium Supplies Pty Ltd (“LS”) in which Cadence owns a 31% shareholding, to acquire the Litchfield and Picasso Lithium Projects in the Northern Territory (NT) and Western Australia (WA) respectively.
LT and LS have informed us that the board of CCZ and LT & LS have mutually agreed to unwind the Option Agreement. As part of the break agreement terms, the A$50,000 deposit has been returned to CCZ.
Cadence CEO, Kiran Morzaria, commented: “On behalf of the board, I am pleased to advise shareholders that the filing of the contractual and regulatory documentation pertaining to the Amapa bank settlement agreement is proceeding as planned. Work has already started on the next investment phase to take Cadence up to 27% ownership of Amapa.
“I would also like to take this opportunity to welcome Tony Cau to the Amapa Project. Tony’s experience will be invaluable to us as Amapa undergoes recommissioning, and he joins the asset at an exciting phase of its development.”
“In regard to the Litchfield and Picasso option with Castillo, given the recent increases in lithium compound pricing to over US$40,000 per tonne of battery grade lithium carbonate, and the pending analysis of the assay results, we see the unwinding of this option agreement as an opportunity for Cadence to extract a higher valuation for these prospective assets”
Presentation and Q&A Session
Further to the announcement on the 5 January 2020, the online presentation and Q&A session is available here.
In addition, an updated PowerPoint presentation is available on the Company’ website, https://www.cadenceminerals.com/
Share Incentive Vesting
On the 2 November 2020, the Company announced that, under the share incentive plan established in September 2014, it had conditionally granted up to 240,000 Ordinary Shares to each of the directors. These share awards were conditional on meeting performance conditions during the award period (“2021 SIP Awards”). 2021 SIP Awards would be transferred from the Employee Benefit Trust (“EBT”), with no New Ordinary Shares being issued to satisfy the 2021 SIP Awards.
The award period ran from November 2020 to December 2021 (“Award Period”). The 2021 SIP Awards were subject to the board achieving performance conditions which were in line with market practice. One of the conditions was met by the end of 2021 entitling each director to be awarded 80,000 shares from EBT. With this award two of the three performance conditions were met during the period and no further awards will be made in relation 2021 SIP Awards. Once the shares have been transferred from the EBT to the board the Company will make a Director / PDMR disclosure.
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For further information:
|
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 Cadence Minerals Plc’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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.
UK Investor Magazine – Cadence Minerals: A Small Company making a Big Difference in Amapa, Brazil
By Alan Green
On December 29, Cadence Minerals (AIM: KDNC), a mining investment company listed in London, announced that it had completed all the preconditions to invest into and acquire an initial 20% of the integrated Amapa iron mine, railway and port in North Eastern Brazil.
When we talked to Cadence CEO, Kiran Morzaria, via zoom on Christmas Eve just after the settlement agreement had been signed, he was understandably in good spirits. His home office is dominated by two framed pictures, one of the head gear at a mine and the second of the three miners drilling a narrow-vein ore body. Kiran relates that these pictures are from a mine that he helped restart and rehabilitate in 2008, and which remains in production, further extending its 100-year history. Morzaria relates the story:
“These images remind me of two key things; the first is that the right asset, proper jurisdiction, and right people make all the difference. The second is that however hard I am working here, there others working in far tougher conditions, so the least I can do is put in that extra mile and ensure we can move the asset forward for all our stakeholders.”
There is no doubt that the team involved in the Amapa transaction have put in the hard yards. The process started back in September 2018, when Cadence partnered with commodity trading firm Indo Sino to form a joint venture. Cadence and Indo Sino then engaged with thelocal authorities and commercial courts to acquire Amapa mine owner in administration, DEV Mineração S.A.
A plan was put forward by Cadence to bring the former Anglo American owned Amapa mine,railway and wholly owned port at Santana (complete with 1.39 Mt of iron ore in three stockpiles) out of administration and ultimately back into production. Naturally the process came with some unique challenges. Morzaria explains:
“The judicial restructuring plan was a tough process. Not only did it set some key legal precedents, it also faced challenges from competing investors. This delayed the creditors meeting by one week, and yet despite this, we got over 90% of the creditors, by value to approve our restructuring plan.”
The history of the Amapa iron ore mine goes back to its discovery and ownership by a Brazilian conglomerate, which it then packaged with the massive 6 billion tonne Minas-Rio iron ore deposit and sold on to Anglo American for US$5.5 billion. For Anglo, Amapa was a relatively small transaction, and was certainly not part of the company’s long term strategic focus and plan. As a result, Amapa was sold to Brazilian company Zamin Ferrous in 2013, but during the finalisation of this sale, the company’s wholly owned port suffered a landslide which curtailed exports. Zamin Ferrous then negotiated a lower price, but the absence of a port prevented any meaningful product export and consequently DEV went into administration.
Before its sale in 2013, Anglo American valued its 70% stake in Amapá at US$866 million (100% US$1.2 billion). Anglo impaired the asset in its 2012 Annual Accounts to US$462 million (100% US$660 million).
Given its history, to most smaller listed companies, the challenge of bringing Amapa back to life would in most cases have represented a bridge too far. However, Cadence saw an opportunity, as outlined by Morzaria:
“Once we understood the legal process in Brazil, we saw an opportunity for significant upside for our shareholders. The not inconsiderable technical and existential risks typically associated with developing a mineral resource asset were largely mitigated. The mineral resource was auditable, the mining and processing technology are established, the product mix is well known, and there is a well-trodden path to obtain the required operating licenses, with several key licenses being granted before our investment.”
“Moreover, and critically, although the asset is not a large one in terms of global production, it is very significant for the state of Amapa. Our estimates suggest that once we reach our production targets, it will represent some 3.5% of the state GDP and could contribute some 4,200 jobs to the local and national economy. These facts helped to focus support at local and governmental levels and ensured our efforts didn’t become ensnared in in red tape. A government working committee has also been set up to work with us to troubleshoot any critical issues along our path to production.”
The investment proposition to bring Amapa out of administration sees Cadence acquire a 27% interest by investing US$6 million over two stages in the JV company. The first stage is for20% of the JV, the consideration for which is US$2.5 million. The second stage of investment is for a further 7% of the JV for a consideration of US$3.5million. The funds for the first stage of investment are currently held in a judicial trust account of the commercial court of Sao Paulo.The agreement also gives Cadence a first right of refusal to increase its stake to 49%.
As the various pre-conditions set out by the commercial court of Sao Paulo were met, in 2020, DEV received permission to start shipping the iron ore stockpiled at Santana port, which immediately started generating cash. By the end of August 2021, DEV had shipped three cargoes of approximately 143,000 wet tonnes of iron ore. The net proceeds from shipment went to pay labour and small creditors, while also providing funds to invest into the recommissioning of the assets, the upgrading of the Mineral Resource Estimate and commencement of the pre-feasibility Study.
Move forward to December 2021, and with the preconditions set out by the courts met and satisfied, the final hurdle was to agree a settlement with the banks – no easy task giventhat the team were negotiating with different state owned and private banks, in two jurisdictions, with varying degrees of organizational complexity and internal compliance hurdles. Nonetheless,with Credit Committee approval announced in October 2021, the final settlement with the banks was agreed and signed in December, triggering the initial US $2.5 million investment and a 20% stake for Cadence in the Amapa project.
The final settlement is a remarkable achievement by any standards: in combination with the other unsecured creditors the settlement terms meant that DEV was now only paying 45 cents in the dollar.
After the completion of the feasibility study and project financing, the rehabilitation of the mine,railway and port is expected to take between one and half to two years, following which the mine plans to produce over 5 million tonnes of 65% iron ore. From an investor and shareholder perspective, the financials really highlight and put into perspective what Cadence has achieved here. Assuming that the targets are hit and a current 65% iron ore price (US$ 145 / tonne in Dec 2021) is achieved, gross revenues could be circa US$725 million per annum. With solid demand for iron ore showing little sign of slowing as we go into 2022, quite rightly Cadence shares should see a re rating as investors run the slide rule over the Amapa numbers.
While there is no doubt Amapa is a landmark achievement, the rest of the Cadence portfolio also continues to deliver impressive returns. Cornerstone stakes in projects such as the Cinovec Lithium and Tin Project via AIM listed European Metals Holdings (AIM: EMH) in the Czech republic generated a £3.54 million return in the first 6 months of the year, with pre- tax profits of £2.84 million.
In particular, Cinovec, owned by European Metals Holdings and Eastern European utility giant CEZ is set to become a major European and Global lithium supply hub to meet the boom in batteries and electric vehicles, with demand anticipated to grow exponentially in the coming years.
Cadence also has a range of other ‘passive’ investments, including several ASX listed lithium assets, plus joint ventures at the Yangibana Rare Earths project in Australia, the Sonora Lithium project in Mexico and a hard rock lithium exploration assets 2 km away from Core Lithium’s (ASX:CXO) mining projects in the Northern territories of Australia.
Despite this exceptionally impressive asset portfolio, along with other micro-cap investors and explorers, the sector malaise has seen Cadence shares drift during the second half of 2021, currently rating the company on a modest £32m market cap.
Nonetheless CEO Morzaria remains enthused by the opportunities he expects to materialise in 2022.
“Our shareholders have stuck with us over what has been a hugely frustrating period”
“The completion of the first phase at Amapa marks a huge achievement for everyone involved, and we are really excited about the possibilities in Brazil in 2022”
A recent visit to Amapá left a deep impression on Morzaria, who reported back to the markets in a live interview from the port at Santana.
“I was delighted to see the rapid progress on the ground, driven by a highly motivated local management team and staff. The rate of reconstruction and recommissioning work already completed gives our board huge confidence in what can be achieved next year.”
There is no doubt that bringing Amapá back to life has in cycling parlance represented a Tour de Brazil equivalent for Cadence. Regardless, Morzaria and his team have now completed the mountain section, and with several stage victories, look set for a great team result as they transition from micro-cap explorer and investor to mid-tier iron ore producer. Solid Cadence!
Cadence Minerals #KDNC – Execution of Settlement Agreement and Vesting of Initial US$2.5m for 20% of the Amapa Iron Ore Project
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to announce that it has entered into a binding settlement agreement (“Settlement Agreement”) with the secured bank creditors of DEV Mineração S.A. (“DEV”), the owner of the Amapa iron ore project in Brazil.
The execution of the Settlement Agreement represents the last major precondition for Cadence to vest its initial US$2.5m for 20% of the large-scale Amapa iron ore mine, beneficiation plant, railway and private port (“Amapa Project”, “Amapa”) . Anglo American, a previous owner had valued its 70% stake in the Amapa Project in [date]at US$ 866 million (100% US$ 1.2 billion). It impaired the asset in its 2012 Annual Accounts to US$ 462 million (100% US$ 660 million).
Highlights:
- Execution of the Settlement Agreement with the Secured Bank Creditors of the Amapa Project allows Cadence’s (20%) and Indo Sino’s (80%) joint venture to secure 100% ownership of the Amapa Project.
- The restructuring of the secured and unsecured creditors achieved by this Settlement Agreement and the Judicial Restructuring Process (“JRP”) has more than halved registered creditors balances.
- Cadence has already commenced its next stage of investment in the Amapa Project to increase its stake to 27%.
- Pre-feasibilty studies are ongoing on the project
Next Steps
The parties to the agreement are now completing and filing the required contractual and regulatory documentation which will crystallise the Cadence and Indo Sino Trade Pte. Ltd. (“Indo Sino”) joint venture company’s 100% ownership of DEV and the Amapa Project.
Cadence has already begun work on the next investment phase to earn an additional 7% of Amapa for US$3.5 million. These funds will be primarily used to progress the pre-feasibility studies on the asset.
Details of the Settlement Agreement
Cadence alongside Indo Sino entered into a Settlement Agreement with DEV and the Secured Bank Creditors on 24 December 2021.
The original credit facility provided to DEV has a principle amount outstanding of US$135 million (“Credit Facility”). The Settlement Agreement settles all of the principle amount plus all interest, default interest, outstanding costs and fees (“Settlement Amount”). The Credit Facility is secured over all of DEV’s equity and assets.
As a result of the Settlement Agreement and the JRP approved in August 2019, the total principle amounts owed to the secured and unsecured creditors in classes I to IV of DEV have been reduced from approximately US$231 million to approximately US$103 million or approximately 45% of the original value.
The Settlement Amount will be paid over two years from the effective date of the Settlement Agreement, and It is to be be satisfied by the net profits from the sale of DEV’s iron ore stockpiles. As agreed in the JRP in August 2019 the unsecured creditors will be paid from DEV’s free cash flow over a period of nine years.
Under the Settlement Agreement, DEV remains the obligor with the Secured Creditors having no recourse of repayment of the Settlement Amount to either Cadence or Indo Sino. The Settlement Agreement will remain secured over all of DEV’s equity and assets.
Cadence CEO, Kiran Morzaria, commented: “When Cadence first announced Heads of Terms for Amapa back in May 2019, we knew that while a tremendous amount of work lay ahead, the investment and terms, if secured would represent our greatest achievement to date as a mining investment company.”
“That we are at this point today is entirely due to the team at Cadence, Indo Sino and DEV sharing a common vision and working together to achieve it. I am proud that together we have overcome some considerable challenges, including the impact of COVID on the Amapa region, to reach this moment.”
“We have already embarked on Phase 2, where Cadence will vest an additional US$3.5m to take our holding to 27%. Given the rate of progessthat I saw on visiting Amapa in October, I have every confidence that the day when our newly recommissioned mine re-commences production will come, at which point the nascent value in the project will be realised for the benefit of all our investors and shareholders.”
Cadence Non-Executive Chairman, Andrew Suckling, commented; “This is indeed a momentous day for Cadence, Indo Sino, DEV, the Government of Amapa, the legal teams and bank committees and administrators who have worked tirelessly, COVID notwithstanding, to finalise the final and perhaps the most lengthy part of the judicial restructuring plan agreed back in 2019.”
“I would also like to put on record my heartfelt thanks to everyone involved in making this happen, and in particular to Kiran and the team for realising what is an absolutely transformational transaction for Cadence and its shareholders.”
“Having achieved what we set out to do, the work really starts in earnest. Bringing Amapa back to life has created a raft of new opportunities for the region and its community, with improved prospects for employment, health and education. The opportunity is simply huge: Amapa was once owned Anglo American, and we fully intend to restore the mine and infrastructure to its former glory, and more besides given that we intend to produce a higher quality product mix. Even now, the value of this transaction is only starting to register with the markets, something I truly believe will change dramatically in the coming years.”
About the Amapa Project
The Amapa Project commenced operations in December 2007 with the first production of iron ore concentrate product of 712 kt in 2008. In 2008 Anglo American (70%) and Cliffs (30%) acquired the Amapa Project in 2008 as part of a larger package of mining assets in Brazil.
Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012. During this period, Anglo American reported operating profits from its 70% ownership in the Amapa Project of US$ 120 million (100% US$ 171 million) and US$ 54 million (100% US$ 77 million). Before its sale in 2012, Anglo American valued its 70% stake in the Amapa Project at US$ 866 million (100% US$ 1.2 billion). It impaired the asset in its 2012 Annual Accounts to US$ 462 million (100% US$ 660 million.
DEV filed for judicial protection in August 2015 in Brazil, and mining ceased at the Amapa Project. A judicial order in early 2019 offered investors and creditors the opportunity to file a revised JRP. Cadence and Indo Sino filed a conditional JRP, which creditors approved in August 2019. Cadence, Indo Sino and DEV have continued to develop the Amapa Project and satisfy the conditions of the JRP.
Cadence updated the Mineral Resource Estimate on 2 November 2020, increasing the MRE by 21%. The current MRE contains an Mineral Resource of 176.7 million tonnes grading 39.7% Fe in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.
Details of the Joint Venture Agreement
The agreement with our joint venture partner, Indo Sino Pty Ltd, is to invest in and acquire up to a 27% of a joint venture company Pedra Branca Alliance Pte. Ltd. (“JV Co”). On Completion and registration of the Settlement Agreement the equity of DEV Mineração S.A. (“DEV”) will be transferred to the JV Co, at which point it will own 99.9% of the Amapa Project. Should Indo Sino seek further 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.
To acquire its 27% interest Cadence will invest US$ 6 million over two stages in JV Co. 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$3.5 million. If Cadence is unable to complete the second stage of the investment or not exercise its right of first refusal under the terms of the Agreement, Indo Sino will have a twelve-month option to buy the shares in JV Co held by Cadence for 1.5 (1 ½) times the price paid by Cadence for such shares.
Cadence’s investment was conditional on several material preconditions, which as of the date of this announcement have been satisfied. On completion of Cadence’s investment (not including the first right of refusal), our joint venture partner Indo Sino will own 73% of JV Co. The Agreement also contains security and default clauses which if triggered causes an upwards adjustment mechanism to allow Cadence to either receive cash from JV Co or receive additional shares in JV Co. In the latter case, Cadence’s shareholding in the JV Co will not go above 49.9%.
On completion of the US$ 6 million investment, Cadence will have the right to appoint two members to a five-member board, with the remaining three comprising of one member jointly appointed by Cadence and Indo Sino and two appointed by Indo Sino.
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For further information:
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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 Cadence Minerals Plc’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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.
Podcast- Cadence Minerals #KDNC CEO Kiran Morzaria talks to UK Investor Magazine
Cadence Minerals #KDNC CEO Kiran Morzaria talks to UK Investor Magazine and covers:
– Group investment strategy
– Flagship Amapa Iron Ore project
– Cinovec #Lithium project
– Sonora Lithium project
– Yangibana #RareEarths project
Unlocking value in Lithium, Rare Earth and Iron Ore assets with Cadence Minerals
Cadence Minerals #KDNC -Port Concession Update, Amapa Project
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to announce the approval of the change of control request for the federal port concession owned by DEV Mineraço S.A.’s (“DEV”) (“Port Change of Control”).Alongside the reinstatement of the life of mine railway concession by the State of Amapa in December 2019, details of which can be found here. Both these approvals represent two essential regulatory requirements over the critical infrastructure to operate the integrated Amapa Iron Ore Mine (“Amapa Project”)
DEV, Cadence and Indo Sino Pte. Ltd. (“Indo Sino”) have been liaising with the Agencia Nacional De Transportes Aquaviarios (“ANTAQ”) to approve the Port Change of Control. The federal port concession is one of the licenses required to operate DEV’s privatley owned port in Santana, Amapa. The approved Port Change of Control will occur once Cadence’s and Indo Sino’s joint venture company Pedra Branca Alliance Pte. Ltd. (“JV Co”) is the 99.9% owner of DEV. As part of the Port Change of Control, ANTAQ has agreed to cease the recommended abrogation of the port concession. In addition, DEV has agreed to pay the outstanding fines of approximately US$267,000 to ANTAQ, 30 days after our JV Co takes control of DEV.
DEV ownership will pass to the JV Co once DEV, Cadence and Indo Sino have executed the settlement agreement with the secured bank creditors. Further details of the settlement agreement can be found here .
This approval represents a significant step forward in the licensing process to bring the Amapa project back into production. DEV continues to progress the licensing workstream across the multiple regulatory authorities, and we will update our shareholders as this progresses.
Cadence CEO, Kiran Morzaria, commented: “The Port Concession marks another significant step along the road to bring the Amapa Project back to life. Licensing and permitting often represent a substantial risk in the development of mineral projects, but thanks to the efforts of the team at DEV and its advisors, we have successfully secured two key concessions critical to the operational success of the Amapa project.”
“On my recent Amapa site visit, I was delighted to see the rapid progress on the ground, driven by a highly motivated local management team and staff. I look forward to reporting further progress.”
About the Amapa Project
The Amapa Project commenced operations in December 2007, with the first iron ore concentrate product of 712 kt shipped in 2008. In 2008 Anglo American (70%) and Cliffs (30%) acquired the Amapa Project as part of a larger package of mining assets in Brazil.
Cadence updated the Mineral Resource Estimate on 2 November 2020, increasing the MRE by 21%. The current MRE contains a Mineral Resource of 176.7 million tonnes grading 39.7% Fe in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.
Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012. During this period, Anglo American reported operating profits from their 70% ownership in the Amapa Project of USD 120 million (100% USD 171 million) and USD 54 million (100% USD 77 million).
Before its sale in 2012, Anglo American valued its 70% stake in Amapa Project at USD 866 million (100% 1.2 billion). It impaired the asset in its 2012 Annual Accounts to USD 462 million (100% USD 660 million.
DEV filed for judicial protection in August 2015 in Brazil, and mining ceased at the Amapa Project. A judicial order in early 2019 offered investors and creditors the opportunity to file a revised JRP. Cadence and Indo Sino filed a conditional JRP, which creditors approved in August 2019, and since that time, Cadence, Indo Sino and DEV have continued to develop the Amapa Project and satisfy the conditions of the JRP.
Details of the Joint Venture Agreement
The agreement with our joint venture partner, Indo Sino, is to invest in and acquire up to 27% of a (JV Co. On completion and registration of the settlement agreement with the bank creditors, the equity of DEV will be transferred to the JV Co, at which point it will own 99.9% of the Amapa Project. Should Indo Sino seek further 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%.
To acquire its 27% interest, Cadence will invest US$ 6 million over two stages in JV Co. The first stage is for 20% of the JV Co’s consideration, which is US$2.5 million. The second stage of investment is for a further 7% of JV Co for a consideration of US$3.5 million. If Cadence is unable to complete the second stage of the investment or not exercise its right of first refusal under the terms of the Agreement, Indo Sino will have a twelve-month option to buy the shares in JV Co held by Cadence for 1.5 (1 ½) times the price paid by Cadence for such shares.
Cadence’s investment is conditional on several material preconditions, including the grant of key operating licences and the release of bank securities over the asset. Upon completing Cadence’s investment (not including the first right of refusal), our joint venture partner Indo Sino will own 73% of JV Co. The Agreement also contains security and default clauses which, if triggered, causes an upwards adjustment mechanism to allow Cadence to either receive cash from JV Co or receive additional shares in JV Co. In the latter case, Cadence’s shareholding in the JV Co will not go above 49.9%.
Upon completing the US$ 6 million investment, Cadence will have the right to appoint two members to a five-member board. The remaining three members will comprise one member jointly appointed by Cadence and Indo Sino and two appointed by Indo Sino.
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For further information:
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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 Cadence Minerals Plc’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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.