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Cadence Minerals #KDNC – Interim Results for the six months ended 30 June 2024
Cadence Minerals plc (AIM/AQX: KDNC) is pleased to announce its interim results for the six months ended 30 June 2024.
Despite the poor commodity and macro backdrop, our primary investment, the Amapá Iron Ore Project, has progressed well. The three targets we set for the year are either completed or scheduled to be completed by year-end.
Highlights for Amapá Project progress made in the period and post-period end include:
- The completion of optimisation studies resulting in a 20% increase of Post-tax Net Present Value (“NPV”) to US$1.14 billion, with profit after tax of US$3.14 billion over the Life of Mine
- A 10% increase in average production after ramp-up to 5.82 million dry metric tonnes per annum (“Mtpa”) of Fe concentrate, consisting of 4.81 Mtpa at 65.4% Fe and 1.01 Mtpa at 62% Fe concentrate.
- A 6% decrease in Free on Board C1 Cash Costs to US$33.5/dry metric tonne.
- The submission of required environmental studies and applications for the grant of the installation licenses at the Amapá Project.
- The completion of the design of a 67% iron ore concentrate flow sheet, with testing of the design currently underway.
The immediate focus of the Amapá Project is financing the next stage of development, a goal to which all the partners are fully dedicated. We believe this should be done via a trade sale or a joint venture with a highly experienced mining operator.
We are actively working towards this goal and are currently discussing with potential joint venture partners. These processes take time with extensive due diligence and contract negotiations, and we know that shareholders want to be informed about the detailed progress; however, for commercial reasons and listing rule requirements, we will only announce once a material contract has been executed.
Our other main investments are in the lithium sector. With lithium prices down some 80% over the last twelve months, we have seen a reduction in lithium equities, with the average producer down some 38% during the current year. As our investments are in either early-stage exploration or development assets, the decrease in equity price was the primary driver of our losses during the period.
Nonetheless, we see positive indications in the lithium market, with market commentators forecasting improvements in 2025 and supply shortfalls in the 2030s. However, it should be noted that we should not expect lithium prices to return to levels seen in 2022 in the short to medium term. Lithium demand is still growing significantly, so prices should improve over the coming year.
Investment Review
As outlined in the section “Our Business and Investment Strategy,” Cadence operates an investment strategy in which we invest in private projects via a private and public equity model. In both investment classes, we take either an active or passive role. We have reported in these segments below.
The Amapá Iron Ore Project, Brazil (“Amapá” or “Project”)
Interest – 33.12% at 31/12/2023 and 34.14% at 30/06/2024
The Amapá Project is a large-scale iron ore mine with associated rail, port, and beneficiation facilities. It began operations in December 2007 but ceased in 2014 due to a geotechnical failure at the port facility, which limited iron ore export. Before closing, the Project made an underlying profit of US$54 million in 2012 and US$120 million in 2011. In 2008, the Project produced 712 thousand tonnes of iron ore concentrate, and production increased to 4.8 million tonnes in 2011 and 6.1 million tonnes in 2012.
Investment
In 2019, Cadence entered into a binding investment agreement to invest in and acquire up to 27% of the Amapá iron ore mine, beneficiation plant, railway, and private port owned by DEV Mineração S.A. (“DEV”). The agreement also gave Cadence a first right of refusal to increase its stake to 49%.
To acquire its 27% interest, Cadence invested US$6 million over two stages in a joint venture company, Pedra and Branca Alliance (“PBA”). This investment was completed in the first quarter of 2022. Since then, Cadence has invested another US$7.29 million for a further 7.14% equity. At the end of the period, Cadence Minerals had invested some US$13.8 million for 34.14% in the Project.
Operations Review
During the reporting period, we continued to develop the Amapá Project. Our main operational goals for this year were to complete our environmental applications, reduce capital expenditure, improve Project economics, and resume testing to produce a high-grade 67% iron ore concentrate.
These targets had been mainly achieved at the time of writing. Subsequently, we reported on capital costs and increased mining during the period, which delivered a 20% increase in the Project’s Net Present Value. We also submitted all the required environmental license applications, which should be granted by the end of 2024.
We have started testing the flow sheet design we developed during the period, which we expect to be completed in the fourth quarter of this year.
Updated Pre Feasibility Study (“PFS”)-level economic study
In March this year, the Amapá Project announced the results of the optimisation study, which delivered material capital savings to the Project. The Amapá Project carried out an updated PFS-level economic analysis based on these results.
Updated Mining Schedule
As part of the optimisation work, engineering consultants identified higher availability at the processing plant, which increased the annual run-of-mine feed rate to the processing plant. As a result, the mining and other related engineering disciplines had to be re-examined, and in particular, the mine schedule had to be recalculated to optimise the Project’s NPV.
As a result, a new life of mine production plan was scheduled. This revised schedule allows for 15 years of production with the current economic values and a cut-off of 25% Fe. The resultant life of the mine strip ratio is approximately 0.4:1 (tonnes waste: tonnes ore), and the average ore mine delivered to the plant is 13 million metric tonnes per annum.
Project Financial Analysis
An updated PFS financial model, which included the updated mining schedule, lower capex, and lower operational costs, was developed to evaluate the Project’s economics. All other aspects of the financial analysis remained the same as per the PFS published in January 2023. Summary results from the economic model outputs are presented in the table below. The financial model considers 100% equity funding for the Project, although the financing of the Project will be a mix of debt and equity. A summary of the key financial information is presented below, alongside the 2023 PFS data.
Table 1.1 Key Project Metrics (100% Project basis)
| Metric | Unit | 2023 PFS Data | 2024 PFS Data |
| Total ore feed to the plant | Mt (dry) | 176.88 | 176.93 |
| Life of Mine | Years | 16 | 15 |
| Fe grade of ore feed to the plant | % | 39.34 | 39.34 |
| Recovery | % | 76.27 | 76.27 |
| 62.0% iron ore concentrate production | Mtpa | 0.89 | 0.95 |
| 65.4% iron ore concentrate production | Mtpa | 4.23 | 4.51 |
| C1 Cash Costs FOB * | US$/DMT | 35.53 | 33.50 |
| C1 Cash Costs CFR ** | US$/DMT | 64.23 | 52.20 |
| Pre-Production capital investment*** | US$M | 399 | 343 |
| Sustaining capital investment over LOM**** | US$M | 245 | 245 |
| Post-tax NPV (10%) | US$M | 949 | 1,145 |
| Post-tax IRR | % | 34 | 42 |
| Project payback | Years | 4 | 4 |
| Total profit after tax (net operating profit) | US$B | 2.96 | 3.14 |
| * | Means operating cash costs, including mining, processing, geology, OHSE, rail, port and site G&A, divided by the tonnes of iron ore concentrate produced. It excludes royalties and is quoted on a FOB basis (excluding shipping to the customer). |
| ** | Means the same as C1 Cash Costs FOB; however, it includes shipping to the customer in China (CFR). |
| *** | Includes direct tax credit rebate over 48 months |
| **** | Includes both sustaining CAPEX and deferred capital expenditure, specifically, improvements to the railway and the installation of conveyor belt and mine site to rail load out |
Project Permitting
As announced in September 2023 (News Release Here), the Amapá Project has agreed with the Amapá State Environmental Agency (“SEMA”) to an expedited environmental licensing process, given that the Project was previously operating and had been granted all required licenses.
The Amapá Project owns the required Mining Concessions; however, it must obtain a Mine Extraction and Processing Permit (“Mining Permit”) to begin operation. To obtain this permit, the Amapá Project must obtain an Installation License (“LI”) to begin construction and, when constructed, an Operational License (“LO”). An LI and LO are also required to build and operate the railway and port.
In April, the Amapá Project submitted the required environmental studies and applications for the Amapá mine and railway. This application was in the form of the Environmental Control Plan, “PCA” (Plano de Controle Ambiental), and an Environmental Control Report, “RCA” (Relatório de Controle Ambiental). This was followed in early September when
The Project submitted the required environmental studies and application for the LI grant for the iron ore port.
Our joint venture has continued engaging with SEMA and other relevant authorities, who have indicated that the LI for the rail and mine remain on schedule for the grant this year. Given the impact that the railway’s restart will make on local communities, the installation license for the railway is anticipated to have some conditions precedent. This is expected in any project of this nature. The Amapá Project management team always anticipated this as part of the required licensing requirements to redevelop the Amapá Iron Ore Project. Our understanding from SEMA is that, based on the current timeline, all the LIs will be granted by the end of 2024.
Secured Bank Settlement Iron Ore Shipments
As per the settlement agreement announced in December 2021 here, the net proceeds of the one shipment carried out in 2022, along with approximately half of the net proceeds from the shipments in 2021, have been used to pay the secured bank creditors.
In early 2024, we reached an in-principle agreement on a one-time settlement amount with the secured creditors and had a financing solution to make this payment. However, we could not crystallise the financing due to a longer-than-expected approval process from the secured creditors and unfavourable iron ore prices. We remain optimistic that as the iron ore price improves, we will be able to secure the funding needed to make this one-time payment.
Development Plan for the Amapá Project
The goal is to bring this Project back into production. Based on the positive results derived from the updated economic assessment at a PFS level, we are now testing the 67% iron ore concentrate product flow sheet. Once the flow sheet is proven to the PFS level, this revised flow sheet will form the basis of an amended economic assessment of the Project.
Alongside this, and based on discussion with SEMA, we expect the grant of the LIs by the end of the year, allowing the commencement of construction and the recommissioning of the Project in 2025. Of course, this will be subject to the Project securing appropriate debt and equity financing.
Cadence, along with its joint venture partner, has agreed that the lowest risk and currently the best commercial approach for our investment in the Project should be either a trade sale or a joint venture with a highly experienced mining operator. We are actively working towards this goal and discussing it with potential joint venture partners. The funding of debt and equity for the recommissioning and construction of the Project is anticipated to occur at the asset or joint venture level.
Private Investments, Passive
Ferro Verde Iron Ore, Brazil
Interest – 1% on 31/12/2023 and 30/06/2024
In 2022, Cadence invested a small amount (£0.21 million) in an advanced iron ore deposit in Brazil the previous year. The Ferro Verde Deposit is in the southern portion of the state of Bahia, in the northeastern region of Brazil, next to the town of Urandi, some 700 km southwest of Salvador, the state of Bahia. The project is currently progressing with its Definitive Feasibility Study (DFS). It has a historic inferred resource of 284 million tonnes of iron ore at 31% Fe. The intent is to produce 4.5 Mtpa of 67% Fe. Our intended exit strategy is either when the asset is listed or the owners carry out a trade sale.
Sonora Lithium Project, Mexico
Interest – 30% on 31/12/2023 and 30/06/2024
Cadence holds an interest in the Sonora Lithium Project through a 30% stake in the joint venture interests in Mexalit S.A. de CV (“Mexalit”) and Megalit S.A. de CV (“Megalit).
In April 2022 and May 2023, the Mexican Government made changes to its Mining Law, which included prohibiting lithium concessions, declaring lithium a strategic sector, and giving a state-owned entity exclusive rights for lithium mining operations. Despite existing concessions, including those held by Mexilit and Megalit, being supposedly unaffected, the General Directorate of Mines (“DGM”) started reviewing nine lithium concessions held by Mexican subsidiaries. Mexilit and Megalit submitted evidence of compliance with minimum investment obligations, but these concessions were still cancelled.
Ganfeng and Cadence believe the cancellations violate Mexican and international law and have filed administrative review recourses. Cadence also issued a Request for Consultations and Negotiations to the Government of Mexico under the United Kingdom-Mexico Bilateral Investment Treaty regarding the revocation of mining concessions for the Sonora Lithium Project.
In their Request, Cadence and REMML have identified various BIT obligations that Mexico has breached, including Mexico’s obligation not to unlawfully expropriate the investments of UK investors such as Cadence and REMML and its obligation to treat such investments fairly and equitably.
In accordance with Article 10 of the BIT, Cadence and REMML have requested consultations and negotiations with Mexico to resolve the dispute amicably. The BIT provides for disputes to be resolved by international arbitration if they cannot be resolved through consultation and negotiation.
The affected concessions include those granted to Mexilit S.A. de CV (“Mexilit”) and Minera Megalit S.A. de CV (“Megalit”), which are joint venture companies in which Cadence holds a 30% stake through REMML.
Public Investments
The public equity investment segment is composed of passive investment. The trading portfolio consists of investments in listed mining entities that the board believes possess attractive underlying assets. The focus is to invest in mining companies that are significantly undervalued by the market and where there is substantial upside potential through exploration success and/or the development of mining projects for commercial production. Ultimately, the aim is to make capital gains in the short to medium term. Investments are considered individually based on various criteria and are typically traded on the TSX, ASX, AIM or LSE.
The movement in public portfolio values during the year is summarised below.
| Commentary | £,000 | |
| Portfolio value on 31 December 2023 | 4,162 | |
| Disposal of public Investments during the year | Disposal of investments held in European Metals & Hastings Technologies | (1,321) |
| Realised and Unrealised loss on portfolio value for the year | Realised and unrealised loss on European Metals & unrealised loss on Evergreen due to decrease in equity price | (1,902) |
| Portfolio value on 30 June 2024 | 939 |
As of 30 June 2024, our public equity stakes consisted of the following:
| 30-Jun-24 | 31-Dec-23 | 30-Jun-23 | 31-Dec-22 | |
| Company | £’000 | £’000 | £’000 | £’000 |
| European Metals Holding Ltd | 359 | 2,339 | 5,207 | 4,882 |
| Evergreen Lithium Ltd | 567 | 1,481 | 2,738 | – |
| Hastings Technology Metals Ltd | – | 321 | 1,570 | – |
| Charger Metals NL | – | – | 187 | 301 |
| Eagle Mountain Mining Ltd | – | – | 20 | 37 |
| Miscellaneous | 13 | 21 | 17 | 24 |
| Total | 939 | 4,162 | 9,740 | 5,244 |
European Metals Holdings Limited (“European Metals”)
Interest – 7.0% at 31/12/2023 and 2.96% on 30/06/2024
European Metals owns 49% of Geomet s.r.o. with 51% owned by České Energetické Závody, a.s. (“CEZ”). Geomet s.r.o. owns 100% of the Cinovec lithium deposit, which hosts a globally significant hard-rock lithium deposit with a total Indicated Mineral Resource of 372.4Mt at 0.45% Li2O and an Inferred Mineral Resource of 323.5Mt at 0.39% Li2O. This is a combined resource of 7.22 million tonnes of lithium carbonate equivalent. The Cinovec lithium deposit contains a Probable Ore Reserve of 34.5Mt at 0.65% Li2O, which covers the first 20 years of mining at an output of 22,500tpa of battery-grade lithium carbonate.22,500tpa of Lithium Carbonate).
The Cinovec lithium project has achieved key milestones, including the successful production of lithium carbonate and lithium hydroxide from the pilot programme – both to battery grade, the granting of extensions to our exploration licenses, and the selection of a significantly superior site for the lithium processing plant. It’s important to note that there have been delays in the definitive feasibility study. However, EMH’s work on important processing enhancements is expected to improve the project’s economics significantly.
Evergreen Lithium Limited (“Evergreen”)
Interest – 8.74% at 31/12/2023 and 8.74% on 30/06/2024
In 2023, Evergreen was listed on the Australian Stock Exchange, and Cadence’s equity stake in Evergreen was reduced to 8.74% from 13.16% due to the IPO and associated fundraising. Further shares in Evergreen are due to Cadence upon achieving certain performance milestones.
Evergreen is the 100% owner of three exploration tenements, including the Bynoe Lithium Project, Fortune Lithium Project, and Kenny Lithium Project. The Bynoe Lithium Project, located contiguous to Core Lithium’s Finnis hard rock lithium project, is considered Evergreen’s flagship prospect, offering significant exploration potential.
During the period Evergreen continued its exploration of the Byone projects, the main highlights included approving the mine management plan, which enabled drilling to commence. This was announced in July 2024, with an auger sampling program drilling short holes over areas identified as high-priority targets. Samples generated from this program will be analysed at an offsite laboratory. Results from this work will be used in conjunction with surface soil sample results to target LCT pegmatites in the future. In addition, RAB/Air Core drilling began, testing geochemical, geophysical and other targets identified in the previous exploration programmes. This drilling programme has intersected shallow pegmatites along strike from Core Lithium’s BP33 deposit. Given the early success of the current air-core drill program, RC drill planning is currently underway. RC drilling will be used to test pegmatites at depth and along strike.
FINANCIAL RESULTS:
During the period, the Group made a loss before taxation of £2.53 million (6 months ended 30 June 2023: £1.95 million, year ended 31 December 2023: £3.02 million). There was a weighted basic loss per share of 1.392p (30 June 2023: 1.163p, 31 December 2023: 1.762p). The total assets of the group decreased from £19.97 million at 31 December 2022 to £17.79 million.
During the period, our net cash outflow from operating activities was £0.32 million, and we raised gross proceeds of £0.47m via the issue of shares and a further £1.33m from the sale of our investments. Most of the capital raised was reinvested (£1.01m), with £0.55m used to pay down existing debt. As a result, our net cash position was reduced from £0.22 million to £0.13 million.
Kiran Morzaria
Director
26 September 2024
| For further information contact:
|
|
| Cadence Minerals plc | +44 (0) 20 3582 6636 |
| Andrew Suckling | |
| Kiran Morzaria | |
| Zeus Capital Limited (NOMAD & Broker) | +44 (0) 20 3829 5000 |
| James Joyce | |
| Darshan Patel
Isaac Hooper |
|
| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
Cautionary and Forward-Looking Statements
Certain statements in this announcement are or may be considered forward-looking. Forward-looking statements are identified by their use of terms and phrases such as “believe”, “could”, “should”, “envisage”, “estimate”, “intend”, “may”, “plan”, “will”, or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the company’s future growth results of operations performance, future capital, and other expenditures (including the amount, nature, and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes actions by governmental authorities, the availability of capital markets reliance on crucial personnel uninsured and underinsured losses and other factors many of which are beyond the control of the company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The company cannot assure investors that results will be consistent with such forward-looking statements.
The company deems the information contained within this announcement to constitute Inside Information as stipulated under the Market Abuse Regulation (E.U.) No. 596/2014, as it forms part of U.K. domestic law under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.
CADENCE MINERALS PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2024
| Notes | Unaudited Period ended 30 June 2024 | Unaudited Period ended 30 June 2023 | Audited Year ended 31 December 2023 | |||
| £’000 | £’000 | £’000 | ||||
| Income | – | |||||
| Unrealised loss on financial investments | (1,126) | (1,319) | (3,101) | |||
| Realised loss on financial investments | (776) | (213) | (2,793) | |||
| (1,902) | (1,532) | (5,894) | ||||
| Share based payments | – | (25) | (25) | |||
| Impairment of intangibles | – | – | (905) | |||
| Loan from subsidiary written off | – | – | 4,810 | |||
| Other administrative expenses | (630) | (768) | (1,302) | |||
| Total administrative expenses | (630) | (793) | 2,578 | |||
| Operating profit/(loss) | (2,532) | (2,325) | (3,316) | |||
| Foreign exchange (losses)/gains | (1) | 407 | 297 | |||
| Finance cost | – | (36) | – | |||
| Loss before taxation | (2,533) | (1,954) | (3,019) | |||
| Taxation | – | – | – | |||
| Loss attributable to the equity holders of the Company | (2,533) | (1,954) | (3,019) | |||
| Total comprehensive loss for the period, attributable to the equity holders of the Company | (2,533) | (1,954) | (3,019) | |||
| Loss per share | ||||||
| Basic (pence per share) | 3 | (1.392) | (1.163) | (1.762) | ||
| Diluted (pence per share) | 3 | n/a | n/a | n/a |
CADENCE MINERALS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2024
| Share capital | Share premium account | Share-based payment reserve | Investment in own shares | Retained earnings | Total equity | |
| £’000 | £’000 | £’000 | £’000 | £’000 | ||
| Balance at 1 January 2023 | 2,144 | 37,612 | 252 | (64) | (18,623) | 21,321 |
| Share based payments | – | – | 25 | – | – | 25 |
| Issue of share capital | 82 | 42 | – | – | 124 | |
| Transactions with owners | 82 | 42 | 25 | – | – | 149 |
| Loss for the period | – | – | – | (1,954) | (1,954) | |
| Total comprehensive loss for the period | – | – | – | (1,954) | (1,954) | |
| Balance at 30 June 2023 (unaudited) | 2,226 | 37,654 | 277 | (64) | (20,577) | 19,516 |
| Transfer on lapse of warrants | – | – | (19) | 19 | 0 | |
| Transactions with owners | – | 0 | (19) | 0 | 19 | 0 |
| Loss for the period | – | – | – | (1,065) | (1,065) | |
| Total comprehensive loss for the period | – | – | – | – | (1,065) | (1,065) |
| Balance at 31 December 2023 | 2,226 | 37,654 | 258 | (64) | (21,623) | 18,451 |
| Issue of share capital | 167 | 333 | – | – | 500 | |
| Costs of share issue | (35) | (35) | ||||
| Transactions with owners | 167 | 298 | 0 | 0 | 0 | 465 |
| Loss for the period | – | – | – | – | (2,533) | (2,533) |
| Total comprehensive loss for the period | – | – | – | – | (2,533) | (2,533) |
| Balance at 30 June 2024 (unaudited) | 2,393 | 37,952 | 258 | (64) | (24,156) | 16,383 |
CADENCE MINERALS PLC
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
| Unaudited | Unaudited | Audited | ||||
| 30 June 2024 | 30 June 2023 | 31 December 2023 | ||||
| Assets | Notes | £’000 | £’000 | £’000 | ||
| Non-current | ||||||
| Financial Assets | 11,857 | 10,530 | 11,660 | |||
| 11,857 | 10,530 | 11,660 | ||||
| Current assets | ||||||
| Trade and other receivables | 3,903 | 3,978 | 3,937 | |||
| Financial Assets | 1,901 | 10,702 | 4,162 | |||
| Cash and cash equivalents | 133 | 577 | 215 | |||
| Total current assets | 5,937 | 15,257 | 8,314 | |||
| Total assets | 17,794 | 25,787 | 19,974 | |||
| EQUITY AND LIABILITIES | ||||||
| Current liabilities | ||||||
| Trade and other payables | 561 | 348 | 288 | |||
| Borrowings | 850 | 565 | 933 | |||
| Total current liabilities | 1,411 | 913 | 1,221 | |||
| Liabilities due after one year | ||||||
| Borrowings | – | 611 | 302 | |||
| Amounts owed to subsidiaries | – | 4,747 | – | |||
| Total liabilities | 1,411 | 6,271 | 1,523 | |||
| Equity | ||||||
| Share capital | 4 | 2,393 | 2,226 | 2,226 | ||
| Share premium | 37,952 | 37,654 | 37,654 | |||
| Share based payment reserve | 258 | 277 | 258 | |||
| Investment in own shares | (64) | (64) | (64) | |||
| Retained earnings | (24,156) | (20,577) | (21,623) | |||
| Total equity attributable | ||||||
| to owners of the company | 16,383 | 19,516 | 18,451 | |||
| Total equity and liabilities | 17,794 | 25,787 | 19,974 | |||
CADENCE MINERALS PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD 30 JUNE 2024
| Unaudited Period ended | Unaudited Period ended | Audited Year ended | ||||
| 30 June 2024 | 30 June 2023 | 31 December 2023 | ||||
| £’000 | £’000 | £’000 | ||||
| Cash flows from operating activities | ||||||
| Operating loss | (2,532) | (2,325) | (3,316) | |||
| Net realised/unrealised loss on financial investments | 1,902 | 1,532 | 5,894 | |||
| Impairment of investments | – | 905 | ||||
| Write off of loan from subsidiary | – | (4,810) | ||||
| Equity settled share-based payments | – | 25 | 25 | |||
| (Increase)/decrease in trade and other receivables | 34 | (21) | 20 | |||
| Increase/(decrease) in trade and other payables | 273 | 31 | (29) | |||
| Net cash outflow from operating activities | (323) | (758) | (1,311) | |||
| Taxation | – | – | – | |||
| Cash flows from investing activities | ||||||
| Receipts on sale of current investments | 1,321 | 935 | 2,150 | |||
| Payments for non-current financial investments | (1,001) | (975) | (2,088) | |||
| Net cash inflow from investing activities | 320 | (40) | 62 | |||
| Cash flows from financing activities | ||||||
| Proceeds from issue of share capital | 500 | 124 | – | |||
| Share issue costs | (35) | – | – | |||
| Borrowings | – | 1,187 | 1,400 | |||
| Loan repayments | (557) | – | – | |||
| Finance cost | – | (12) | – | |||
| Net cash (outflow)/inflow from financing activities | (92) | 1,299 | 1,400 | |||
| Net increase/(decrease) in cash and cash equivalents | (95) | 501 | 151 | |||
| Foreign exchange movements on cash and cash equivalents | 13 | (34) | (46) | |||
| Cash and cash equivalents at beginning of period | 215 | 110 | 110 | |||
| Cash and cash equivalents at end of period | 133 | 577 | 215 |
Material non-cash transactions
There were no material non-cash transactions in the period to 30 June 2024.
During the period to 30 June 2023 the Company acquired 2,452,650 shares in Hastings Technology Metals Ltd from its wholly owned subsidiary Mojito Resources, at a cost of AUD$ 9m (£5.152m). This amount was not paid in cash but treated as a intercompany loan from Mojito Resources. This has been treated as a non-current liability.
NOTES TO THE INTERIM REPORT
FOR THE PERIOD ENDED 30 JUNE 2024
1 BASIS OF PREPARATION
The interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention. The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group’s statutory financial statements for the year ended 31 December 2023 have been delivered to the Registrar of Companies. The auditor’s report on those financial statements was unqualified.
The principal accounting policies of the Group are consistent with those detailed in the 31 December 2023 financial statements, which are prepared under the historical cost convention and in accordance with UK adopted International Accounting Standards (IAS).
GOING CONCERN
The Directors have prepared cash flow forecasts for the period ending 30 September 2025. The forecasts demonstrate that the Group has sufficient funds to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the accounts have been prepared on a going concern basis.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results
2 SEGMENTAL REPORTING
The Company operates a single primary activity to invest in businesses so as to generate a return for the shareholders.
3 EARNINGS PER SHARE
The calculation of the earnings per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.
| Unaudited | Unaudited | Audited | |||
| six months ended | six months ended | year ended | |||
| 30 June 2024 | 30 June 2023 | 31 December 2023 | |||
| £’000 | £’000 | £’000 | |||
| Profit/(loss) on ordinary activities after tax (£’000) | (2,533) | (1,954) | (3,019) | ||
| Weighted average number of shares for calculating basic profit/loss per share | 188,388,620 | 174,360,940 | 177,693,153 | ||
| Less: shares held by the Employee Benefit Trust (weighted average) | (6,380,000) | (6,380,000) | (6,380,000) | ||
| Weighted average number of shares for calculating basic (loss)/profit per share | 182,008,620 | 167,980,940 | 171,313,153 | ||
| Share options and warrants exercisable | n/a | n/a | n/a | ||
| Weighted average number of shares for calculating diluted profit per share | n/a | n/a | n/a | ||
| Basic profit/(loss) per share (pence) | (1.392) | (1.163) | (1.762) | ||
| Diluted profit per share (pence) | n/a | n/a | n/a |
4 FINANCIAL INVESTMENTS
| Financial assets at fair value through profit or loss: | |||||||
| £’000 | £’000 | £’000 | £’000 | ||||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Fair value at 31 December 2022 | 5,244 | – | 12,327 | 17,571 | |||
| Additions | 5,152 | – | 2,048 | 7,200 | |||
| Transfers on listings | 1,810 | – | (1,810) | – | |||
| Fair value changes | (3,101) | – | – | (3,101) | |||
| Impairment of assets | – | – | (905) | (905) | |||
| Loss on disposals | (2,793) | – | – | (2,793) | |||
| Disposal | (2,150) | – | – | (2,150) | |||
| Fair value at 31 December 2023 | 4,162 | – | 11,660 | 15,822 | |||
| Additions | – | – | 1,159 | 1,159 | |||
| Fair value changes | (1,126) | – | – | (1,126) | |||
| (Loss)/Gains on disposals | (776) | – | – | (776) | |||
| Disposal | (1,321) | – | – | (1,321) | |||
| Fair value at 30 June 2024 | 939 | – | 12,819 | 13,758 | |||
| Losses on investments held at fair value through profit or loss | |||||||
| Fair value loss on investments | (1,319) | – | – | (1,319) | |||
| Realised loss on disposal of investments | (213) | – | – | (213) | |||
| Net loss on investments held at fair value through profit or loss | (1,532) | – | – | (1,532) | |||
| Non-current | – | – | 10,530 | 10,530 | |||
| Current | 9,740 | – | 962 | 10,702 | |||
| 9,740 | – | 11,492 | 21,232 |
5 SHARE CAPITAL
| Unaudited | Unaudited | Audited | |||
| 30 June 2024 | 30 June 2023 | 31 December 2023 | |||
| £’000 | £’000 | £’000 | |||
| Allotted, issued and fully paid | |||||
| 173,619,050 deferred shares of 0.24p (30 June and 31 December 2023: 173,619,050) | 417 | 417 | 417 | ||
| 197,637,704 ordinary shares of 1p (30 June 2023 and 31 December 2023 180,971,037 ordinary shares of 1p) | 1,976 | 1,809 | 1,809 | ||
| 2,393 | 2,226 | 2,226 |
6 LOANS
BORROWINGS
During the year ended 31 December 2023, the Company entered into a Mezzanine Loan Facility to finance its investment in the Amapá Project.
The Mezzanine Loan Facility (“Loan Facility”) involves an unconditional and committed initial tranche by the Investors of US$ 2 million and a further conditional Loan Facility amount of US$ 8 million, subject to agreement by the Investors. The Loan Facility is valid for three years.
The First Tranche of US$ 2 million, drawn down in 2023, has a 24-month term (“Maturity Date”). It has a six month principal repayment holiday, followed by 18 equal monthly cash repayments thereafter to the maturity Date. The Loan Facility has an effective annual interest rate of 9.5% and has a 5% implementation on the value of the First Tranche.
If the Company elects not to settle a monthly payment in cash (each being a “Missed Payment”), they will automatically grant a right for the Missed Payment to be settled in shares as per the non-cash repayment terms contained in the Loan Facility Agreement (“Non-Cash Repayment”). Following a Non-Cash Repayment, the Investors will be automatically granted conversion rights over such principal and interest balances due concerning the Missed Payment. The Investors will then have the right for 12 months to convert such amounts either at a price equal to 12.7 pence (representing a 30% premium to the closing price on 25/05/2023) or at a 7% discount to the average of the five daily VWAPs chosen by the Investors in the 20 trading days preceding its conversion notice or at the price the Company issues further equity if lower than the existing conversion price.
Cadence has provided a security package to the Investors as part of the Loan Facility. This package includes a floating charge over the Company’s investments, placing its holding in European Metals Holdings into escrow and the issue of new ordinary shares to the Investors (“Initial Issued Shares”). The Initial Issued Shares represent 50% of the value of the First Tranche, or 8,251,224 new ordinary shares. These initial Issued Shares will be used as part of any Non-Cash Repayments if applicable. On the Maturity Date, the Company can utilise the Initial Issued Shares to pursue its investment strategy or for working capital purposes. If it has settled all amounts in cash and these Initial Issued Shares revert to the Company.
As part of the Loan Facility, the Company has agreed to grant 8,251,224 warrants to subscribe for ordinary shares in the Company at an exercise price of 13.2 pence (representing roughly a 35% per cent premium to the current share price of the Company’s Shares) with a 48-month term.
During the period to 30 June 2024 £557,000 ($698,000) of capital and interest was repaid in cash. During the year ended 31 December 2023, £1,622,000 ($2,000,000) less costs was drawn down. £124,000 ($153,000) was repaid through the issue of the Initial Issued Shares. The borrowing costs (and resulting fx) have been capitalised under IAS23, as the sole purpose of the loan was to finance the Amapá Project.
Cadence Minerals #KDNC – European Metals Holdings- Cinovec Lithium Project Update
Cadence Minerals (AIM: KDNC) is pleased to note the announcement by European Metals Holdings Limited (ASX & AIM: EMH) (“European Metals” or the “Company regarding the Cinovec Lithium Project (Cinovec). EMH advises that the timeline for the completion of the Definitive Feasibility Study (“DFS“) and therefore construction of the Cinovec lithium processing plant continue to be worked on.
Given the change to the location of the lithium processing plant from Dukla to Prunéřov, additional geotechnical work is currently underway to confirm the optimal construction method and layout at the new site. Results from this geotechnical work are expected to be available at the end of September. DRA Global is then expected to provide a detailed timeline and begin the DFS finalisation program of work.
EMH will provide a further update to the market once it has received a revised timeline for completion of the DFS.
The Project team continues to progress several DFS-related programs on the Front-End Comminution and Beneficiation circuit (“FECAB“) and Lithium Chemical Plant circuit (“LCP“) to improve the overall flowsheet which are expected to positively impact Project economics.
Process Flowsheet Improvements – FECAB
EMH previously announced changes to the FECAB process flowsheet from beneficiation based entirely on magnetic separation to a process incorporating both magnetic separation and flotation. This improvement yielded a total FECAB lithium recovery of >87%, with 7-8% lost to the fines fraction and the balance of 5-6% losses due to process inefficiency. By mass, the proportion of the ore recovered to concentrate achieved was 30% of the total feed and the grade of the concentrate entering the LCP was 1.198% lithium (2.58% Li2O).
To improve FECAB performance, targeting a higher-grade concentrate, additional flotation testwork has been carried out. Representative ore samples were utilised, milled to P80<150μm and tested without removing the <20μm slimes fraction before flotation.
Results, benefits and impacts of this testwork are:
· Potential for complete elimination of the magnetic separation step from the FECAB flowsheet;
· Flotation process without desliming has been successfully optimised, which improves the recovery of zinnwaldite from the <20μm fraction whilst not impacting reagent consumption or other process beneficiation performance factors;
· A capability to deliver overall FECAB lithium recovery improvements from >87% to >94.7%, proven on a repeated basis;
· Uplift in concentrate grade from 1.198% Li (2.58% Li2O) to produce almost pure zinnwaldite concentrate with average grade of 1.46% Li (3.14% Li2O);
· The grades of concentrate produced in the flotation testwork are the highest to date, based on the recoveries achieved and mass rejection (of gangue) of 80% on average;
· The flotation testwork program was carried out at neutral pH and there was no need for chemical addition to adjust pH;
· The above results are from repeated locked cycle testwork;
· The locked cycle testwork achieved optimisation of recirculation in the flotation circuit, such that the final circuit contained only a single recirculation stream;
· The improved lithium grade and purity of concentrate recovered are expected to significantly impact both the operating costs per tonne (“Opex/t”) of battery-grade end-product as well as the capital expenditure per tonne (“Capex/t”) for the LCP;
· The results of this recent testwork have translated into impacts on the DFS which include re-sizing of kilns for roasting the concentrate and reagent and energy consumption reductions for the same overall process outputs, with the intensive magnetic separation plant Capex/t and Opex/t eliminated;
· Expected economic improvements include a reduction in roasting reagents (gypsum, limestone and sodium sulphate) required for the same output;
· The purity of the flotation concentrate achieved further supports production of exceptionally clean battery-grade end products for Cinovec;
· A flotation-only process simplifies the FECAB operationally (in addition to reducing Capex/t and Opex/t);
· The measured Particle Size Distribution (“PSD”) of the flotation concentrate is close to the ideal PSD for kiln feed. As a result, the need for a concentrate regrind mill currently in the process flowsheet is being re-assessed.
The flotation testwork has yielded excellent results and the Project team is now considering the full ramifications in bulk materials handling, tailings storage and backfilling, should a positive decision be made to change the FECAB process flowsheet to 100% flotation beneficiation. EMH will provide an update when a decision has been made.
Process Flowsheet Improvements – Lithium Chemical Plant
The principal roasting reagents mixed with lithium-bearing ore (zinnwaldite) concentrate, as stated above, are gypsum, limestone and sodium sulphate. The LCP process produces a waste stream of mixed sulphate, including sodium sulphate, potassium sulphate, rubidium sulphate, with a residual component of lithium sulphate derived from lithium which is not converted into lithium phosphate during its first pass through the lithium phosphate reactor tank.
EMH has recently managed locked cycle tests that demonstrate the effects of replacing sodium sulphate roasting reagent entirely with the mixed sulphate waste stream, targeting reduced overall reagent consumption.
Nine locked cycles were performed with fully-representative zinnwaldite concentrate roasted in each test. This testwork was undertaken at Nagrom Laboratories in Perth, WA.
These tests have been successful, with the overall lithium recovery in the LCP circuit remaining in the previously announced range of 88-93%.
The recycling of this mixed sulphate waste stream is a key component of the patent pending for the Cinovec LCP process.
The benefits and impacts of this optimisation testwork of the LCP circuit are:
· Elimination of sodium sulphate as a roasting reagent, reducing Opex/t for the project;
· Lithium not recovered in its first pass through the lithium phosphate reactor tank circuit is reprocessed, enabling higher overall lithium recovery. Modelling, based on the results of cycles 5 and 6 of the 2022 Locked Cycle Test program assuming fresh, pure (>98%) sodium sulphate addition upfront, estimates the amount of lithium lost to the mixed sulphate waste stream as 1.2%. This is now available for recovery in the revised LCP circuit design; and
· Reduction in the overall mixed sulphate waste stream required to be onwards-treated has been achieved, further reducing Opex/t of the end-product.
The updated LCP circuit design with recycling of mixed sulphate into the roast mix results in recycling of approximately 50% of the total mixed sulphate produced. The remaining mixed sulphate will be reprocessed as waste.
Land Acquisition at Dukla Transport Hub
Geomet s.r.o., the Cinovec Project holding company, has acquired the land and buildings of the disused Lesní Brana railway station, proximate to the proposed Dukla transport hub. This site is expected to be cleared and used for the control room for rail operations in and out of the Dukla transport hub, which will handle run-of-mine crushed ore (<70mm) onto trains for transport to the Prunéřov lithium processing plant site and, in the reverse direction, handle backfill material to then be transported by conveyor to the mine portal area for use as mine backfill.
The DFS continues to work towards optimising and maximising the planned mine production and ore transfer by rail to the change of Cinovec processing plant site away from Dukla to Prunéřov. This has enabled the Project team to review maximising the mine outputs and ore transfer by rail utilising only a small proportion of the area available at Dukla and not disturbing existing industrial users at Dukla. This optimisation is not expected to result in an increase in the rail fleet as reagent deliveries are no longer required at the Dukla site.
Just Transition Fund
Representatives of Geomet met with the Regional Standing Conference (“RSK”), in the Czech Republic which is one of the bodies that approves and recommends Just Transition Fund (“JTF“) support,
Geomet has submitted an initial application for funding of a part of the project (called a “sub-project”), which initially included the preliminary mine portal area works – a box-cut (mine entrance), an exploration adit, work on a portal access road. These construction works are able to take place under the existing exploration licenses and not requiring an Environmental Impact Assessment (“EIA”). The total initial grant requested from the JTF has in turn been reduced from CZK 1.12 billion to CZK 0.8 billion (approximately EUR 31 million).
The RSK meeting has recommended the sub-project for JTF support. The next step will be the final funding approval by the Ministry of Environment.
Link here to view the full EMH announcement
Cinovec Lithium/Tin Project
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li2O and 0.08% Sn, Indicated Mineral Resource of 360.2Mt at 0.44% Li2O and 0.05% Sn and an Inferred Mineral Resource of 294.7Mt at 0.39% Li2O and 0.05% Sn containing a combined 7.39 million tonnes Lithium Carbonate Equivalent and 335.1kt of tin.
Cadence Minerals holds approximately 2.52% per cent of the equity in European Metals Holdings.
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For further information contact:
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Cadence Minerals plc |
+44 (0) 20 3582 6636 |
|
Andrew Suckling |
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Kiran Morzaria |
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Zeus Capital Limited (NOMAD & Broker) |
+44 (0) 20 3829 5000 |
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James Joyce |
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Darshan Patel Isaac Hooper |
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Fortified Securities – Joint Broker |
+44 (0) 20 3411 7773 |
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Guy Wheatley |
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Brand Communications |
+44 (0) 7976 431608 |
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Public & Investor Relations |
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Alan Green |
Cadence Minerals #KDNC – European Metals Holdings #EMH – Successful production of lithium hydroxide at Cinovec
Cadence Minerals (AIM: KDNC; OTC: KDNCY) is pleased to note the announcement by European Metals Holdings Limited (“European Metals” or “EMH”) (ASX & AIM: EMH, OTCQX: EMHXY, ERPNF and EMHLF) in regard to the Cinovec Lithium Project (“Cinovec” or the “Project”).
EMH has announced the successful production of lithium hydroxide monohydrate from pregnant leach solution manufactured during the recent larger scale Cinovec pilot programme.
Highlights:
- The pilot programme has confirmed viability of the Lithium Chemical Plant (“LCP”) process flowsheet for the industrial scale production of either lithium carbonate or lithium hydroxide.
- Crude lithium carbonate from the pilot programme has been converted into exceptionally clean battery-grade lithium hydroxide monohydrate at laboratory scale.
- The pilot programme processed ore is fully-representative in all respects of the run-of-mine for the first seven years of mining planned at Cinovec, including average grade and expected rock-type mix from the bulk mining.
The Cinovec LCP flowsheet produces a high purity lithium sulphate solution which is capable of being used to produce either lithium carbonate or lithium hydroxide. The first stage (un-reprocessed) crude lithium carbonate produced is very close to battery grade and easily upgraded to battery grade in a single bicarbonation step (see the Company’s ASX/ AIM announcement of 9 November 2023 “Successful Battery-Grade pilot programme for Cinovec Lithium Project”).
The Cinovec LCP flowsheet lends itself to producing battery-grade lithium hydroxide monohydrate either directly, or indirectly via re-processing the first stage crude lithium carbonate. The project team has assessed the relative industrial process risks of manufacturing battery-grade lithium hydroxide monohydrate using both methods. It was concluded the indirect method was regarded as the lower-risk method, when considering process risks and costs.
This method of production of lithium hydroxide monohydrate has been tested as part of the pilot programme and has successfully produced battery-grade lithium hydroxide monohydrate at a laboratory scale.
Link here to view the full EMH announcement
EMH Executive Chairman, Keith Coughlan commented: We are extremely pleased with the results from the lithium hydroxide test program. The lithium hydroxide produced was of the highest grade possible and exceptionally clean. This, when combined with the ability to produce either battery grade lithium carbonate or hydroxide enables a wider range of offtakers for the Cinovec product.”
Cadence CEO Kiran Morzaria added: “The Cadence management team are delighted to see EMH achieve another milestone step at Cinovec. In producing this high grade lithium hydroxide, the EMH team have opened up new offtake opportunities for the end product.”
Cinovec Lithium/Tin Project
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li2O and 0.08% Sn, Indicated Mineral Resource of 360.2Mt at 0.44% Li2O and 0.05% Sn and an Inferred Mineral Resource of 294.7Mt at 0.39% Li2O and 0.05% Sn containing a combined 7.39 million tonnes Lithium Carbonate Equivalent and 335.1kt of tin.
Cadence Minerals holds approximately 3.2% per cent of the equity in European Metals Holdings.
| For further information contact:
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| Cadence Minerals plc | +44 (0) 20 3582 6636 |
| Andrew Suckling | |
| Kiran Morzaria | |
| WH Ireland Limited (NOMAD & Broker) | +44 (0) 20 7220 1666 |
| James Joyce | |
| Darshan Patel | |
| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
Cadence Minerals #KDNC – European Metals Holdings #EMH – Cinovec Project Update
Cadence Minerals (AIM: KDNC; OTC: KDNCY) is pleased to note the announcement by European Metals Holdings Limited (“European Metals” or “EMH”) (ASX & AIM: EMH, OTCQX: EMHXY, ERPNF and EMHLF) in regard to the Cinovec Lithium Project (“Cinovec” or the “Project”).
Geomet (“Geomet”), 49% owned by European Metals and the owner of 100% of the Cinovec Project in the Czech Republic, is in the process of completing the Project Definitive Feasibility Study (“DFS”). DRA Global Limited (“DRA”) was appointed to complete the DFS in February 2023.
EMH has previously advised in the announcement to the market on 22 December 2023 that the delivery of the DFS for the Project had been pushed back and was expected to be completed in Q1 2024.
As a result of the engineering work and social and environmental engagement work subsequently performed as part of the DFS process, several material matters have been highlighted that may significantly improve the lithium processing component of the DFS.
The Geomet management team, in conjunction with DRA, is reviewing these matters. The Company expects to make a further announcement before the end of April 2024 detailing some of the more significant issues. Further, the Company reiterates that the process flowsheet remains as announced on 31 October 2022 and confirmed in pilot testing results announced on 9 November 2023. This review process could significantly improve the economic and social/community outcomes. Geomet considers this to be an important development in the Project and makes a further delay in the DFS well justified.
Importantly, as previously reported, the Company does not expect that the extension of the study period will impact the overall Project timeline, with the permitting process expected to be effectively coordinated pursuant to the enactment of the European Union’s Critical Raw Materials Act.
In other matters concerning the DFS Process, EMH is pleased to announce that previously published physical and hydrometallurgical process flowsheets have been confirmed to be viable for engineering and construction purposes with high levels of lithium recovery from run-of-mine ore to battery-grade end-products.
As previously noted, engineering test work programmes continue to improve process outcomes in various stages of both the physical and hydrometallurgical processing, and current test work programmes include:
- Gangue removal from zinnwaldite concentrate to enable a higher-grade roast mix to be processed by the rotary kilns, thus maximising the throughput of lithium units in the roasting without an increase in the size of the plant;
- recycling and regeneration of reagents in both the roasting and hydrometallurgical stages to reduce the consumption of fresh reagents and decrease opex per tonne of end-product, and
- simplification of precipitation/crystallisation processes to reduce energy and water costs, aiming at producing end-products with the lowest economic carbon footprint.
Executive Chairman, Keith Coughlan, commented on the update: “Whilst it is unfortunate not to be able to provide a fully completed DFS at this stage, I am confident that the developments currently being finalised will add significantly to the Project. In particular, permitting and timelines are expected to be positively impacted by the team’s additional work. The Cinovec Project remains an important part of the drive to improve critical materials security in the EU.”
Link here to view the full EMH announcement
Cinovec Lithium/Tin Project
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li2O and 0.08% Sn, Indicated Mineral Resource of 360.2Mt at 0.44% Li2O and 0.05% Sn and an Inferred Mineral Resource of 294.7Mt at 0.39% Li2O and 0.05% Sn containing a combined 7.39 million tonnes Lithium Carbonate Equivalent and 335.1kt of tin.
Cadence Minerals holds approximately 4.9% percent of the equity in European Metals Holdings.
| For further information contact:
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| Cadence Minerals plc | +44 (0) 20 3582 6636 |
| Andrew Suckling | |
| Kiran Morzaria | |
| WH Ireland Limited (NOMAD & Broker) | +44 (0) 20 7220 1666 |
| James Joyce | |
| Darshan Patel | |
| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
Cadence Minerals #KDNC – European Metals Holdings #EMH – Extension Granted to all Cinovec Exploration Licenses
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement by European Metals Holdings Limited (ASX & AIM: EMH, OTCQX: EMHXY, ERPNF and EMHLF) in regard to the granting of an extension to all four Cinovec Exploration Licences (“the licences”). These licenses fully cover all three granted Preliminary Mining Permits (“PMP’s”) comprising the Cinovec Project. All four licences have been extended until 31 December 2026. The granting of this extension follows a comprehensive evaluation by the relevant state authorities of results achieved to date in exploring the deposit. Plans for future exploration work, including further resource drilling, and compliance with conditions set by the Czech Ministry of Environment were also assessed.
The extension was necessary as the granted PMP’s, whilst conveying the sole and exclusive rights to apply for a Final Mining Permit, do not allow for further drilling until the final mining area is granted. As the Company plans to conduct further metallurgical and measured resource drilling, an extension to the exploration licenses due to expire in December 2023 was sought.
The licences extension applies to the Exploration Areas Cínovec, Cínovec II, Cínovec III and Cínovec IV, which fully cover the East, South and NorthWest PMP’s.
Link here to view the full EMH announcement
Cinovec Lithium/Tin Project
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li2O and 0.08% Sn, Indicated Mineral Resource of 360.2Mt at 0.44% Li2O and 0.05% Sn and an Inferred Mineral Resource of 294.7Mt at 0.39% Li2O and 0.05% Sn containing a combined 7.39 million tonnes Lithium Carbonate Equivalent and 335.1kt of tin.
Cadence Minerals holds approximately 5.6% percent of the equity in European Metals Holdings.
| For further information contact:
|
|
| Cadence Minerals plc | +44 (0) 20 3582 6636 |
| Andrew Suckling | |
| Kiran Morzaria | |
| WH Ireland Limited (NOMAD & Broker) | +44 (0) 20 7220 1666 |
| James Joyce | |
| Darshan Patel | |
| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
Quoted Micro 25 December 2023
AQUIS STOCK EXCHANGE
Good Life Plus (GDLF) completed its reversal into Semper Fortis Esports. There was £1.4m raised at 2p/share. The share price improved 11.1% to 2.5p. The business has been trading for just over two years and it offers members daily prize draws. There are more than 21,000 active members and monthly recurring revenues are £210,000. The company is currently loss-making, partly due to investment in marketing, although the increasing scale means gross profit is improving. The cash will fund further investment in marketing. Sportingbet founder Mark Blandford is one of the new investors.
Kondor AI (KNDR) joined the Access segment of Aquis on 21 September having raised £1.5m at 3p/share and by the end of the week the share price was 8.25p. There was £400,500 raised in November. Kondor AI intends to develop artificial intelligence products in areas such as health diagnostics, search and text recognition. A beta demonstration product is being tested.
Secured Property Developments (SPD) has appointed Paul Ryan as executive director and Noel Lyons as non-exec and they have acquired £150,000 worth of shares at 26.11p each. The existing directors resigned. It appears likely that the focus may change to technology and cleantech. Peterhouse has become corporate adviser. The changes sparked a 60% rise in the share price to 20p.
Incanthera (INC) has secured a commercial deal with a subsidiary of health and beauty company AS Watson for the launch of the Skin + CELL skincare range. This should generate significant revenues in 2024. The plan is to roll out the brand to 1,000 stores in Europe, followed by Asia. Manufacturing has been subcontracted. To fund this, £800,000 was raised at 7p/share and £200,000 of debt owed to the University of Bradford was converted into shares. There was net debt of £199,0090 at the end of September 2023.
Vanadium flow batteries developer Invintiy Energy Systems (IES) says full year revenues will be at least £21.6m, which is below forecast, and the EBIDA loss will be higher than expected at £22m. That means net cash will be around £1m. Forecast revenues for 2024 have been downgraded and the loss raised. This is based on exiting projects. Canaccord Genuity believes that there will be a cash injection from a strategic partner, which will offset the cash outflow in 2024.
Valereum (VLRM) has renegotiated the acquisition of the GSX Group, which is dependent on the approval of shareholders. It is paying five million shares and 10 million warrants exercisable at 1p each. The deal includes GATENet DFMI intellectual property, which puts the group in a strong position in tokenisation. The GATE token will the sole token used. As part of the deal former AIM boss Simon Brickles will become a non-executive director. GSX chief executive Nick Cowan will take up that role in the group.
Coinsilium Group (COIN) says a recovery in cryptocurrency markets is having a positive effect on the company. The expected approval of the first spot Bitcoin ETF should create more opportunities.
Aquaculture technology developer OTAQ (OTAQ) had a strong second half and full year revenues will be £4.4m, which is higher than expected. Oil and gas demand has improved. There was positive EBITDA in the second half. There are opportunities in Geotracking for next year.
Wishbone Gold (WSBN) is exercising the option over the Crescent East lithium and gold project in Western Australia. In return, 18.6 million shares worth around £400,000. Gold mineralisation has been confirmed and there is potential for lithium in the southern area.
Personalised medicine company EDX Medical (EDX) had £1.1m in the bank at the end of September 2023. There was £1.5m outflow from operating activities in the six months to September 2023.
Mydecine Innovations Group Inc (MYIG) is the largest faller on the week with a 70.6% decline to 2.5p, even though it has received notice of allowance from the US patent office for the MYCO-005 compound. It mimics psilocin but without some of the side effects.
ChallengerX (CXS) has moved from net assets of £282,000 to net liabilities of £33,000 at the end of June 2023.
Rogue Baron (SHNJ) has raised £50,000 at 0.35p/share. The spirits company is still performing due diligence on the acquisition of a vodka brand.
Marula Mining (MARU) says dual listings on the Nairobi Stock Exchange and JSE should happen in the first quarter of 2024. Indicative terms have been received indicative terms for an offtake agreement with a European commodity trader for the lithium output of Blesberg lithium and tantalum mine. Transportation of the modular processing plant for the Kinusi copper mine will not happen until early 2024.
Cadence Minerals (KDNC) investee company European Metals Holdings (EMH) says that the definitive feasibility study for the Cinovec lithium project in the Czech Republic has been delayed until the first quarter of 2024. This will allow time to complete capital and operating cost estimation and project implementation scheduling.
SulNOx Group (SNOX) says that its Ghana-based distributor has purchased 3,700 litres of SulNOxEco fuel additive and committed to a minimum of 15,000 litres each year, which is valued at £250,000. SulNOx has raised £1.8m at 23p/share. The share price is down 1.92% to 25.5p.
Walls and Futures REIT (WAFR) had an NAV of 87p/share at the end of September 2023. Property values increased by £60,000.
Capital for Colleagues (CFCP) is involved in a £1.5m fundraising for Rapid Retail, which supplies portable shops and kiosks, and it is investing £100,000 in existing shares and providing a 9% secured convertible loan of £400,000. The rest of the cash is coming from Harrock Investments, which is controlled by Capital for Colleagues non-executive Bill Ainscough.
Trading in Pharma C Investments (PCIL) will resume on 27 December This follows the recent publication of annual results and interim figures. There has been £281,000 raised at 0.01p/share. These shares are 91% of the enlarged share capital. Peter Wall will be executive chairman. The investment strategy has been changed to technology.
Gunsynd (GUN) NAV fell from £3.85m to £2.15m in the year to July 2023, including cash of £164,000.
Oberon Investments (OBE) has received FCA approval for the acquisition of Nexus Investment Management and the Nexus Investments Evergreen EIS Scale-Up Fund. Harry Hyman has increased his stake from 3.82% to 4.98%.
Macaulay Capital (MCAP) is making a £125,000 loan to a subsidiary of investee company Vale Foods. This loan earns 10%/year and provides cash to finance an increase in capacity. Macaulay Capital director David Horner is personally lending £100,000.
Cooks Coffee Company (COOK) is buying back shareholdings of less than 1,125 shares.
Adnams (ADB) director Sacha Berendji acquired 300 A shares at £19 each.
Jared Gurfein has been appointed as chief executive of Looking Glass Labs (NFTX), replacing Dorian Banks.
AIM
Trading has not gone to plan at Hargreaves Services (LON: HSP) but it is able to offer an enhanced dividend pay out. Reduced commodity prices and a slowdown in the German economy have hit the performance of German associate company HRMS, which is expected to make a first half loss. The flipside of the HRMS underperformance is that working capital is unwinding and cash generation has strengthened. Hargreaves Servies has received £8m from HRMS and the two sides have agreed that an annual distribution of £7m can be sustained. This enables Hargreaves Services to pay an annual dividend of 36p/share, compared with previous expectations of 21.9p/share. This will be paid in two equal instalments. The 2024-25 dividend is expected to be maintained.
Filtronic (FTC) has gained two new contracts. There is a £4.8m contract for LEO satellite communications equipment. This is a follow-on contract for second generation Cerus32 solid state power amplifier modules for ground stations. This shows the increasing importance of the satellite market. Filtronic also won a £4.5m defence contract starting in January. Revenues will be recognised in 2024-25 and 2025-26. Interim results will be published on 6 February.
Video games publisher tinyBuild (TBLD) has secured the cash it requires for working capital. The fundraising includes a one-for-six open offer and should raise $14.2m at 5p/share, which is above the current share price. Interactive entertainment company Atari is investing $2m. Chief executive Alex Nichiporchik will underwrite up to $10m of the fundraising. The video games market continues to deteriorate. Full year revenues are likely to be between $40m and $50m with a greater than expected proportion of lower margin games. Cost cutting should reduce cash outflow by up to $10m/year.
Microsaic Systems (MSYS) is negotiating the acquisition of some of the assets of Modern Warter from DeepVerge (DVRG), which is running out of cash, for £100,000. The assets include water testing equipment plus IP and rights to related equipment. It does not include the Australian business. Intercompany debt will be discharged as part of the deal. The exclusivity period lasts until 16 January. Trading in DeepVerge shares will be cancelled on 27 December.
Bidstack (BIDS) has sorted out its problem with Azerion. The in-game advertising technology provider has reached a settlement that means that Azerion will pay €3m to Bidstack. The two parties will form a new non-exclusive commercial partnership in 2024.
Helium One (HE1) announced a placing raising £6.1m at 0.25p/share. This will fund the drilling of the Itumbula West-A well starting in early January. There will also be 25.1 million shares issued in lieu of fees.
SRT Marine Systems (SRT) is raising £10m at 35p/share with up to £500,000 more to come from a retail offer. This includes a £7m investment by Ocean Infinity. There were no revenues from systems in the first half, but they should make a significant contribution as work on contracts reaches points where it can be invoiced. Earlier this year, SRT raised £5.36m from a placing and Primary Bid offer at 50p/share.
Graphene technology developer Versarien (VRS) has found it difficult to complete the disposal of non-core assets. In the year to September 2023, revenues were £5.45m and cash fell to £600,000. There was £450,000 raised since then, but cash has fallen to £420,000. A general meeting will be held to gain shareholder approval for a reduction in share capital and nominal value to make it easier to raise money from share issues.
Bluejay Mining (JAY) has appointed Roderick McIllree, Harry Ansell and Troy Whitaker to the board with the latter becoming chief operating officer. Robert Edwards, Bo Stensgaard and Peter Waugh have stepped down from the board. Roderick McIllree was previously chief executive between 2015 and 2022. The strategy is to focus on the Disko magmatic massive sulphide project in Greenland.
Thor Energy (THR) investee company EnviroCopper has reached agreement with Andromeda Metals to acquire the Alford West property and combine it with Alford East in return for a 5% stake in EnviroCopper and A$50,000 in cash with deferred consideration of a 10% share of any successful mining operations. There will also be a A$150,000 cash payment when a mining lease is granted. Alligator Energy is making a A$900,000 strategic investment in EnviroCopper to help fund its copper projects. That will give it a 7.8% interest and further investments could take the stake to 50.1%. Thor Energy’s stake has been diluted to 26.5%.
MAIN MARKET
A dual listing on the New York Stock Exchange was supposed to give Diversified Energy Company (DEC) a boost, but the share price slumped after Democrats in the US opened an inquiry into the company and questioned its business model. They are concerned about The US oil and gas producer’s methane emissions and abandonment risk.
Bowen Fintech (BWN) plans to acquire 93.49% of the share capital of MINNADEOOYASAN-HANBAI Co (MOH) and the enlarged business is expected to be valued at £42.7m. Japan-based MOH is a crowdfunding platform focused on property. It has been operating since 2007 and raised Y62bn (£378m) during the year to March 2023. Bowen Financial is issuing shares at 15p each and that will value MOH at £34.5m. The share price was suspended at 12p until a prospectus is issued. In October 2022, £2m was raised at 4p/share. At the end of April 2023, there was £1.7m in the bank.
IT services provider Triad (TRD) reported a dip in interim revenues and a more than doubled loss of £990,000. This was worse than expected. Cash has fallen to £2.62m. The interim dividend is maintained at 2p/share. Four new contracts have been won. This should improve the second half figures and next year’s results. Deputy executive chairman Charlotte Rigg has bought 4,444 shares at 135p each.
Andrew Hore
Cadence Minerals #KDNC – European Metals Holdings #EMH Cinovec DFS to be Completed in Q1 2024
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement by European Metals Holdings Limited (ASX & AIM: EMH, OTCQX: EMHXY, ERPNF and EMHLF) that the delivery of the Definitive Feasibility Study (“DFS”) for the Cinovec Lithium Project in the Czech Republic (“Cinovec” or the “Project”) is now scheduled for Q1 2024. Following detailed analysis, approval has been granted to a formal request from Geomet and the Project study team of DRA Global (Lithium Processing DFS) and Bara Consulting (Mining DFS) for a timetable extension to complete capital and operating cost estimation and project implementation scheduling.
The finalisation of the capital and operating cost estimate is reliant on the timely submission of proposals by numerous external suppliers and contractors. The process of obtaining sufficient and diverse proposals is nearing completion. However, the Project study team has advised that receipt and detailed evaluation of such proposals is going to take longer than originally scheduled.
The process flowsheet remains as announced on 31 October 2022 and confirmed in pilot testing results announced on 9 November 2023. However, further development of specific areas relating to engineering, commercial and strategic elements across mining, processing, procurement and logistics are expected to have a considerable impact on both capital and operating cost estimates and Geomet’s social licence to operate.
Both Geomet and the Company recognise the importance of ensuring accurate and comprehensive engineering and cost data for the DFS, as it forms the foundation of the study’s findings and recommendations. In this regard, the Company believes it is prudent to allow the necessary time to complete the study to the highest standard to ensure the delivery of a robust, accurate DFS that conveys the full economic and resource potential of the Project. The Company does not expect that the extension of the study period will impact the overall project timeline, with the permitting process already well underway.
The ongoing process of offtake and strategic partnering continues to reflect strategic interest in the Project as one of the very few advanced stage, large-scale lithium projects in the European Union.
The Project is underpinned by its Mineral Resource, which hosts nearly 7.4 million tonnes of contained lithium carbonate equivalent (“LCE”) as announced on 13 October 2021 “Resource Upgrade at Cinovec Lithium Project to 708MT including 53.3MT of New Measured Resource”.
The Company will continue to provide regular updates on any significant developments during the completion of the DFS. The Company and Project remain well-funded and the Board remains confident of the Project’s capacity to create sustainable value for our shareholders.
Link here to view the full EMH announcement
Cinovec Lithium/Tin Project
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li2O and 0.08% Sn, Indicated Mineral Resource of 360.2Mt at 0.44% Li2O and 0.05% Sn and an Inferred Mineral Resource of 294.7Mt at 0.39% Li2O and 0.05% Sn containing a combined 7.39 million tonnes Lithium Carbonate Equivalent and 335.1kt of tin.
Cadence Minerals holds approximately 5.3% percent of the equity in European Metals Holdings.
|
For further information contact:
|
|
| Cadence Minerals plc | +44 (0) 20 3582 6636 |
| Andrew Suckling | |
| Kiran Morzaria | |
| WH Ireland Limited (NOMAD & Broker) | +44 (0) 20 7220 1666 |
| James Joyce | |
| Darshan Patel | |
| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
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 information contained within this announcement is deemed by the company to constitute Inside Information as stipulated under the Market Abuse Regulation (E.U.) No. 596/2014, as it forms part of U.K. domestic law under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.
Cadence Minerals #KDNC – European Metals Holdings #EMH Announces Successful Battery-Grade pilot programme for Cinovec Lithium Project
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement by European Metals Holdings Limited (ASX & AIM: EMH, OTCQX: EMHXY, ERPNF and EMHLF) detailing the results of the Lithium Chemical Plant (LCP) pilot programme at Cinovec. The results confirm the robustness of the LCP process flowsheet and provide a strong foundation for the execution of the Cinovec Project.
Highlights
- Pilot programme has confirmed industrial viability of the LCP process flowsheet.
- Exceptionally clean battery grade lithium carbonate (>99.9%) produced with single-stage purification (bicarbonation) of crude lithium carbonate.
- Pilot programme crude lithium carbonate confirmed at 99.7% purity, greater than battery grade (99.5%) in the carbonate precipitation step without any additional processing.
- Work to produce battery grade lithium hydroxide monohydrate is underway.
- The pilot programme processed ore fully-representative in all respects of the run-of-mine for the first seven years of mining planned at Cinovec, including average grade and expected rock-type mix from the bulk mining.
Next Stage of Development of Cinovec
The DFS for battery-grade Lithium Carbonate remains on-track for completion in 4Q 2023. Subject to confirmation of the pilot programme work for battery grade Lithium Hydroxide, a decision on the battery grade end-product (carbonate vs hydroxide) for the Cinovec Project is expected to be made in early 2024. This will in turn lead to design engineering that will enable the Project to move to production in the shortest possible time frame, and includes engagement with long lead equipment OEMs to ensure that the timeline is expedited.
European Metals Executive Chairman Keith Coughlan said: “The confirmation of the exceptionally clean nature of the Cinovec Lithium Carbonate resulting from the pilot programme is further proof of the tremendous importance of the Cinovec Lithium Project for the whole of the EU. The Lithium Carbonate produced by the simplified flowsheet has the ability to be a major contributor to the EU’s lithium security. The Cinovec Project is well positioned to be a major supplier of battery grade lithium products to the strategically important European car industry to ensure that they are able to compete on the global stage. The pilot programme data is now being used to confirm design and engineering for the ongoing Definitive Feasibility Study (DFS) being completed by DRA Global and which remains on-track for completion in the current quarter, and also for the post-DFS detailed design. European Metals, in developing the Cinovec Lithium Project, is well positioned for the rising demand in battery materials in the EU. The Cinovec project is the largest hard rock lithium project in the EU and Europe as a whole and is centrally located on the Czech Republic’s border with Germany.”
Link here to view the full EMH announcement
Cinovec Lithium/Tin Project
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li2O and 0.08% Sn, Indicated Mineral Resource of 360.2Mt at 0.44% Li2O and 0.05% Sn and an Inferred Mineral Resource of 294.7Mt at 0.39% Li2O and 0.05% Sn containing a combined 7.39 million tonnes Lithium Carbonate Equivalent and 335.1kt of tin.
Cadence Minerals holds approximately 5.6% percent of the equity in European Metals Holdings.
| For further information contact:
|
|
| Cadence Minerals plc | +44 (0) 20 3582 6636 |
| Andrew Suckling | |
| Kiran Morzaria | |
| WH Ireland Limited (NOMAD & Broker) | +44 (0) 20 7220 1666 |
| James Joyce | |
| Darshan Patel | |
| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
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 information contained within this announcement is deemed by the company to constitute Inside Information as stipulated under the Market Abuse Regulation (E.U.) No. 596/2014, as it forms part of U.K. domestic law under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.
Cadence Minerals #KDNC – Interim Results for the Six Months Ended 30 June 2023
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 – Corporate Update – European Metals Holdings #EMH: EBRD Strategic Investment
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement by European Metals Holdings Limited (ASX & AIM: EMH, OTCQX: EMHXY, ERPNF and EMHLF) that it has entered into a strategic investment agreement with The European Bank for Reconstruction and Development (“EBRD”) under which EBRD has agreed to invest €6 million to support the Company’s development of the Cinovec Project in the Czech Republic.
As part of the due diligence process, EBRD engaged an independent, international mining consultancy to undertake a technical review of the Cinovec Project. EBRD also performed a review of the Cinovec Project in respect to compliance with EBRD’sEnvironmental and Social Policy.
Highlights:
- EBRD has agreed to invest €6 million to support the Company’s development of the Cinovec Project in the Czech Republic.
- ERBD’s investment and expertise will be beneficial to the Company as the Cinovec Project moves through permitting, project financing, and completing its Definitive Feasibility Study (DFS).
- As part of its due diligence, EBRD engaged an independent, international mining consultancy to conduct a technical review of the Cinovec Project.
- EBRD is an International Financial Institution owned by the European Union, European Investment Bank and 71 countries, including the Czech Republic.
- The investment is to be implemented by way of a private placement of 12,315,213 shares of the Company to be issued to EBRD at a price of £0.423 per share. This equates to AUD 0.803 per share
European Metals Executive Chairman Keith Coughlan commented; “The Company welcomes EBRD’s strategic investment, which is a strong endorsement of the Cinovec Project’s value and its commitment to the highest environmental and social standards. The EBRD investment aims to fund the project’s predevelopment work and opens a pathway to potentially securing project financing. The successful completion of the technical due diligence process is a testament to the quality of the Cinovec team, the work which has been done to date and a strong vote of confidence in the project. The EBRD investment is confirmation that the Cinovec Project is a vital part of establishing a strong, sustainable European electric vehicle battery supply chain to support Europe’s accelerating transition to e-mobility.”
Natalia Lacorzana, Head of Natural Resources at EBRD said: “We are pleased to support the Cinovec project, the first lithium project financed by the Bank, on its path to become a responsibly mined source of battery grade lithium for Europe. EBRD is committed to supporting the global transition to a green economy, the move towards wider adoption of electric vehicles, in particular, via providing necessary funding and know-how to junior miners of critical and/or strategic raw materials.
Link here to view the full EMH announcement
Cinovec Lithium/Tin Project
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li2O and 0.08% Sn, Indicated Mineral Resource of 360.2Mt at 0.44% Li2O and 0.05% Sn and an Inferred Mineral Resource of 294.7Mt at 0.39% Li2O and 0.05% Sn containing a combined 7.39 million tonnes Lithium Carbonate Equivalent and 335.1kt of tin.
Cadence Minerals holds approximately 6.5% percent of the equity in European Metals Holdings.
| For further information contact:
|
|
| 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
Enzo Aliaj |
|
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green
|
Qualified Person
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.
Cautionary and Forward-Looking Statements
Certain statements in this announcement are or may be 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 as stipulated under the Market Abuse Regulation (E.U.) No. 596/2014, as it forms part of U.K. domestic law under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.