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Cadence Minerals #KDNC – Interim Results for the Six Months Ended 30 June 2023

29th September 2023 / Leave a comment

Cadence Minerals plc (AIM/AQX: KDNC) is pleased to announce its interim results for the six months ended 30 June 2023.

HIGHLIGHTS

Amapá Pre-Feasibility Study (“PFS”) completed. The study established that the Amapá mine has potential to deliver a robust 5.28 Mtpa (dry) iron ore operation & excellent cash flow including a post-tax NPV of US$949 million.
Amapá Mineral Resource Estimate (MRE) increased and upgraded. Total Measured, Indicated and Inferred MRE increased to 276.24 million tonnes grading 38.33% Fe and a maiden Measured Resource of 55.33 Mt grading 39.26% Fe.
Scoping study identified changes and cost savings in Santana Port layout & refurbishment of US$28m.
Progress with equity investments including ASX listed Evergreen Lithium (ASX: EG1), Hastings Technology Metals (ASX: HAS) and AIM listed European Metals Holdings (AIM: EMH).
Reduced LBT of £1.95m (6 months ended 30 June 2022: £5.05m, Y/E 31 Dec 2022: £5.50m)
Total group assets increased from £21.64m at 31 December 2022 to £25.79m at 30 June 2023.

CEO Kiran Morzaria commented: “Faced with unprecedented geopolitical challenges and challenging global markets, your Board are pleased to deliver reduced losses and an increase in group assets at the half year. Our flagship Amapá project is developing at pace, and we have seen the MRE increase combine with costs savings at the Santana port to deliver material growth in our investment. Our considered opinion, and that of several analysts during the first half of 2023 is that these developments, along with our investments in Evergreen, Hastings Tech Metals, European Metals and Sonora have yet to be reflected in our market valuation. We hope that our progress will be in some way reflected during the second half of the year.”

“I look forward to reporting back on further progress.”

INVESTMENT REVIEW

Our public portfolio was bolstered during the period as our private investments Evergreen Lithium and in the Yangibana Rare Earth deposit were converted into equity in public listed entities. However, the performance of our equity in stake in Hastings Technology Metals (converted from our stake in the Yangibana Rare Earth Deposit) weighed down the overall performance of our public portfolio and is detailed in the review of our public listed portfolio.

As stated in our annual report and accounts the overall ambition of the portfolio is capital growth of the assets under management which should be reflected in Cadence’s share price. We intend to fund this growth, where possible, by investing in undervalued assets, selling these investments at higher valuations, and reinvesting the proceeds. Once we reach critical mass in terms of assets under management, this investment cycle will mitigate the need for outside capital, either in new equity or debt.

As stated in our annual report, the overall ambition of the portfolio is capital growth of the assets under management, which should then be reflected in Cadence’s share price. We intend to fund this growth, where possible, by investing in undervalued assets, selling these investments at higher valuations, and reinvesting the proceeds. Once we reach critical mass in terms of assets under management, this investment cycle will mitigate the need for outside capital, either in new equity or debt.

PRIVATE INVESTMENTS, ACTIVE

The Amapá Iron Ore Project, Brazil

Interest – 30% at 30/06/2022 and 29/09/2023

The Amapá Project is a large-scale iron ore mine with associated rail, port and beneficiation facilities that commenced operations in December 2007. 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.

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 a Brazilian company DEV Mineração S.A. The agreement also gave Cadence the 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; this was completed in the first quarter of 2022. In October 2022, we increased this stake to 30%. At the end of the reporting period, the total investment was US$11.02 million, which, once fully converted to equity, will represent some 31.6% of the Amapá Project.

Operations Review

During the reporting period our we made considerable progress at the Amapá Project. The PFS was completed early in the year, this was followed by the port optimisation study. Post period end it was agreed that the following completion of the Amapá PFS, the remaining operational focus for the year should include progressing the permitting pathway and the completion of the regulatory requirements for the mining concessions, tailing storage facilities and the environmental permits.

Pre-Feasibility Study & Optimisation Studies

As part of the PFS, we upgraded and increased the Amapá Project Mineral Resource Estimate. This resulted in a substantial increase in total Measured, Indicated and Inferred Mineral Resources to 276.24 million tonnes grading 38.33% Fe and a maiden Measured Resource of 55.33 Mt grading 39.26% Fe.

The PFS results were announced in early January 2023. The PFS confirmed the potential for the Amapá Iron Ore Project to produce a high-grade iron ore concentrate and generate strong returns over the life of mine. It delivered a robust 5.28 Mtpa (dry) operation, which can provide excellent cash flows and a post-tax NPV of US$949 million.

The Key Highlights of the PFS are below:

Annual average production of 5.28 million dry metric tonnes per annum (“Mtpa”) of Fe concentrate, consisting of 4.36 Mtpa at 65.4% Fe and 0.92 Mtpa at 62% Fe concentrate.
Post-tax Net Present Value (“NPV”) of US$949 million (“M”) at a discount rate of 10%.
Post-tax Internal Rate of Return of 34%, with an average annual life of mine EBITDA of US$235 M annually
Maiden Ore Reserve of 195.8 million tonnes (“Mt”) at 39.34% Fe demonstrates an 85% Mineral Resource conversion.
Free on Board (“FOB”) C1 Cash Costs of US$35.53/dmt at the port of Santana. Cost and Freight (“CFR”) C1 Cash Costs US$64.23/dmt in China.
Pre-production capital cost estimate of US$399 million, including the improvement and rehabilitation of the processing facility and the restoration of the railway and the wholly owned port export facility

Based on the positive outcome of the PFS and subsequent consultations with the key contractors, three areas of possible improvement to the Amapá Project were identified. The first was to review the historical drilling and geological data north of the Amapá mining concessions. The data was acquired, and work began; however, the owner of these mining concessions filed for judicial recovery, so the timing of this is likely to be delayed. We are investigating other ways to progress this work, including conducting a topography survey of the areas.

The second area of potential improvement is a change in the layout of the port at Santana by moving the railway loop further from the shore. A scoping study regarding this option was completed during the period and identified a potential net capital saving to the port refurbishment costs of US$28 million.

The last area of potential improvement is to investigate and review the flowsheet to improve the final product quality over and above the current 65% iron ore concentrate or reduce the operating costs. From initial reviews, it appears that the most viable option will be to reduce the operational costs. We are looking to appoint an engineer to complete this work in the coming months.

Once these studies are completed, work on a Definitive Feasibility Study (“DFS”) can begin. The DFS is required to seek project debt and equity finance, which will be sought once the DFS is complete.

Permitting Pathway & Tailings Storage Facility

While the Amapá Project was operating, it held all the necessary permissions to mine, process, transport and ship some six million tonnes of iron ore annually. However, many of these licenses lapsed after it ceased operations in 2014. Cadence has been working alongside the team at the Amapá Project to obtain these licenses and permissions. To date, we have reinstated and extended the railway concession to 2046 (completed in December 2019) and been granted a change of control over the wholly owned port in November 2021, which ensured the federal licenses could be maintained.

The Amapá Project owns the required Mining Concessions; however, it must obtain a Mine Extraction and Processing Permit (“Mining Permit”) to begin operation. To get this permit, the Amapá Project must obtain an L.I. and, when constructed, an Operational License L.O. from the Amapá State Environmental Agency.

Before the suspension of mining, the project had numerous L.O.s across the mining, rail, and port operations. These L.O.s expired between 2013 and 2018. In 2022, the Amapá Project began regularising the expired environmental permits and started consultation with the Amapá State Environmental Agency and the relevant state authorities. The Amapá Project requested that the requirement for a full environmental impact study be waived. This request for a waiver was on the basis that the previous L.O.s were granted on an operation that is substantially the same as is currently planned and remains applicable to future operations.

As a result of the discussions between the various state authorities and the Amapá Project, we agreed with the Amapá State Environmental Agency that on the mine and railway, we will be able to submit an Environmental Control Plan – “PCA” (Plano de Controle Ambiental) and an Environmental Control Report – “RCA” (Relatório de Controle Ambiental). However, we will need to complete a full environmental assessment on the port. Still, given that the Amapá Project has already begun some background studies, we also anticipate that the timeline for the grant of the port L.I. will be shortened.

The fieldwork for the L.I. will begin as soon as possible with current expectations that we will be able to submit the required reports for the mine and rail in the second quarter of 2024 and the reports for the port in the third quarter of 2024. The Amapá State Environmental Agency will then review the application for the L.I., and we anticipate that these licenses will be granted in 2024.

This timeline is substantially shorter than expected on a greenfield site, where the impact study and associated approval can typically take between 24 and 36 months. The Amapá Project could achieve this in 12 to 16 months.

One of Cadence’s initial investment criteria into the Amapá Project was the safety and stability of the TSF. As such, before entering into the investment agreement with our joint venture partners, we carried out a TSF review by an internationally recognised consultant group and were satisfied with the structure and stability of the T.S. Nonetheless, given the lack of reporting and maintenance from 2014 onwards, the TSF at the Amapá Project was considered high risk. The work carried out since 2019, including maintenance, reporting, drilling and compliance, has meant that the Amapá Project TSF is approaching the lowest risk rating for operating TSF. The intent is that the TSF will continue to improve its risk rating. This will be achieved by completing a dam break study, installing video monitoring on the TSF, and ongoing inspection and remediation of various TSF-associated infrastructure.

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.

As previously disclosed, given these unprecedented macroeconomic conditions in 2022, DEV could not meet the 2022 payment schedule per the settlement deed. Although the bank creditors have reserved their rights, the settlement deed remains in full effect. All parties are in discussions to agree on a new timetable to rephase payments or to reach a one-time payment to settle all outstanding amounts.

With the current iron ore prices and shipping costs, selling the 58% iron ore concentrate stockpile is economically viable. Although DEV can recommend material shipment, the secured bank creditors must approve it as they will receive the net proceeds of the stockpile sale. As a result of the ongoing discussions, no material shipments are scheduled to be made.

Development Plan for the Amapá Project

The goal is to bring this project back into production. With the PFS completed, a project would typically directly proceed to DFS, funding, and construction. Cadence and Its joint venture partners have agreed that the lowest risk and currently best commercial approach to developing this project is to bring on a highly experienced mining operator or EPCM contractor as a joint venture partner. We are making good progress in this regard. While we develop this further, we will continue with the optimisation studies, licensing pathway, and community engagement, which should further improve the project’s economics while reducing its risks.

PRIVATE INVESTMENTS, PASSIVE

Ferro Verde Iron Ore, Brazil

Interest – 1% at 30/06/2022 and at 29/09/2023

During the previous year, Cadence invested a small (£0.21 million) in an advanced iron ore deposit in Brazil. The Ferro Verde Deposit is located 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 capital of the state of Bahia.

The project is currently progressing with its 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% at 30/06/2022 and at 29/09/2023

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

Mexilit and Megalit form part of the Sonora Lithium Project (the “Project”). The Sonora Lithium Project consists of nine granted concessions. Two of the concessions (La Ventana, La Ventana 1) are owned 100% by subsidiaries of Ganfeng Lithium Group Co., Ltd (“Ganfeng”). El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions are owned by Mexilit S.A. de C.V. (“Mexilit”), which is owned 70% by Ganfeng and 30% by Cadence. The Buenavista and San Gabriel concessions are owned by Megalit, which is owned 70% by Ganfeng and 30% by Cadence.

Ganfeng Lithium has been developing the project, consisting of an open pit mine and a lithium chemical product processing facility. The principal planned lithium product for the project is lithium hydroxide.

As previously announced, In April 2022 and May 2023, the Mexican Government approved amendments to its Mining Law (the “Mining Law Reform”), which prohibited lithium concessions, declared lithium as a strategic sector and granted the exclusive right to engage in lithium mining operations to a state-owned entity. The Mining Law Reform is not supposed to apply to pre-existing concessions, including those held by the Mexilit and Megalit. Ganfeng’s and Cadence’s position is that these reforms cannot impact the project’s concessions because they were granted before the enactment of the Mining Law Reform. This is consistent with the terms of the Constitution of Mexico, which, among other principles and rights, recognises the principles of legality and non-retroactivity of laws.

Guided by the principles of good faith, cooperation, and mutual benefit, Ganfeng has been proactively engaging with the Mexican Government in general and with the Secretary of Economy in particular, regarding a potential collaboration on the Sonora Project while respecting Ganfeng and its subsidiaries rights (including those subsidiaries 30% owned by Cadence). Ganfeng continues to seek a mutually beneficial resolution. No agreement has been reached among the Company, Ganfeng and the Mexican Government concerning this potential collaboration.

While Ganfeng was holding discussions with the Secretary of Economy, the General Directorate of Mines (“DGM”) initiated a review of nine of the lithium concessions held by the Mexican Subsidiaries, including the lithium concessions including the concessions owned by Mexilit and Megalit.

According to the DGM, if the Mexican Subsidiaries failed to submit sufficient evidence within the specified timeframe to prove that they had complied with minimum investment obligations for the development of lithium concessions in 2017-2021, there was a risk of cancellation of the above-mentioned lithium concessions.

As of May 2023, Mexlait and Megalit had submitted extensive evidence of their compliance with the minimum investment obligations of the above-mentioned lithium concessions in a timely manner. However, the DGM issued a formal decision notice to the Mexican Subsidiaries in August 2023, indicating that nine lithium concessions were cancelled, which include those owned by Mexilit and Megalit.

The lithium concessions’ cancellations issued by the DGM are not final and are subject to ongoing appeals. Ganfeng and Cadence believe that the Mexican Subsidiaries have complied with their minimum investment obligations, as required by Mexican law. Indeed, the mine development investment by the Mexican Subsidiaries has significantly exceeded the minimum investment obligations, and the Mexican Subsidiaries regularly submitted to the DGM annual reports for the 2017-2021 periods detailing their operations within the prescribed period annually.

Moreover, Ganfeng and Cadence’s position is that the resolutions cancelling the concessions violate both Mexican law and international law as they are arbitrary, unsubstantiated in both fact and law and infringe upon Cadence’s, Ganfeng’s and its Subsidiaries’ fundamental due process rights. Therefore, Ganfeng and the Mexican Subsidiaries have filed administrative review recourses before the Secretary of Economy against the aforementioned resolutions.

The lithium concessions’ cancellations issued by the DGM are not final. Depending on the progress of Ganfeng’s further actions and the outcome of the above-mentioned matters, whether cancellations will be revoked or maintained in place and the scope of the concessions affected are still uncertain.

Ganfeng’s interim results announcement published on 29 August 2023 discussed these developments as part of their post-balance sheet analysis. Therefore, there is still uncertainty about the impact on Cadence’s investment. Ganfeng is pursuing various remedies, including administrative review recourses, to challenge the DGM’s resolutions. If necessary, Ganfeng will resort to additional remedies under Mexican or international law.

Cadence will continue to liaise with our joint venture partners regularly and ensure within the limits of the joint venture agreement that the matter is given the utmost attention and that regulatory requirements are fulfilled promptly.

PUBLIC EQUITY

The public equity investment segment includes active and passive investments in our trading portfolio.

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.

During the period, our public equity investments generated an unrealised and realised loss of £1.53million (2022: loss of £4.15 million). These unrealised losses are a reflection of the transfer of the receipt of Hastings Technology Metals Ltd’s (“HAS”) equity at the market value (£ 5.15 million) and then the subsequent reduction in share price in HAS by circa 66%. However, the treatment of the mineral license swap of the Yangibana Rare Earth Deposit into the equity of HAS is due to Cadence reporting on an unconsolidated basis. Assuming the returns were reported on a consolidated basis, we would have reported an unrelaised / realised profit of £2.17 million, with roughly £0.93 million gain being attributed to improvements in the price and profits from sales of European Metals Holdings share price (“EMH”), £0.93 million is attributed to the net improvement in the Evergreen Lithium Share Price (“E.G.”) and £0.75 million being attributed to the gain in price associated with the Yagibana Rare Earth License swap into HAS.

If we look at the cumulative share performance of this portfolio at the end of the period, the realised return on historical costs is circa 143%, and the unrealised return is 149%. Our investment in EMH is the only active investment in the public equity portfolio.

The movement in public portfolio values during the year is summarised below. We have reported for clarity the unconsolidated and consolidated values and movements. Our disposals in our pubic equity were invested in the Amapá Project.

	£,000 (Unconsolidated)	£,000 (Consolidated)
Portfolio value at the beginning of period of 2023	5,244	5,244
Addition of HAS shares at market value	5,152	NA
Transfer of HAS from private to public portfolio	NA	905
Transfer of E.G. from private to public portfolio	1,810	1,810
Disposal of public Investments during the year	(935)	(935)
Realised and Unrealised (loss) / profit on portfolio value for the period	(1,532)	2,715
Portfolio value at the end of the period	9,740	9,740

As of 30 June 2023, our public equity stakes consisted of the following:

Company	30-Jun-23 £,000	31-Dec-22 £,000	30-Jun-22 £,000	31-Dec-21 £,000	30-Jun-21 £,000
European Metals Holding Ltd	5,207	4,882	5,357	11,287	14,180
Evergreen Lithium Ltd	2,738	–	–	–	–
Hastings Technology Metals Ltd	1,570	–	–	–	–
Charger Metals NL	187	301	196	342	109
Macarthur Minerals Ltd	–	–	103	181	327
Eagle Mountain Mining Ltd	20	37	47	122	153
Mont-Royal Resources Ltd	12	19	39	35	–
Celsius Resources Ltd	–	–	–	–	103
Miscellaneous	5	5	5	7	6
Total	9,740	5,244	5,747	11,974	14,878

PUBLIC EQUITY, ACTIVE

European Metals Holdings Limited (“EMH”), Czech Republic

Interest – 6.2% at 30/06/2022 and 5.8% at 29/09/2023

EMH owns 49% of Geomet s.r.o. with 51% owned by CEZ. CEZ is a significant energy group listed on various European Exchanges. Geomet s.r.o. owns 100% of Cinovec, which hosts a globally substantial hard-rock lithium deposit with a total Measured, Indicated and Inferred Mineral Resource of 708.2Mt at 0.43% Li2O and 0.05% Sn containing a combined 7.39 million tonnes of Lithium Carbonate Equivalent.

This followed previous reports on 28 November 2017 (Further Increase in Indicated Resource at Cinovec South). An initial Probable Ore Reserve of 34.5Mt at 0.65% Li2O and 0.09% Sn reported on 4 July 2017 (Cinovec Maiden Ore Reserve – Further Information) has been declared to cover the first 20 years’ mining at an output of 22,500tpa of battery-grade lithium carbonate reported on 11 July 2018 (Cinovec Production Modelled to Increase to 22,500tpa of Lithium Carbonate). This makes Cinovec the largest hard-rock lithium deposit in Europe, the fourth largest non-brine deposit globally, and a globally significant tin resource.

In January 2022, EMH completed an updated PFS, which indicated a return post-tax NPV8 of USD1.94B and a post-tax IRR of 36.3%. The study confirmed that the Cinovec Project is a potential low-operating-cost producer of battery-grade lithium hydroxide or battery-grade lithium carbonate as markets demand. It confirmed that the deposit is amenable to bulk underground mining. Metallurgical test work has produced battery-grade lithium hydroxide and lithium carbonate in addition to high-grade tin concentrate. A DFS for the Cinovec Project is currently underway.

For the reporting period, EMH continued to manage the advancement of the Cinovec Lithium/Tin Project in the Czech Republic. The Cinovec project was awarded pre-approval for an ~ EUR 49 million grant under the E.U.’s Just Transition Fund scheme in January 2023 and was formally classified as a “Strategic Project” as part of this grant scheme. The final application and approval process is due to be completed in early 2024.

Other key milestones achieved during the year included the appointment of DRA Global to complete the DFS, the continuation of outstanding results from the final test work, and securing the land necessary to build the proposed lithium processing plant at Dukla, approximately 6.2km from the proposed portal site.

Post-period end, EMH received an investment from a significant strategic investor, the European Bank for Reconstruction and Development (“EBRD”). The EBRD is an International Financial Institution owned by the European Union, the European Investment Bank and 71 countries, including the Czech Republic. The EBRD investment aims to fund the project’s predevelopment work.

PUBLIC EQUITY, PASSIVE

Evergreen Lithium Limited (“EG”), Australia

Interest – 13.2% at 30/06/2022 and 8.7% at 29/09/2023

In July 2022, Cadence Minerals received approximately 15.8 million shares in EG when Cadence sold its 31.5% stake in Lithium Technologies and Lithium Supplies (“L.T. and L.S.”) to EG as announced on 27 June 2022. EG was listed on the Australian Stock Exchange (“ASX”) during the reporting period.

Before listing, Cadence’s equity stake in Evergreen was 13.16%; due to the IPO and associated fundraising, this was reduced to 8.74%. At the time of writing, the value of this stake was approximately £3.3 million; our initial investment into this asset was £0.83 million.

A further AS$ 6.63 million (£3.80 million) shares in Evergreen are due to Cadence on achieving certain performance milestones by Evergreen. Further details of these milestones can be found in the Evergreen prospectus. Cadence’s shares are subject to a 2-year escrow agreement as determined by the listing rules of the ASX.

Evergreen is the 100% owner of three exploration tenements. The Bynoe Lithium Project and Fortune Lithium Project (awaiting grant of exploration permit) are in the Northern Territory, and the Kenny Lithium Project is in Western Australia.

The Bynoe Lithium Project is Evergreen’s flagship prospect. Evergreen’s primary focus is to explore and discover an economically viable lithium resource for development. The Bynoe Lithium Project is located south of Darwin in the Northern Territory, Australia. It covers the northeastern strike extent of the lithium- and tantalum-endowed Bynoe Pegmatite Field. The Bynoe Pegmatite Field is host to Core Lithium Ltd’s (ASX: CXO) (“Core Lithium” or “Core”) high-grade Finniss lithium deposit, which is adjacent to Core Lithium’s producing lithium mine. Core Lithium’s deposit is just 1.2km from the Bynoe Lithium Project. Soil sampling conducted on the Bynoe Lithium Project has returned geochemical anomalies that indicate the lithium mineralisation continues along the trend into the Company’s

Bynoe Lithium Project. Based on the initial stages of soil sampling alone (which only covers approximately 10- 20% of the Bynoe Lithium Project area, an initial five target zones have been identified that contain lithium mineralisation. The Bynoe Lithium Project covers an area of 231 km2, making Evergreen one of the largest tenement holders within the central Bynoe Pegmatite Field after Core Lithium.

The Kenny Lithium Project is located within the Dundas Mineral Field of Western Australia and 50km East of Norseman in the Eastern Goldfields. It is near the Mt Dean and Mt Belches-Bald Hill pegmatite fields, and multiple significant lithium discoveries have been made near the Kenny Lithium Project.

Initial field mapping on the Kenny Lithium Project has confirmed the presence of substantial outcropping pegmatites, whereby an approximate 10km zone of pegmatite outcropping has been established in the North- Eastern section of the Kenny Lithium Project, which significantly exceeds what has already been identified by the Government Survey of Western Australia (GSWA).

Evergreen aims to explore and discover an economic lithium resource for subsequent development. As with the Company’s Bynoe Lithium Project, minimal geochemical work has been undertaken within the tenure; however, historical results have proven encouraging. During the reporting period, EG has continued to progress with the development of these assets, with some initial positive results from the geochemical and geophysical results on both the Byone and Kenny lithium prospects.

PUBLIC EQUITY, PASSIVE

Hastings Technology Metals Ltd (“HAS”), Australia

Interest – 1.4% at 30/06/2022 and 1.4% on 29/09/2023

In June 2022, Cadence entered into a binding agreement to sell its working interest in the leases in the Yangibana Project to HAS, the current owner and operator of the Yangibana Rare Project. Cadence sold its 30% working interest in the Yangibana Project tenements, to Hastings, for A$9 million (£5.1 million), which has been satisfied via the issue of 2,452,650 new ordinary shares in Hastings to Cadence. These shares represented approximately 1.9% of the issued share capital of Hastings Technology and are subject to a 12-month voluntary escrow. Cadence has disposed of some of this investment to fund our investment in the Amapá Iron Ore Project, holding circa 1.4% of HAS. Amapa. At the period end, the value of this stake was approximately £1.6 million; our initial investment in this asset was £0.91 million.

Hastings is a well-managed Perth-based rare earth company primed to become the world’s next producer of neodymium and praseodymium concentrate (“NdPr”). NdPr is vital in manufacturing permanent magnets used daily in advanced technology products ranging from electric vehicles to wind turbines, robotics, medical applications and digital devices.

Hasting’s flagship Yangibana project, in the Gascoyne region of Western Australia, contains a highly valued NdPr deposit with an NdPr: TREO ratio of up to 52%. The site is permitted for long-life production and with offtake contracts signed and debt finance in an advanced stage.

During the period Hastings announced it had introduced a staged development programme to the Yangibana asset. This strategy will reduce upfront capital requirements and project execution risks and provide a faster pathway to cash flow by Q1 2025. Hastings will initially focus on constructing the Yangibana mine and beneficiation plant to produce rare earths concentrate (Stage 1), followed by developing a hydrometallurgical plant to produce mixed rare earth carbonate (Stage 2). This has resulted in the total project capital cost being estimated at $948m, with the Stage 1 component being $470m. The beneficiation plant construction will commence in Q3 2023, supporting the Stage 1 concentrate delivery target date of Q1 2025.

As a result of this staged development programme, Stage 1 will have a post-tax NPV11 of $538m, an IRR of 27.54% and an average annual EBITDA of $174m, providing a funding source for Stage 2.

FINANCIAL RESULTS:

During the period, the Group made a loss before taxation of £1.95 million (6 months ended 30 June 2022: £5.05 million, year ended 31 December 2022: £5.50 million). There was a weighted basic loss per share of 1.163p (30 June 2022: 3.136p, 31 December 2022: 3.355p). During the period, the Group disposed of its Yangibana Joint Venture Interest. This interest was held in the Company’s wholly owned subsidiary, Mojito Resources “Mojito” which acquired 2,452,650 shares in Hastings Technology Metals Ltd in return valued at AUD $9m. Therefore, the sale’s profit is reflected in the subsidiary, not the Company’s accounts. Mojito, in turn, sold these shares to the Company for $9m, which resulted in an amount owing to the subsidiary of £4.75m at the period end in the Company’s accounts. This transaction constitutes a related party transaction. The Company currently holds an investment in Mojito of £0.96m, supported by the intercompany balance of £4.75m. Should the intercompany loan be waived this would result in a profit of approximately £3.79m, based on the balances at 30 June 2023, for the Company.

The total assets of the Group increased from £21.64 million at 31 December 2022 to £25.79 million. During the period, our net cash outflow from operating activities was £0.76 million, gross proceeds of £1.31m were raised through the issue of loans and new shares, and our net cash position was up £0.47 million at £0.58 million.

Kiran Morzaria

Director

29 September 2023

This announcement contains inside information for the purposes of Article 7 of E.U. Regulation 596/2014.

For further information:

Cadence Minerals plc	+44 (0) 20 3582 6636
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
Darshan Patel

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

Cadence Minerals #KDNC – Pre-Feasibility Study Delivers Robust Economics for the Amapá Iron Ore Project, Brazil

3rd January 2023 / Leave a comment

Post-Tax Project NPV US$949 million, Internal Rate of Return of 34% and a Project Maiden Ore Reserve Estimate of 195.8 Mt (Cadence attributable of 58.74 Mt) at 39.34% Fe Declared

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce the completion of the Pre-Feasibility Study (“PFS”) on the Amapá Iron Ore Project, Brazil (“Amapá” or the “Project”).

The PFS confirms the potential for the Amapá Iron Ore Project to produce a high-grade iron ore concentrate and generate strong returns over its life of mine. Completing the PFS is a significant milestone in the Project’s development, laying the foundations to advance Amapá to eventual production.

Cadence holds a 30% interest in Pedra Branca and, consequently, a 30% interest in the Amapá Project and has a first right of refusal to increase its interest to 49%.

The PFS was managed by Pedra Branca Alliance Pte. Ltd. (“PBA”), Cadence and Indo Sino Pte. Ltd. (“Indo Sino”) and has been compiled by Wardell Armstrong International (“WAI”). 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 mining operations.

PFS Highlights:

Annual average production after ramp-up of 28 million dry metric tonnes per annum (“Mtpa”) of Fe concentrate, consisting of 4.36 Mtpa at 65.4% Fe and 0.92 Mtpa at 62% Fe concentrate.

Post-tax Net Present Value (“NPV”) of US$949 million (“M”) at a discount rate of 10%, with profit after tax of US$2.96 billion (“B”) over Life of Mine (“LOM”) gross revenues of US$9.39 B over LOM.

Post-tax Internal Rate of Return of 34%, with an average annual LOM EBITDA of US$235 M per annum.

Maiden Ore Reserve of 195.8 million tonnes (“Mt”) at 39.34% Fe, demonstrating an 85% mineral resource conversion.

Free on Board (“FOB”) C1 Cash Costs of US$35.53/dmt at the port of Santana. Cost and Freight (“CFR”) C1 Cash Costs US$64.23/dmt in China.

After applying tax rebates, a pre-production capital cost estimate of US$399 M, including the improvement and rehabilitation of the processing facility and the restoration of the railway and the wholly owned port export facility, cost estimations have a PFS level of accuracy at +/- 25%.

Key assumptions: Long-term average price for 62% iron ore concentrate of US$95/dmt and US$23.8/dmt premium for 65.4% iron ore concentrate, both quoted on a Cost and Freight (“CFR”) basis.
Opportunities: exploration target at the Tucano Mine to further extend initial mine life and potential capital savings at port loading facilities.

Based on the positive outcome of the PFS, the owner of the Project DEV Mineração S/A (“DEV”) intends to advance the Project. The initial works will include optimising the capital expenditure, optimising processing plant availability and efficiency and developing the adjacent exploration targets to increase the mine life, after which work on a Feasibility Study can begin.

Cadence CEO Kiran Morzaria commented: “On behalf of the Cadence Board, we are pleased and proud to release the Pre-Feasibility Study for the Amapá Iron Ore Project in Brazil. This study, which we consider to be a definitive moment for our company, re-enforces Cadence’s analysis that the Amapá Project can be regenerated and restarted on a profitable basis over an initial 16-year mine life.”

“The Study outlines a robust 5.28 Mtpa operation which can deliver excellent cash flows, and a post-tax NPV of US$949 million producing 4.36 Mtpa of 65.4% iron ore concentrate and 0.92 Mtpa of 62% iron ore concentrate.”

“We are also pleased to declare a maiden Ore Reserve of 195.8Mt at 39.34%, representing 85% resource to reserve conversion and confirming the robust project fundamentals.”

“The Project benefits from integrated infrastructure under the owner’s control, a well-established processing route, low capital intensity and a quality product with an international reputation. Along with a skilled workforce, proximity to operational infrastructure and the potential to increase the mineral resource means that Amapá remains an incredibly attractive investment opportunity.”

“The opportunity for DEV is to advance the Amapá Iron Ore Project to a Financial Investment Decision. This could be completed along with securing a strategic investor, offtake partner, separate listing, or a combination of these options. However, we recognise that there is still much work to complete at Amapá, which will ultimately deliver a Feasibility Study.”

“I look forward to reporting further progress across all our projects in the coming months.”

Table 1.1 Key Project Metrics (100% project basis)

Metric	Unit	2022 PFS Data
Total ore feed to the plant	Mt (dry)	176.88
Life of Mine	Years	16
Fe grade of ore feed to the plant	%	39.34
Recovery	%	76.27
62.0% iron ore concentrate production	Mtpa	0.89
65.4% iron ore concentrate production	Mtpa	4.23
C1 Cash Costs FOB *	US$/dmt	35.53
C1 Cash Costs CFR **	US$/dmt	64.23
Pre-Production capital investment***	US$M	399
Sustaining capital investment over LOM****	US$M	245
Post-tax NPV (10%)	US$M	949
Post-tax IRR	%	34
Project payback	Years	4
Total profit after tax (net operating profit)	US$B	2.96

*	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

Summary of Amapá Iron Ore Project PFS Results

The information in the press release contains a summary of the PFS and its results

Introduction

The Project consists of an open-pit iron ore mine, a processing and beneficiation plant, a railway line, and an export port terminal. DEV and its subsidiaries own the Amapá Project. DEV is owned by PBA, a joint venture between Cadence Minerals Plc (“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 the export of iron ore. Before the cessation of operations, the Project generated an underlying profit of US$54 million in 2012 and US$120 million in 2011^[1]. 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.

DEV continued to operate the Project and rehabilitate the port up until 2014. However, due to the restricted iron ore exports, and cash flow constraints, in August 2015, DEV filed for judicial protection in Brazil, and operations at the Project ceased.

In 2019 Cadence and Indo Sino, alongside DEV, submitted a judicial restructuring plan (“JRP”) for approval by the unsecured creditors. As part of the JRP, 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 the Amapá Project, and Pre-Feasibility Study (“PFS”), has been managed by Indo Sino and Cadence in co-operation with Wardell Armstrong International (“WAI”); the latter has reviewed the work completed and compiled the PFS. The PFS and supporting reports, engineering designs and data are the sole property of PBA.

The Mineral Resource and Ore Reserve statements have been prepared in accordance with the Guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources, and Ore Reserves, the JORC Code, 2012 Edition (JORC Code (2012)). Cost estimations were prepared by DEV, with input from third-party independent engineers and subsequently reviewed by WAI using the internationally accepted practice for PFS-level studies.

Location

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

The Amapá mine is some 125 km 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 the figure here.

The port site in the municipality of Santana is located 90 km from the mouth of the Amazon River. The nearest populace centre to the Amapá mine is Pedra Branca Do Amapari, some 10 km west, with the larger conurbation of Serra do Navio 18 km to the northwest.

Amapá Project Components

The Amapá Project PFS encompasses four distinct but completely integrated operational components that form part of the study, as illustrated in the figure here.

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 away from the Amapá mine and plant complex by graded road.

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 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.

Pre-Feasibility Study

The PFS scope covers the existing mine, plant, rail, and port. Capital and operational estimates were developed for refurbishing the facilities to a safe working level. The study investigates all the design and business parameters necessary to operate the Amapá Project, including the railway system and privately owned port for loading vessels with iron ore concentrate. It has also included an upgrade to the existing plant with new equipment and improved efficiency to produce 4.36 Mtpa of Blast Furnace Pellet Feed (“BFPF”) and 0.92 Mtpa of spiral concentrate, a total of 5.28 Mtpa (on a dry basis).

Cost Estimates

The capital costs (“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 vendor quotes for the equipment and materials or consultant engineering databases. The CAPEX estimate is after tax (any duties and taxes deemed to be recoverable are calculated separately), includes contingency, and excludes 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 Pre-Feasibility level engineering study.

As this is a PFS, the cost accuracy is estimated at ± 25% and has a base date of June 2022. Pre-Production capital cost estimates are provided below.

Table 1.2 Pre-Production capital cost estimates

Description	(US$M)
Direct Capex Mining	2.8
Direct Capex Beneficiation Plant and Mining	155.1
Direct Capex Rail	28.5
Direct Capex Port	113.9
Sub-total Direct Capex	300.4
Sub-total Indirect Capex	65.2
Environment and Community Cost	7.1
Deduct Tax Credit	25.6
Contingency	52.1
Pre-Production Capex Cost	399.1

Table 1.3 Deferred, sustaining, and closure capital costs over LOM

Description	(US$M)
Capex Tailings Storage Facility (“TSF”)	9.8
Capex Rail (2^nd Phase)	20.0
Capex Conveyor Belt	61.2
Stay in Business	90.7
Closure Costs	62.8
Sustaining Capex Cost	244.5

Operating expenditures (“OPEX”) for the Project have 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 4.36 Mtpa of BFPF and 0.92 Mtpa of spiral concentrate, a total of 5.28 Mtpa (on a dry 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 were 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.

Table 1.4 FOB and CFR average cash cost per tonne of dry product over the LOM

Cash Cost Per Discipline	US$/dmt
Mine	17.05
TSF	0.08
Beneficiation Plant, Road / Conveyor Transfer & Rail Loading	12.43
Rail Freight	2.43
Port	1.55
G & A (5% total cost)	1.99
FOB Cash Costs	35.53
Marine Logistics	28.70
CFR Cash Costs	64.23

Project Financial Analysis

A PFS financial model was developed to evaluate the economics of the Project. Summary results from the financial model outputs are presented in tables within this section, including financial analysis. 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. A summary of the key financial information is presented below.

Table 1.5 Summary of key financial information for the Project.

Item Over Life of Mine	Unit	2022 PFS Data
Gross revenue	US$M	9,387
Freight (Maine Logistics)	US$M	(2,350)
Net Revenue	US$M	7,037
Operating costs	US$M	(2,910)
Royalties and taxes (excluding income tax)	US$M	(373)
EBITDA	US$M	3,754
EBIT	US$M	3,315
Net Taxes and Interest	US$M	355
Net Operating Profit	US$M	2,960
Initial, Sustaining capital costs & repayments	US$M	727
Free Cash Flow	US$M	2,672

Item	Unit	2022 PFS Data
LOM	Years	16
Discount rate	%	10
NPV	US$M	949
IRR	%	34
Project Payback	Years	4

Project Sensitivity Analysis

A sensitivity analysis was performed on key parameters within the financial model to assess the impact of changes on the post-tax NPV of the Project (debt-free). To examine the sensitivity of the Project base case NPV the economic and operational conditions of each cost factor were independently varied within a range of +/- 30%, 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. The figure here shows the results of the project sensitivity analysis.

Mineral Resource Statement

The MRE was previously reported on 7 October 2022 and is available here. The MRE has been reported at a cut-off grade of 25% Fe constrained by a resource open pit and the topography dated April 2014 (grey surface in the figure here), in line with the Reasonable Prospects For Eventual Economic Extraction (RPEEE) principle. The MRE has been estimated, considering a product revenue of US$120/t. The geotechnical parameters, metallurgical recovery and updated mining costs were all provided by DEV.

Table 1.6 Summary of gross and attributable Mineral Resources for the Amapá Iron Ore Project. Attributable tonnage to Cadence is based on a 30% interest in the Project.

Classification	Tonnage (Mt)	Attributable Tonnage (Mt)	Fe (%)	SiO₂ (%)	Al₂O₃(%)	P (%)	Mn (%)
Measured	55.33	16.60	39.26	30.40	6.54	0.161	1.03
Indicated	174.15	52.25	38.60	28.75	7.86	0.156	0.91
Meas. + Ind	229.48	68.84	38.76	29.15	7.54	0.157	0.94
Inferred	46.76	14.03	36.20	27.62	10.49	0.139	0.86
TOTAL	276.24	82.87	38.33	28.89	8.04	0.154	0.93

Notes:

(1) The Mineral Resource is considered to have reasonable prospects for eventual economic extraction based on an optimised pit shell

(2) Cut-Off Grade reported within an optimised pit and above a cut-off grade of 25% Fe applied

(3) Tonnages are reported as wet tonnes

(4) Mineral Resources are not reserves until they have demonstrated economic viability based on a Feasibility Study or Pre-Feasibility Study

(5) The Mineral Resource Estimate has an effective date of 31 August 2022

(6) Mineral Resources have been classified in accordance with the Australian Code for Reporting of Exploration Results. Mineral Resources and Ore Reserves (JORC Code 2012)

(7) The attributable tonnes represent the part of the Mineral Resource that will be attributable to Cadence Minerals’ 30% interest in the Project

(8) The operator is DEV

As required per the JORC Code 2012, Table 1 for reporting MREs is available here.

Ore Reserve Statement

The mine engineering and design work for this PFS, including operational logistics, equipment requirements, mining strategy, and Ore Reserve Estimation, have been undertaken by a Brazilian mining consultancy, Prominas Mining Ltd (“Prominas”). 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).

Under the guidelines of the JORC Code (2012), an ‘Ore Reserve’ is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include the application of considerations to convert Mineral Resources to Mineral Reserves. These considerations include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social, and governmental factors, called ‘Modifying Factors’. Such studies demonstrate that, at the time of reporting, the economic extraction could reasonably be justified.

Prominas has estimated the Ore Reserve for the Amapá Project at 195.8Mt at an average grade of 39.34% Fe, at a cut-off grade of 25% Fe, as presented in the table below.

Table 1.7 Amapá Project Ore Reserve Estimate (JORC Code (2012)) valid on 5 October 2022, DEV Mineral Rights – Fe >= 25. Attributable tonnage to Cadence is based on a 30% interest in the Project.

Classification	Material	Tonnage (Mt)	Attributable Tonnage (Mt)	Head Grades (%)
Classification	Material	Tonnage (Mt)	Attributable Tonnage (Mt)	Fe	SiO₂		Al₂O₃	P	Mn
Proven	Friable Altered Itabirite	30.3	9.09	38.88	29.72		7.29	0.169	1.19
	Friable Itabirite	13.7	4.11	39.51	36.37		2.88	0.086	0.90
	Friable Hematite	0.7	0.21	62.53	4.40		2.23	0.227	0.39
	Colluvium	5.2	1.56	39.18	20.89		11.90	0.185	0.72
	Canga	0.8	0.24	49.99	5.81		10.53	0.964	0.19
	Sub-total	50.7	15.21	39.58	29.88		6.56	0.162	1.04
Probable	Friable Altered Itabirite	51.6	15.48	38.34	30.63		6.84	0.174	1.25
	Friable Itabirite	30.9	9.27	40.28		34.75	3.02	0.101	0.92
	Friable Hematite	1.5	0.45	57.22		13.11	2.30	0.114	0.43
	Colluvium	56.6	16.98	38.33		22.60	11.71	0.144	0.60
	Canga	4.5	1.35	48.68		9.03	10.12	0.587	0.22
	Sub-total	145.1	43.53	39.26		27.53	7.98	0.159	0.89
TOTAL		195.8	58.74	39.34		28.14	7.61	0.160	0.93

Notes:

The effective date of the Ore Reserve Estimate is 5 October 2022.
Ore Reserves are reported per the guidelines of the JORC Code (2012).
The Ore Reserve Estimate is reported to a cut-off of 25% Fe.
Ore Reserves were estimated at a selling price of US$120/t (FOB) and include modifying factors related to geotechnical parameters, mining cost, dilution and recovery, process recoveries and costs, G&A, royalties and rehabilitation costs.
A mining dilution factor of 3.0% and a mine recovery of 94% has been estimated and applied for the Ore Reserve Estimate.
Figures have been rounded to an appropriate level of precision for the reporting of Ore Reserves.
Due to rounding, some columns or rows may not compute exactly as shown.
The Ore Reserves are stated as wet (in-situ) tonnes processed at the crusher.
All figures are in metric tonnes.

The Ore Reserve contains only those Mineral Resources which are classified as Measured and Indicated and constrained by an economically and technically mineable engineered pit design, as described previously. The Ore Reserve has also been constrained by the property boundary and considering the position of existing and planned surface infrastructure.

The Competent Person utilised project-specific technical and economic Modifying Factors to estimate the Ore Reserves at Amapá. Sufficient mining and metallurgical work have been completed – and is further reinforced by historical production data – to support the Ore Reserve Estimate.

The Competent Person understands that the Ore Reserve Estimate can be affected by unforeseen metallurgical, environmental, permitting, legal, title, taxation, socio-economic, marketing, or political issues. However, concerning environmental, licensing, legal, title, tax, and marketing considerations, the Competent Person, has relied upon the information presented in the full PFS report. As required per the JORC Code 2012, Table 1, needed for the reporting of Ore Reserves, is available here.

Mine Design

Pit designs and pushbacks were generated using MinePlan® software and adopting preliminary geotechnical, hydrological, cost and density parameters. The designs include benches, berms, and haul roads. The final pit mine design is presented in the figure here.

A LOM production plan was scheduled using the MinePlan® Scheduler Optimiser. The solids used in the mine schedule were based on the final pit design, with an SMU (Selective Mining Unit) of 100 m x 200 m x 4 m. The mining schedule per year is over 13 pits and is shown in the figure here.

Mining

Mining at the Amapá mine will use conventional open pit methods involving drilling, blasting, loading, and hauling ore and waste by a mining contractor. Operations will be conducted based on 365 operating days per year with three 8-hour shifts per day. An allowance has been made for the weather. Ore production is planned at an optimum rate of 12.6 Mtpa. Generally, the total rock mining rate (ore + waste) has been kept below 20 Mtpa. Grade control drilling will be used to delineate the ore zones for excavation as well as low-grade material and waste. Drilling and blasting of ore and waste rock will be required, while overburden materials will be free digging. Ore and waste will be loaded into 100 t capacity off-highway haul trucks to stockpiles, designated waste dumps, or used for construction of the TSF.

Extraction, loading, hauling, and disposal of ore and waste, internal materials handling, mining access opening and maintenance, drainage system operation, and maintenance will all be undertaken by, and the responsibility of, a specialist mining contractor under the management supervision of DEV. For the PFS, DEV obtained a mining cost quote from an experienced Brazilian mining contractor with over 14 years of operational experience in the mining and heavy construction markets.

Processing

Historically the beneficiation plant at the Amapá Project produced four product iron ore concentrates. The development strategy of DEV was to simplify the product stream and focus on higher grade and higher value products, albeit at a lower volume than historical production. The plan is to produce 5.28 Mtpa (dry) of Fe concentrate, consisting of 4.23 Mtpa at 65.4% Fe and 0.92 Mtpa at 62% Fe concentrate. Due to the production history and the metallurgical test work previously completed to achieve the production targets, no further test work was carried out for this PFS.

As far as processing engineering, there were two main work programmes. The first was assessing the current condition of the plant and infrastructure and the work required to refurbish the plant back to its previous state. The second was the flowsheet upgrade and improvements needed to achieve the production mix and targets as proposed within the PFS. ECM Projetos Industriais (“ECM”), who constructed the original Amapá processing plant, was responsible for designing and costing the required process flowsheet modifications and upgrades. ECM conducted an independent analysis of all the data and information available to validate it as the basis for the process design requirements of the PFS Study.

In summary, the process flow sheet consists of an initial crushing, screening, and homogenisation stage. This process produces two streams of crushed ore. The first stream is a +1mm -12mm product fed into the first milling circuit, magnetic separators and then to a desliming circuit before floatation.

The second stream is a -1mm product passed through a spiral circuit to produce a 62% Fe spiral concentrate. Various other flows from the second stream then report either back to the first milling circuit, the second ball mill circuit or the new magnetic separator circuit. The product from the new magnetic separator circuit is sent back to the first milling and then onto a desliming circuit before floatation.

The feed to the deslime circuit consists of the second milling ground product, the first milling circuit magnetic concentrate and the spiral concentrate dewatering screen undersize streams. Desliming occurs via three stages of hydrocyclones. The second and third-stage underflow streams are combined to report to the reverse floatation circuit.

The feed from the desliming circuit is sent to conditioning tanks, where the material is prepared for reverse floatation. The reverse floatation consists of two rougher stages and a final cleaner stage, where the floatation cell tails form the feed for the next step. The final cleaner produces an iron concentrate in which the silica and other impurities have been floated off. This iron concentrate is fed into a concentrate thickener which increases sedimentation. This stream then reports to the filter plant. The filtered concentrate is conveyed to a sampling system and then to the 65.4% Fe BFPF product stockpile. A summary of the process flow sheet can be found here.

Infrastructure

The surface infrastructure from the previous mining and processing operations still exists, including roads, administrative buildings, workshops, and processing buildings. When the mine closed, the mine’s facilities, processing plant, railway and port fell into disrepair. DEV has already begun the rehabilitation of some of the administrative buildings. The intent is to rehabilitate this infrastructure as part of the restart of the Amapá Project, and the costs associated with this were included in the PFS CAPEX.

The Amapá mine’s previous demand was stated as 25 MW; the new power requirement is 30 MW. The existing transmission line, at 69 kV voltage, which interconnects the UHE Coaracy Nunes (Hydroelectric Dam) to Serra do Navio, will not support Amapá mine’s power requirement.

DEV has been in discussion with Companhia de Eletricidade do Amapá (“CEA”) and has been informed that CEA is upgrading the regional transmission lines. CEA intends to construct and upgrade the current transmission line at a voltage of 138 kV from UHE Coaracy Nunes to Pedra Branca do Amapari, then to the plant, connecting to a new 138 kV – 30 MVA substation which DEV will construct. The CEA project timeline for this upgrade is in line with the development timeline of the Amapá Project. Power to the port is provided via connection to the Santana grid provided by CEA and is not expected to require any significant upgrade.

The water supply for the processing plant will come from the accumulated water in the TSF’s water retention ponds. In addition to the TSF return water from normal operations, fresh water will be taken from a local creek and pumped to the TSF. A separate line from the TSF’s return water supply will supply the potable water plant for potable water requirements.

Logistics

As mentioned, DEV owns or has concessions over the key logistics from the mine site to loading vessels at the Port of Santana on the Amazon River. The key logistical components are shown in the figure here.

The access haul road, approximately 13 km in length, is used to access the mine and haul concentrates between the concentrate stockpiles and the railhead at Pedra Branca do Amapari. The option to construct an overland conveyor belt to replace the truck haulage operation is viewed as the best way forward, and this has been included in the process plant upgrade work undertaken by ECM. This work will be completed in the initial two years after start-up.

The rail infrastructure is standard gauge and is 194 km in length, with a distance of 180 km between the railhead and the port. The capital expenditure on the railway will occur over two stages, the latter occurring as deferred CAPEX. Once the second stage of investment is completed, the estimated cargo handling capacity of the railway is estimated to be 6.4 million wet tonnes of ore.

The original port facility was constructed in the 1950s to handle manganese ore and consists of a rail loop, dual bottom-car dumper, central out load conveyor with stacker and reclaimer connected to a floating dock. In March 2013, the port suffered a failure. After the failure, DEV engaged an EPCM contractor to oversee the design and reconstruction of the port facility and associated works. Phase one of the work was completed; however, due to the iron ore price, the construction work stopped shortly after in 2014. Since operations ceased, the port was abandoned and fell into disrepair. The PFS study and CAPEX anticipate the continuation of the works per the EPCM contractor design. The repair of the jack-up rig and the rehabilitation of the port facilities. The figure here shows the planned materials handling and ship loading at the Santana port.

Mineral Title / Permitting

DEV and its subsidiaries own the Amapá Project and its licenses, mining rights and concessions. As the Project was previously operating, it held all the necessary permission to operate. However, since it ceased operations, many have lapsed.

DEV owns four Mining Concessions. The first three concessions are for iron ore, and the last is a gold extraction license. DEV has a joint venture with Mina Tucano Ltda (“Mina Tucano”), which allows Mina Tucano to mine gold and allows DEV to mine iron ore from Mina Tucano’s license. None of the historical mineral resources on license Mina Tucano is included as part of this PFS.

Although DEV owns the Mining Concessions, it does not currently have a Mine Extraction and Processing Permit. To do so, DEV must obtain an Operational License (“LO”) from the state environment authority. Once this has been completed, DEV will apply for Mine Extraction Permit. Since the Project was acquired by its current owners in 2022, DEV has been making the required regulatory filings and embarking on studies and maintenance works to comply with the National Mineral Agency requirements.

Before the suspension of mining, the Project had numerous LOs across the mining, rail, and port operations. These LOs expired between 2013 and 2018. In 2022 DEV began the regularisation of the expired environmental permits. In consultation with the Amapá State Environmental Agency, and the relevant state authorities, DEV has requested that the requirement for an environmental impact study be waived. This request for a waiver was on the basis that the previous LOs were granted on an operation that is substantially the same as is currently planned and remains applicable to future operations. DEV proposes that the company submit an Environmental Control Plan – “PCA” (Plano de Controle Ambiental); and Environmental Control Report – “RCA” (Relatório de Controle Ambiental). DEV has begun its proposed permit pathway for the Project based on the above requirements of a PCA and RCA.

The proposed permit pathway for the Project has both legal and practice precedent and is a reasonable approach, given the Projects status and level of development.

The state owns the railway line and associated land; therefore, for the Project to utilise this, it requires both the LO and a concession agreement with the State of Amapá. The previous operators of the Project were granted this concession in 2006 for 20 years under specific terms and conditions. The reinstatement of this concession to one of DEV’s 100% owned subsidiaries was in December 2019 and was extended to 2046. The concession allows DEV’s 100% owned subsidiary to operate the railway to primarily transport iron ore from the mine to its port in Santana. The State of Amapá owns the surface rights associated with the railway, and under the Railway Concession, DEV has been granted use over these surface rights.

In addition to the LO detailed above, the company’s port is regulated by the Agencia Nacional de Transportes Aquaviários (“ANTAQ”). As a result of the change of ultimate beneficiary of DEV, a change of control request was filed. This change of control was granted in November 2021. As part of the port change of control, ANTAQ has agreed to cease the recommended abrogation of the port concession. DEV owns the surface rights associated with the port.

The principal surface rights applicable to the Project are those above the mining concessions, those associated with the railway from the mine to the port and those associated with the port in Santana, Amapá. The surface rights above the Mining Concessions cover approximately 5,580 ha. DEV has lease agreements which cover this area.

Competent Person’s Statement

The information that relates to Mineral Resources and Ore Reserves is based on information compiled by Geraldo Majella, who is an associate of Prominas and a Member of the Australian Institute of Geoscientists (AIG). Geraldo Majella has sufficient relevant experience to the style of mineralisation and type of deposit under consideration and to the activity for which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for reporting of Exploration Results, Exploration Targets, Mineral Resources and Ore Reserves” (JORC Code). Geraldo Majella consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

Kiran Morzaria has also reviewed and approved the technical information in his capacity as a Qualified Person under the AIM Rules.

Opportunities

The PFS identified several opportunities that DEV intends to investigate further before the start of the feasibility study.

Mina Tucano Exploration Target

DEV has a right to explore mine for iron ore on Mina Tucano’s licenses. In 2011 DEV evaluated all the historical drilling on this license and further explored the license. DEV evaluated some 986 holes to establish a mineral resource estimate. The mineral recourse was estimated at a 25% Fe cut-off, 142.51 Mt at 36.77% Fe. This estimate covered measured, indicated, and inferred mineral resources. This historical mineral resource estimate cannot be considered a mineral resource estimated under JORC 2012.

The initial data and core will need to be reviewed and audited to develop this exploration target, and additional resource drilling will need to be carried out. From this, if applicable, a JORC 2012mineral resource could be estimated.

Port Loading Configuration

As part of a trade-off study on port loading, consulting engineers identified a modification of the railway loop and a change in the stockpile arrangement and associated product transportation. If these could be achieved, it would substantially reduce the retaining wall costs, as the rail loop would be moved approximately 100 m further away from the riverbank.

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 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.

The Ore Reserve and Mineral Resource Estimate have been prepared by Competent Persons, with Competent Person’s Statements at the end of the release. The Ore Reserves and Mineral Resources that underpin the production target have been prepared by a Competent Person that meets the requirements of the JORC Code.

The PFS developed engineering designs to provide costs at a +/- 25% level of accuracy. The company has concluded that it has a reasonable basis for giving the forward-looking statements and forecasted financial information included in this announcement.

This announcement has been prepared in accordance with JORC code 2012 and AIM listing rules. All material assumptions relating to production and financial forecasts are detailed in this report. Material and economic assumptions are summarised in the body of this release. Rounding may cause some computational discrepancies for totals in the tables in this announcement.

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 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.

For further information contact:
Cadence Minerals plc	+44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
Darshan Patel

Glossary

Al₂O₃	Aluminium oxide is a chemical compound of aluminium and oxygen
C1 Cash Costs	Means operating cash costs, including mining, processing, geology, OHSE, rail, port and site G&A, divided by the tonnes of iron ore concentrate produced
Canga	An iron-rich rock formed where material weathered from an original iron ore deposit has been cemented by iron minerals.
Colluvium	Loose, unconsolidated material that accumulates above the weathering iron ore bodies.
Core	A cylindrical section of a naturally occurring substance. Most core samples are obtained by drilling with special drills into the substance, such as sediment or rock, with a hollow steel tube called a core drill. The hole made for the core sample is called the “core hole.”
Cut-off grade	The lowest grade of mineralised material that qualifies as ore in a given deposit or rock of the lowest assay is included in an ore estimate.
Discount rate	The interest rate is used in discounted cash flow analysis to determine the present value of future cash flows.
Drillhole	A drill hole is formed by the act or process of drilling boreholes using bits s the rock-cutting tool. The bits are rotated by various types and sizes of mechanisms motivated by steam, internal combustion, hydraulic, compressed air, or electric engines or motors.
EBITDA	Earnings before interest, taxes, depreciation, and amortisation is an alternate measure of profitability to net income. By stripping out the non-cash depreciation and amortisation expense as well as taxes and debt costs dependent on the capital structure, EBITDA attempts to represent cash profit generated by the company’s operations.
EPC	means a company is contracted to provide engineering, procurement and construction services by the owner. The EPC contractor has direct contracts with the construction contractors.
EPCM	means a company contracted to provide engineering, procurement and construction management services. The owner contracts other companies directly to offer construction services, and they are usually managed by the EPCM contractor on the owner’s behalf.
Fe	Chemical symbol for iron. It is a metal that belongs to the first transition series and group 8 of the periodic table. It is, by mass, the most common element on Earth, right in front of oxygen (32.1% and 30.1%, respectively), forming much of Earth’s outer and inner core. It is the fourth most common element in the Earth’s crust.
Feasibility study	This study is the most detailed and will determine definitively whether to proceed with the Project. A detailed feasibility study will be the basis for capital appropriation and will provide the budget figures for the Project. Detailed feasibility studies require a significant amount of formal engineering work, are accurate to within 10-15% and can cost between ½-1½% of the total estimated project cost.
Final Investment Decision (“FID”)	FID is the point in the capital project planning process when the decision to make major financial commitments is taken. At the FID point, major equipment orders are placed, and contracts are signed for EPC
Floatation circuit	is a standard technology for concentrating a broad range of minerals and wastewater treatments. Froth floatation is based on differences in the ability of air bubbles to adhere to specific mineral surfaces in a solid/liquid slurry.
Flowsheet	The flowsheet or a process flow diagram (“PFD”) is commonly used in chemical and process engineering to indicate the general flow of plant processes and equipment. The PFD displays the relationship between major plant facility equipment and does not show minor details such as piping details and designations.
Itabirite	Itabirite is a banded quartz hematite schist, very similar to banded iron formation in appearance and composition. Friable Itabirite is extensively weathered, leading to disaggregation of the individual mineral grains comprising the rock;
Internal Rate of Return	is a method of calculating an investment’s rate of return. The term internal refers to the fact that the calculation excludes external factors, such as the risk-free rate, inflation, the cost of capital, or financial risk.
Haematite	An iron oxide mineral with the chemical formula Fe₂O₃;
Hydrocyclone	is a type of cyclonic separator that separates product phases mainly on the basis of differences in gravity with aqueous solutions as the primary feed fluid
Grade	Relative quantity or the percentage of ore mineral or metal content in an ore body;
Indicated Mineral Resources	That part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade, and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed;
Inferred Mineral Resources	That part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes which may be limited or of uncertain quality and reliability;
Kt	Thousand tonnes;
Measured Mineral Resources	The part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade, and mineral content can be estimated with a high level of confidence.
Metallurgical test work	This is the process of testing how the resource material will respond to standard metallurgical processes, such as floatation, gravity concentration and leaching. They are conducted on coarse assay reject material using standard test conditions. The objective is to determine how the resource material reacts to commonly accepted recovery processes and gain a preliminary estimate of metal recoveries.
Mine planning	A plan or schedule of the extraction of ore to optimise the return (of profit) on investment through capital investment, design, extraction scheduling, and preparation of the mineral product according to specifications.
Mineral Reserves	The economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social, and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Ore Reserves are subdivided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves.
Mineral Resource	A concentration or occurrence of material of intrinsic economic interest in or on the Earth’s crust in such form, quality, and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics, and continuity of a Mineral Resource are known, estimated, or interpreted from specific geological evidence and knowledge. Mineral Resources are subdivided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
Mn	Chemical symbol for Manganese. It has the atomic number 25. It is not found as a free element in nature; it is often found in minerals in combination with iron.
Modifying factors	The term ‘modifying factors’ is defined to include mining, metallurgical, economic, marketing, legal, environmental, social and governmental considerations.
Net present value	This is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyse the profitability of a projected investment or Project.
Open pit	An excavation or cut made at the surface of the ground for the purpose of extracting ore and which is open to the surface for the duration of the mine’s life
Ore	is natural rock or sediment containing one or more valuable minerals, typically metals, that can be mined, treated and sold at a profit.
P	The chemical symbol for Phosphorus with atomic number 15.
Pellet feed	Iron ore fines used to produce pellets
Pit Optimisation	A process whereby a series of optimised shells for open pits are generated, each corresponding to a specific commodity price assumption.
Pit shell	A design of an open pit obtained from the process of open-pit optimisation
Prefeasibility study	It is more detailed than a Scoping Study. A Prefeasibility study is used in determining whether to proceed with a detailed feasibility study and as a “reality check” to determine areas within the Project that require more attention. Prefeasibility studies are done by factoring known unit costs and by estimating gross dimensions or quantities once conceptual or preliminary engineering and mine design has been completed. Prefeasibility studies have an accuracy of 20-30%.
Proven Ore Reserve	is the economically mineable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses which occur when the material is mined. A Proven Orel Reserve represents the highest confidence category of Mineral Reserve estimate. It implies a high degree of confidence in the geological factors and a high degree of confidence in the Modifying Factors.
Probable Ore Reserve	is the economically mineable part of an Indicated Mineral Resource and, in some circumstances, a Measured Mineral Resource. It includes diluting material and allowances for losses which may occur when the material is mined. A Probable Mineral Reserve has a lower level of confidence than a Proved Mineral Reserve but is of sufficient quality to serve as the basis for a decision on the development of a deposit.
SiO₂	Silicon dioxide, also known as silica, is an oxide of silicon most commonly found in nature as quartz and in various living organisms. In many parts of the world, silica is the major constituent of sand.
Spiral concentrate	Iron Ore product produced from the beneficiation plant.
t	Tonnes

– Ends –

^[1] Anglo American (2012), Annual Report (pp.89)

Cadence Minerals #KDNC – Mineral Resource Increase & Upgrade at the Amapá Iron Project

7th October 2022 / Leave a comment

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that DEV Mineração S/A (“DEV”) has completed a new Mineral Resource Estimate (“MRE”) in compliance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code, 2012”) for the Amapá Iron Ore Project Brazil.

Highlights:

Substantial increase in total Measured, Indicated and Inferred Mineral Resources, to 276.24 Million Tonnes (“Mt”) grading 38.33% Fe
New Measured Resource of 55.33 Mt grading 26% Fe
Measured and Indicated Resource increase to 229.48 Mt at 38.76% Fe, from 176.7 Mt at 39.75% Fe^[1] , reported within an optimised pit shell and using a cut-off grade of 25% Fe.
Inferred Mineral Resource increased to 46.76 Mt at 36.20% Fe, from 8.7Mt at 36.9% Fe, reported within an optimised pit shell and using a cut-off grade of 25% Fe.

Cadence CEO Kiran Morzaria commented:

“The main aim of our new mineral resource statement was to provide a sound basis for pre-feasibility studies. In particular, to convert a significant portion of the indicated mineral resource into the measured category. The results reported today have achieved this goal and more.

The results clearly indicate the robustness and consistency of the Amapá resource.

As we move closer to the next stage of development, this higher degree of certainty in our mineral resource estimate provides more funding options for the Project. The new measured resource and the overall increase in the mineral resource provides a sound basis for an initial 15-year mine life, with the potential to expand this further by upgrading the 46.76 Mt of inferred resources.”

Assumptions and Method of MRE

Prominas Mining Ltd (“Prominas”) was commissioned by DEV Mineração S/A (“DEV”) to complete a JORC Code (2012) compliant MRE on the 100% owned mineral assets of DEV comprising the Amapá Iron Ore Deposit (“Amapá” or the “Project”) located in Amapá State, Brazil. DEV holds the mining rights to the Project, and Cadence, via a joint venture company, owns 27% of DEV. The classification of Mineral Resources was considered appropriate on the basis of geological confidence, drill spacing, sample interval, QAQC and estimation performance.

Before this MRE, the most recent MRE on the Amapá Project was completed in 2020 by Cadence (“2020 MRE”). The 2020 MRE was estimated following the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) “Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines” (CIM, 2019). The 2020 MRE was limited to the Friable Hematite, Friable Itabirite and Friable Altered Itabirite material types. While the current MRE included these material types plus Colluvium and Canga material within the resource statement. This inclusion of Colluvium and Canga into the MRE was deemed appropriate as it was used as ore in historic production. The inclusion of Colluvium and Canga in the MRE represents the majority of the increase in the current MRE.

The geologic units that underlie the region consist of Archean basement rocks, TTG terrains (Guianense Complex, Tumucumaque Complex and Água Fria Metatonalite), discordantly overlaid by Paleoproterozoic greenstone belts (Vila Nova Group), in turn, overlain by Cenozoic lateritic deposits and Quaternary alluvial materials. In the Amapá System area, the iron ore (oxide and silicate facies itabirites), calc-silicate and carbonatic rocks occur in two regions. The first is a synform (locally named APW/APS) above the unit of metabasic rocks (mainly amphibolites) and quartz mica schist biotite and muscovite-bearing schist, where the mine is located. The second is Dragão, a mineralised body located 3.5km to NE with orientation NW/SE, assumed as a potential resource and not included in this mineral resources estimate.

Mineralisation extends approximately 6.5km in strike length, 1.5km in width, and exists in some areas to more than 100m in depth. Geological processes have weathered this proto-resource, the hard itabirite (ITC), actually considered waste, transforming part of the volume into mineral resources, the soft itabirite (ITB) illustrated in Figure 1 -Amapá Iron Ore Mineralisation here

A 3D geological model was built by an implicit modelling method based on interpreted geological domains using the drillhole database and study of the old sections provided by DEV, then used to flag the sample data for statistical analysis and to limit the resource estimation. For this study, statistical and geostatistical analysis was carried out on drilling data composited to 4 m downhole for APW/APS only. This included variography to model spatial continuity relationships in the geological domains.

Geostatistical analysis and interpolation were undertaken using MinePlan© proprietary software. The Ordinary Kriging interpolation method was used for the estimation of Fe, Al₂O₃, SiO₂, P, and Mn, using variogram parameters defined from the geostatistical analysis for the APW/APS domains.

Wet Bulk density values for the Amapá deposit were assigned based on data provided by DEV. The density values were assigned to 15 lithologies based on almost 678 density samples for friable and compact material collected from 2006 to 2012.

Mineral Resource Statement

The MRE has been reported at a cut-off grade of 25% Fe constrained by a resource open pit and the topography dated April 2014 (grey surface in Figure 1 here), in line with the Reasonable Prospects For Eventual Economic Extraction (RPEEE) principle. The MRE has been estimated, considering a product revenue of US$ 120/t. The geotechnical parameters, metallurgical recovery and updated mining costs were all provided by DEV.

Table 1: Gross and attributable Mineral Resources for the Amapá Iron Ore Project at a Cut-Off Grade reported within an optimised pit and above a cut-off grade of 25% Fe

Classification	Material	Tonnage (Mt)	Attributable Tonnage (Mt)	Fe (%)	SiO₂(%)	Al₂O₃(%)	P (%)	Mn (%)
Measured	Friable Altered Itabirite	33.31	8.99	38.47	30.42	7.22	0.170	1.19
	Friable Itabirite	14.65	3.96	39.55	36.50	2.81	0.086	0.88
	Friable Haematite	0.69	0.19	62.63	4.32	2.20	0.226	0.38
	Colluvium	5.84	1.58	38.80	21.66	11.89	0.177	0.70
	Canga	0.84	0.23	50.03	5.68	10.60	0.971	0.18
	Sub-total	55.33	14.94	39.26	30.40	6.54	0.161	1.03
Indicated	Friable Altered Itabirite	66.43	17.94	37.41	32.11	6.73	0.173	1.29
	Friable Itabirite	37.14	10.03	39.73	35.73	2.91	0.103	0.92
	Friable Haematite	1.5	0.41	57.53	12.85	2.18	0.113	0.43
	Colluvium	64.22	17.34	37.98	23.11	11.86	0.140	0.58
	Canga	4.86	1.31	48.81	8.98	10.08	0.579	0.21
	Sub-total	174.15	47.02	38.60	28.75	7.86	0.156	0.91
Mea. + Ind.	Friable Altered Itabirite	99.74	26.93	37.76	31.55	6.89	0.172	1.26
	Friable Itabirite	51.79	13.98	39.68	35.95	2.88	0.098	0.91
	Friable Haematite	2.19	0.59	59.14	10.16	2.19	0.149	0.41
	Colluvium	70.06	18.92	38.05	22.99	11.86	0.143	0.59
	Canga	5.7	1.54	48.99	8.49	10.16	0.637	0.21
	Sub-total	229.48	61.96	38.76	29.15	7.54	0.157	0.94
Inferred	Friable Altered Itabirite	11.27	3.04	37.01	31.98	6.40	0.190	1.67
	Friable Itabirite	3.09	0.83	38.60	35.35	3.28	0.144	1.41
	Friable Haematite	0.53	0.14	50.06	21.36	2.88	0.094	0.85
	Colluvium	30.21	8.16	34.80	26.20	12.92	0.107	0.53
	Canga	1.66	0.45	47.19	11.60	9.98	0.381	0.27
	Sub-total	46.76	12.63	36.20	27.62	10.49	0.139	0.86
TOTAL		276.24	74.58	38.33	28.89	8.04	0.154	0.93

Notes:

(1) The Mineral Resource is considered to have reasonable prospects for eventual economic extraction based on an optimised pit shell

(2) Cut-off grade of 25% Fe applied

(3) Tonnages are reported as wet tonnes

(4) Mineral Resources are not reserves until they have demonstrated economic viability based on a Feasibility Study or Pre-Feasibility Study

(5) The Mineral Resource Estimate has an effective date of 31 August 2022

(6) Mineral Resources have been classified in accordance with the Australian Code for Reporting of Exploration Results. Mineral Resources and Ore Reserves (JORC Code 2012)

(7) The attributable tonnes represent the part of the Mineral Resource that will be attributable to Cadence Minerals’ 27% interest in the Project

(8) The operator is DEV

A 3D schematic model of the Amapá Mineral Resource Estimate is available here

Prominas notes that the Mineral Resource has a reasonable prospect for eventual economic extraction but is not currently considered Ore Reserves. Ore Reserves are estimates of the tonnage and grade or quality of material contained in a Mineral Resource that can be economically mined and processed. To be considered an Ore Reserve, modifying factors must be applied to the MRE as part of the preparation of a Pre-Feasibility or Feasibility Study. The estimated amount of saleable material contained in the final product must demonstrate a positive net present value using an appropriate discount rate and must demonstrate that eventual extraction could be reasonably justified.

Prominas are not aware of any factors (environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors) that have materially affected the Mineral Resource Estimate. The data used for the MRE update were drill hole databases with proper validations, topographic surveys and the previous Mineral Resource models provided by DEV with the work undertaken by Prominas, which included several site visits during 2021.

As required per the JORC Code 2012. Table 1 needed for the reporting of MREs is available here

Competent Person’s Statement

The information that relates to Mineral Resources is based on information compiled by Geraldo Majella, who is an associate of Prominas and a Member of the Australian Institute of Geoscientists (AIG). Geraldo Majella has sufficient relevant experience to the style of mineralisation and type of deposit under consideration and to the activity for which he is undertaking to qualify as a Competent Person as defined in the JORC Code (2012). Geraldo Majella consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

Kiran Morzaria has also reviewed and approved the technical information in his capacity as a qualified person under the AIM Rules.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

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.

Glossary

Al₂O₃	Aluminium oxide is a chemical compound of aluminium and oxygen.
Block model	A three-dimensional electronic model in which geological characteristics and qualities are housed.
Canga	An iron-rich rock formed where material weathered from an original iron ore deposit has been cemented by iron minerals.
Colluvium	Loose. unconsolidated material that accumulates above the weathering iron ore bodies.
Core	A cylindrical section of a naturally occurring substance. Most core samples are obtained by drilling with special drills into the substance, such as sediment or rock, with a hollow steel tube, called a core drill. The hole made for the core sample is called the “core hole.”
Cut-off grade	The lowest grade of mineralised material that qualifies as ore in a given deposit or rock of the lowest assay included in an ore estimate.
Drillhole	A drill hole formed by the act or process of drilling boreholes using bits asthe rock-cutting tool. The bits are rotated by various types and sizes of mechanisms motivated by steam, internal-combustion, hydraulic, compressed air, or electric engines or motors.
Fe	Chemical symbol for iron. It is a metal that belongs to the first transition series and group 8 of the periodic table. It is by mass the most common element on Earth, right in front of oxygen (32.1% and 30.1%. respectively), forming much of Earth’s outer and inner core. It is the fourth most common element in the Earth’s crust.
Feasibility study	This study is the most detailed and will determine definitively whether to proceed with the Project. A detailed feasibility study will be the basis for capital appropriation and will provide the budget figures for the Project. Detailed feasibility studies require a significant amount of formal engineering work, are accurate to within 10-15% and can cost between ½-1½% of the total estimated project cost.
Itabirite	Itabirite is a banded quartz hematite schist, very similar to banded iron formation in appearance and composition. Friable Itabirite is extensively weathered leading to disaggregation of the individual mineral grains comprising the rock;
Haematite	An iron oxide mineral with the chemical formula Fe₂O₃;
Grade	Relative quantity or the percentage of ore mineral or metal content in an ore body;
Indicated Mineral Resources	That part of a Mineral Resource for which tonnage, densities, shape,physical characteristics, grade, and mineral content can be estimated with a reasonable level of confidence. It is based on exploration. sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed;
Inferred Mineral Resources	That part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes which may be limited or of uncertain quality and reliability;
Interpolation	Estimation of a statistical value from its mathematical or graphical position intermediate in a series of determined points;
Kt	Thousand tonnes;
Lithologies	The lithology of a rock unit is a description of its physical characteristics visible at outcrop, in hand or core samples, or with low magnification microscopy. Physical characteristics include colour, texture, grain size, and composition;
Measured Mineral Resources	The part of a Mineral Resource for which tonnage, densities, shape,physical characteristics, grade, and mineral content can be estimated with a high level of confidence.
Mineral Reserves	The economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out and include consideration of and modification by realistically assumed mining, metallurgical, economic,marketing, legal, environmental, social, and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Ore Reserves are subdivided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves.
Mineral Resource	A concentration or occurrence of material of intrinsic economic interest in or on the Earth’s crust in such form, quality, and quantity that there are reasonable prospects for eventual economic extraction. The location,quantity, grade, geological characteristics, and continuity of a Mineral Resource are known, estimated, or interpreted from specific geological evidence and knowledge. Mineral Resources are subdivided, in order of increasing geological confidence into Inferred, Indicated and Measured categories.
Mn	Chemical symbol for Manganese. It has an atomic number 25. It is not found as a free element in nature; it is often found in minerals in combination with iron.
Implicit modelling	Implicit modelling is generated by computer algorithms directly from a combination of measured data and user interpretation. The modelling requires a geologist’s insight, but this is made in the form of trends,stratigraphic sequences, and other geologically meaningful terms. This approach is faster, more flexible, and fundamentally better suited to modelling geology.
Modifying factors	The term ‘modifying factors’ is defined to include mining, metallurgical,economic, marketing, legal, environmental, social and governmental considerations.
Net present value	This is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyse the profitability of a projected investment or Project.
Open pit	An excavation or cut made at the surface of the ground for the purpose of extracting ore and which is open to the surface for the duration of the mine’s life
Ordinary kriging	In the estimation of mineral resources by geostatistical methods, the use of a weighted moving-average approach both to account for the estimated values of spatially distributed variables, and to assess the probable error associated with the estimates.
P	The chemical symbol for Phosphorus with atomic number 15.
Pit Optimisation	A process whereby a series of optimised shells for open pits are generated each corresponding to a specific commodity price assumption.
Pit shell	A design of a open-pit obtained from the process of open-pit optimisation
Pre Feasibility study	Is more detailed than a Scoping Study. A Prefeasibility study is used in determining whether to proceed with a detailed feasibility study and as a “reality check” to determine areas within the Project that require more attention. Pre-Feasibility studies are done by factoring known unit costsand by estimating gross dimensions or quantities once conceptual or preliminary engineering and mine design has been completed. Pre-Feasibility studies have an accuracy within 20-30%.
Scoping study	An order of magnitude study is an initial financial appraisal of a mineral resource. Depending on the size of the Project, an order of magnitude study may be carried out. It will involve a preliminary mine plan and is the basis for determining whether to proceed with more detailed engineering work. Order-of-magnitude studies are developed by copying plans and factoring known costs from existing projects completed elsewhere and are accurate to within 40–50%;
SiO₂	Silicon dioxide, also known as silica, is an oxide of silicon most commonly found in nature as quartz and in various living organisms. In many parts of the world, silica is the major constituent of sand.
Strike	This is the direction of the line formed by the intersection of a fault, bed, or other planar feature and a horizontal plane. Strike indicates the attitude or position of linear structural features such as faults, beds, joints, and folds.
t	Tonnes

– Ends –

For further information:
Cadence Minerals plc	+44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
Darshan Patel

^[1] Cadence Minerals 2 November 2020 Update Mineral Resource Estimate – Amapa Iron Ore, Available at https://www.londonstockexchange.com/news-article/KDNC/updated-mineral-resource-estimate-amapa-iron-ore/14739627.

Cadence Minerals #KDNC – Fourth Amapa Iron Ore Shipment Completed and En Route

25th April 2022 / Leave a comment

Further to the announcement made on the 7 April 2022, Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that DEV Mineração S.A’s (“DEV”) has completed the sale and shipment of Iron Ore from the Amapa Iron Ore Project (“Amapa Project”).

Highlights:

DEV has shipped and sold the fourth batch of iron ore from the stockpiles.
The loading of the 48,492 wet tonnes of iron ore sinter fines (approx. 58% Fe) at Companhia Docas de Santana (“CDSA”) was completed on the 23 April
Iron Ore 62% Fe, CFR China at US$150 per tonne (22/04/2022)
Approximately 1.2 Mt of iron ore is currently stockpiled in DEV’s wholly-owned port

DEV has shipped and sold the fourth batch of the iron ore from the stockpiles at Santana, Amapa, Brazil. The loading of the 48,492 iron ore sinter fines (approx. 58% Fe) at CDSA was completed on 23 April, and the ship departed yesterday, 24 April. This shipment represents the first iron ore export since Cadence vested its equity interest (27%) in the Amapa Project earlier this year.

The first three shipments occurred in the first half of last year and were approved via a court petition (“Approved Court Petition”). Details of the Approved Court Petition can be found here. The Approved Court Petition limited the sales of the iron ore stockpiles to US$10 million of net profits (“Approved Court Disposal Funds”).

The Approved Court Disposal Funds were applied per the Approved Court Petition, with DEV retaining a portion of the net profits. These net profits and the earnings from the current shipment will be paid to the Secured Banks Creditors as per the settlement agreement announced on 29/12/2021.

Details of Ownership and Joint Venture Agreement

– Ends –

For further information:

Cadence Minerals plc	+44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
Darshan Patel

Novum Securities Limited (Joint Broker)	+44 (0) 207 399 9400
Jon Belliss

Qualified Person

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.

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014

Cadence Minerals #KDNC Provides PFS Update for the Amapa Iron Ore Project & Appoints Wardell Armstrong as PFS Manager

21st March 2022 / Leave a comment

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.

– Ends –

For further information:

Cadence Minerals plc	+44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
Darshan Patel

Novum Securities Limited (Joint Broker)	+44 (0) 207 399 9400
Jon Belliss

Qualified Person

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

15th March 2022 / Leave a comment

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.

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%.

– Ends –

For further information:

Cadence Minerals plc	+44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
Darshan Patel

Novum Securities Limited (Joint Broker)	+44 (0) 207 399 9400
Jon Belliss

Qualified Person

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

7th February 2022 / Leave a comment

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

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.

– Ends –

For further information:

Cadence Minerals plc	+44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
Darshan Patel

Novum Securities Limited (Joint Broker)	+44 (0) 207 399 9400
Jon Belliss

Qualified Person

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 – Execution of Settlement Agreement and Vesting of Initial US$2.5m for 20% of the Amapa Iron Ore Project

29th December 2021 / Leave a comment

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

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.

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.

– Ends –

For further information:

Cadence Minerals plc	+44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
Darshan Patel

Novum Securities Limited (Joint Broker)	+44 (0) 207 399 9400
Jon Belliss

Qualified Person

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 -Port Concession Update, Amapa Project

1st November 2021 / Leave a comment

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.

– Ends –

For further information:

Cadence Minerals plc	+44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
Darshan Patel

Novum Securities Limited (Joint Broker)	+44 (0) 207 399 9400
Jon Belliss

Qualified Person

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 – Bank Credit Committee Approval for Amapa Project Settlement Agreement

11th October 2021 / Leave a comment

Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to announce that it has received confirmation from the secured bank creditors that they have obtained approval from their credit committees with respect to the proposed terms of the settlement agreement (“Approval”).

Highlights:

Bank credit committee approval for secured bank creditors assits in paving the way for Cadence to vest initial 20% in the Amapa Iron Ore Project
On the effective date of the settlement agreement Cadence’s and Indo Sino’s joint venture company will own 99.9% of the Amapa Project
The Amapa Iron Ore Project consists of an integrated mine, processing plant, railway, and privately owned port. It was previously owned by Anglo American and produced 6.1 million tonnes of iron ore per annum, and was valued at US$ 660 million.
The current Mineral Resource of the Amapa Project consists of 7 million tonnes grading 39.7% Fe in the Indicated category and 8.7Mt at 36.9% Fe in the Inferred catergory

The Approval is subject to the completion of KYC (know your client) and the finalisation of the documentation reflecting the agreement in principle as announced on the 2 September 2020). The Approval assists in paving the way for Cadence to vest its initial 20% indirect interest in Amapa Iron Project (“The Amapa Project”). The Amapa Project consists of an integrated mine, processing plant, railway, and privately owned port. It was previously owned by Anglo American and produced 6.1 million tonnes of iron ore^[1] per annum, and was valued by Anglo American at US$ 660 million^[2].

While awaiting credit committee approval, the drafting of the final settlement documents have continued to progress. On the effective date of the Settlement Agreement and under the Judicial Restructuring Plan (“JRP”) Cadence and Indo Sino Trade Pte Ltd (Indo Sino), via their joint venture company, will own 99.9% of DEV Mineração S.A., the owner of the Amapa Project.

Cadence Non-Executive Chairman, Andrew Suckling, commented; “As I have said previously, in my time working with commodity projects around the world, I have rarely if ever seen a lapsed mining project with this sort of potential. Today’s announcement is a landmark for Amapa, both in terms of certainty for DEV employees, the wider Amapa community and for Cadence shareholders. I know how hard the team on the ground there have worked to make this happen, and on behalf of our board I would like to express our thanks and gratitude to DEV, the Government of Amapa, the team of local Government officers and bank committees and administrators for contributing to this momentous step in our history.”

“In its previous life, Amapá’s output contributed significantly to the regional economy. Once again it is set to create new opportunities for the community, and will help to improve prospects in employment, health and education for this region in Brazil as the world emerges from the COVID crisis.”

Cadence CEO, Kiran Morzaria, commented: “After a long and protracted process, I am delighted to be able to announce to you that we have now received Credit Committee Approval for the secured bank creditors to execute the Settlement Agreement. Cadence can then vest its initial 20% and eventually a further 7%, which in practical terms means we have a clear path and process to get Amapárecommissioned, licensed and back into production.”

“On my arrival at Amapá last week, I was deeply impressed by the rapid progress made by the DEV team, with reconstruction of some of the administrative and community infrastructure already well advanced. We look forward to working alongside both DEV and Indo Sino to continue to develop this asset, creating further opportunity and prosperity for the Amapa region, and of course delivering ongoing value for all stakeholders.”

About the Amapa Project

Cadence updated the Mineral Resource Estimate on 2 November 2020. Increasing the MRE by 21%. The current MRE contains an Mineral Resource 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, 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.

Cadence’s investment is conditional on several material preconditions, which include the grant of key operating licences and the release of bank securities over the asset. 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%.

– Ends –

For further information:

Cadence Minerals plc	+44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
Darshan Patel

Novum Securities Limited (Joint Broker)	+44 (0) 207 399 9400
Jon Belliss

Qualified Person

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.

[1] Anglo American, Annual Report 2012, page 89, https://www.angloamerican.com/~/media/Files/A/Anglo-American-Group/PLC/investors/annual-reporting/2013/annual-report2012.pdf

[2] Anglo American, Annual Report 2012, page 183, https://www.angloamerican.com/~/media/Files/A/Anglo-American-Group/PLC/investors/annual-reporting/2013/annual-report2012.pdf

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Tag Archives: DEV Mineração S.A.

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Cadence Minerals #KDNC – Execution of Settlement Agreement and Vesting of Initial US$2.5m for 20% of the Amapa Iron Ore Project

Cadence Minerals #KDNC -Port Concession Update, Amapa Project

Cadence Minerals #KDNC – Bank Credit Committee Approval for Amapa Project Settlement Agreement

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