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Cadence Minerals #KDNC – Licensing & Construction Timeline for Amapa Iron Ore Project
Cadence CEO Kiran Morzaria talks to Mark Fairbairn at Stockbox and covers the latest update re the timelines for obtaining essential licenses for the Amapa iron ore project in Brazil. Kiran explains how the timelines have been significantly shortened 12 to 16 months, a marked improvement from the typical 36-month process. Following the installation license approval, the project’s construction is expected to span 12 to 18 months, potentially allowing production to resume within approximately two and a half to three years.
Cadence Minerals #KDNC – Amapá Iron Ore Project Update
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to provide a progress update for its flagship Amapá Iron Ore Project (“Amapá Project”), including an expedited operational licensing and re-rating of our tailings storage facility.
Highlights:
· The expected licensing timeline for the mine, railway and port at the Amapá Project team has been shortened to12 to 16 months compared to a typical timeline of up to 36 months.
· The revised timeline is expected to result in the grant of mine Installation Licenses (“LI”) over the wholly owned port, railway, beneficiation plant and mine during the course of 2024, followed by an operational license (“LO”) after construction is completed.
· The Amapá Tailing Project (“TSF”) is approaching the lowest operational risk rating to date as a result of maintenance, reporting, drilling, and compliance work carried out since 2019
· Following the management team’s recent visit to Amapá, CEO Kiran Morzaria will present the most recent developments at a Shares Magazine investor evening on Wednesday, 13 September.
· Executive Summary of Pre-Feasibility Study Released and available here
CEO Kiran Morzaria commented: “We are delighted with the progress we saw first-hand in our recent visit to Amapá. Agreeing a shortened route to the operational licence is key to getting the Amapá Project back into production in the shortest time possible.”
“I look forward to presenting the latest developments at the upcoming Shares Magazine investor evening and reporting to the markets with further progress after that.”
Licensing Update
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 obtain this permit, the Amapá Project must obtain an LI and, when constructed, an Operational License LO from the Amapá State Environmental Agency.
Before the suspension of mining, the Project had numerous LOs across the mining, rail, and port operations. These LOs expired between 2013 and 2018. In 2022, 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 Projectrequested that the requirement for a full environmental impact study be waived. This request for a waiver was on the basis that the previous LOs were granted on an operation that is substantially the same as is currently planned and remains applicable to future operations.
As a result of the discussions between the various state authorities and the Amapá Project, we are pleased to announce that Amapá Project will be able to shorten the licensing timeline substantially. We have agreed with 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, on the port, we will need to complete a full environmental assessment, but given that the Amapá Project has already begun some of the background studies, we also anticipate that the timeline for the grant of the port LI will be shortened.
The fieldwork for the LI’s 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 second quarter of 2024. The Amapá State Environmental Agency will then review the application for the LI’s, 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, while the Amapá Project could achieve this in 12 to 16 months.
Tailings Storage Facility
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 TS. Nonetheless, given the lack of reporting and maintenance from 2014 onwards, the TSF at the Amapá Project was considered a 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.
Shares Magazine Investor Evening
CEO Kiran Morzaria will present at the Shares and AJ Bell ‘LIVE’ investor evening in London on 13 September 2023.
The presentation will contain information about the Company’s flagship Amapa Iron Ore Project in Brazil following a recent visit by the management team.
The Shares and AJ Bell Media, investor evening event is an opportunity for senior board directors to make a presentation about their company and update existing and potential investors on their business plans.
Investors will have the chance to discover investment opportunities and get to know the companies better by asking questions ‘live’ in person after the presentation over drinks and buffet food.
Shareholders and potential investors can register to join us LIVE at the Novotel, Tower Hill, for free via this link:
https://www.sharesmagazine.co.uk/events/event/shares-investor-evening-london-live-event-130923
Pre-Feasibility Executive Summary
As part of the ongoing engagement with potential investors, we have also released an executive summary of the previously announced PFS, which is available here.
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For further information contact:
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Cadence Minerals plc |
+44 (0) 20 3582 6636 |
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Andrew Suckling |
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Kiran Morzaria |
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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
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James Joyce |
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Darshan Patel |
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Brand Communications |
+44 (0) 7976 431608 |
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Public & Investor Relations |
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Alan Green
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Qualified Person
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.
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 – Sonora Lithium Investment Update
Cadence holds an interest in the Sonora Lithium Project via a 30% stake in the joint venture interests in each of MexilitS.A. de CV (“Mexilit”) and Minera 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 has been developing the Project, consisting of an open pit mine and lithium chemical product processing facility in Sonora, Mexico. The principal planned lithium product for the Project is lithium hydroxide.
As previously announced by Cadence. 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 prior to the enactment of the Mining Law Reform.
This is consistent with the terms of the Constitution of Mexico, which, among other principles and rights, recognizes 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. As of now, no agreement has been reached among the Company, Ganfeng and the Mexican Government concerning this potential collaboration.
As the operator of the Project, including the concessions held by Mexilit and Megalit, Ganfeng’s ability to develop the Project is based on a series of concessions granted in accordance with Mexican law and held by three controlled subsidiaries of the Ganfeng incorporated in Mexico (the “Mexican Subsidiaries”).
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. The Mexican Government did not raise any objections until it recently notified Mexican Subsidiaries that the minimum investment obligations were allegedly not met, and it took action to cancel the lithium concessions.
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 the Company’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.
Impact on the Company
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.
Cadence’s investment into the Sonora Lithium project is circa £3.89 million. The total value of Cadence’s portfolio of assets is circa £41.15 million, including £28.01 million attributed to our 30% stake in the Amapa Iron Ore project.
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 on a regular basis and ensure within the limits of the join venture agreement that the matter is given the utmost attention and that regulatory requirements are fulfilled in a timely manner.
Cadence CEO Kiran Morzaria commented: “While on the face of it, this development further delays the prospect of a return from the Mexalit and Megalit concessions for Cadence shareholders, it is important to remember that any opportunity to grow value at Sonora would only start to accrue once mining commences in the concessions owned by Mexilit, which is nine years into the mine life. In the board’s opinion, substantially more value is to be had from our 30% stake in the Amapa Iron Ore Project once it is brought back into production.”
“I look forward to reporting on further progress at Amapa.”
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For further information contact:
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Cadence Minerals plc |
+44 (0) 20 3582 6636 |
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Andrew Suckling |
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Kiran Morzaria |
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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
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James Joyce |
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Darshan Patel |
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Brand Communications |
+44 (0) 7976 431608 |
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Public & Investor Relations |
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Alan Green
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Qualified Person
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.
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 – Annual Results year ended 31 December 2022
Cadence Minerals (AIM/NEX: KDNC) is pleased to announce its final results for the year ending 31 December 2022. The full Annual Report and Audited Financial Statements will be available on the Company’s website at https://www.cadenceminerals.com/ and posted to shareholders by 30 June 2023.
CHAIRMAN’S STATEMENT
I am pleased to present the Company’s Annual Report and Audited Financial Statements for the year ended 31 December 2022.
The global macroeconomic outlook continues to be unpredictable and difficult to navigate. The expected recovery and bounce back from pandemic-era conditions have largely been tempered by fast-rising interest rate and inflation forecasts. Coupled with an increasing focus on China’s status as an adversary rather than just a competitor, the global outlook remains mixed and confusing. Over a year has passed, and the Ukraine invasion has now become an entrenched war, with many of the initial supply disruptions looking set to become semi-permanent dislocations. The Cadence Minerals portfolio is both balanced, diversified and constructed to anticipate supply and demand shocks. As such it should be well placed to weather this ongoing uncertainty.
Although the above suggests caution and a degree of pessimism, there are actual positives emerging. Recent economic forecasts suggest continued stimulus and support for infrastructure projects globally. Inflation, by some metrics, may have peaked, and the transformation to an EV world is gaining even more momentum. Recent merger and acquisition activity suggests an increasing awareness among multinational companies to integrate critical and strategic materials into their respective portfolios.
Market observers will be aware of an increase in the number of potential nationalisations across specific strategic industries and the resources sector. The net result is of course a greater focus on the resource sector, particularly while major resource companies continue to ramp up capital allocation into the EV material space to meet the sea change in demand for raw materials.
On behalf of the Board of Directors (Board) and management, I thank all our advisors, consultants, service providers, and especially our shareholders for their support throughout the year. The Board and company have continued site visits, viewed potential investment opportunities, and attended many industry conferences.
I am always reminded never to approach a marathon by counting every inch; it is a very hard way to keep and maintain perspective. Investing in the resource space really is a marathon versus a sprint. In every area, it continues to surprise how long permitting, licenses approvals, environmental studies, and raising capital can take.
Many times, the Board has stated “we will look for opportunities to unlock and discover value across our portfolio.” I am particularly grateful that our patience has been rewarded with the continued success and maturing of many of our portfolio companies. The successful listing on the ASX of Evergreen Lithium is a good case in point and the Board sends its congratulations to all who made that listing possible.
The Board sees further potential within our private and public holdings for further listings and potential transactional activity to bolster Company returns. In the wake of such a challenging year, we send our congratulations and support to our portfolio companies for their continued success. As the Cadence investment portfolio continues to mature, we will continue our search for new, accretive investments with the same methodology and rigorous diligence as before in order to assure a continued supply of diversified growth opportunities.
We have a clear path ahead for our flagship Iron Ore investment at Amapa, Brazil. The publication of initial and preliminary studies, and the DEV team’s liaison with federal, state, and local authorities, continues to unlock the potential of this project. The Board thanks our JV partner, lawyers, and consultants for their hard work in negotiations, settlements, and the operational success emanating from this investment.
The challenge of a dislocated economic recovery and the prospect of a slowing Chinese economy, highlighted by the likelihood of steel production at or below one billion tons, has proved to be a continual challenge to the Cadence share price. However, due to the likelihood of support and stimulus coupled with acquisition and investment in the resources sector, (particularly related to the EV transition), we expect the constitution of the Cadence portfolio to remain robust and focussed on the strategic and critical sectors of the economy.
I would like to personally thank my fellow Board members, staff, and partners, all of whom constitute the Cadence Community and, of course, all of our shareholders for their encouragement and continued confidence in the company
Andrew Suckling
Non-Executive Chairman
CHIEF EXECUTIVE OFFICER SUMMARY
I am pleased to present the audited results for the year ended 31 December 2022, along with the Strategic Report that provides a comprehensive review of our business activities during the year. It is important to note that these results reflect the historical position of the Company’s progress and financial standing, and we have included additional information on key post-year-end events in the Strategic Report.
In reviewing the performance of Cadence during the year, it would be fair to say that our two portfolios performed quite differently despite the solid operational performance of the underlying assets and the long-term outlook of the commodities these projects intend to extract. While we delivered excellent operational results and strong investment returns within our private portfolio, our public traded portfolio decreased substantially, despite the underlying assets delivering to their goals.
In our private portfolio, the Amapá iron ore project remained the primary focus for Cadence’s management. In my capacity as a director of the joint venture, Cadence was heavily involved in the operational progress we have seen to date, which cumulated in the delivery of a robust Pre-Feasibility Study (“PFS”), which confirmed the project’s strong economics. To date, our investment has been circa US$9.3 million for 30% of the Amapá iron ore project; the net present value of 100% was estimated in the PFS at US$949 million.
In addition to the progress made at Amapá, the Company increased the investment returns by converting some of its passive private investments into public traded equity. These returns were achieved via two asset sales, firstly our 31.5% interests in Lithium Technology Pty Ltd and Lithium Supplies Pty Ltd (“LT and LS”) were sold to Evergreen Lithium, and secondly, our 30% interest in licenses within the Yangibana Rare Earth Project (“Yangibana Project”) were sold to owner/operator Hastings Technology Metals. These transactions were completed after a year-end, so the financial returns are not reflected in these financial statements. Cadence has invested approximately £1.7 million in these assets, and our sale price into the equity of the two public companies was the equivalent of £7.4 million, representing a 335% cumulative return on our investments.
In contrast to these achievements, the performance of our publicly listed portfolio tracked our largest holding, European Metals Holdings (“EMH”), which was down some 49% over the year despite the excellent progress made in developing the asset. EMH’s price depreciation came off multi-year highs achieved during 2021 and followed the general trend of the AIM basic resource index, which was also down year on year, reflecting the risk-off approach we have seen with investors since mid-Aug 2021.
These negative year-over-year returns contradict the fundamental drivers in our portfolio, namely the incredible growth of the lithium raw material market and the stabilisation of the iron ore market. Therefore, the driver for the lacklustre performance appears to be a weakening in equity funds flow. Investment fund flows were the weakest in eight years as investors turned their backs on UK equity funds in 2022, selling a record £8.38 billion. In summary, Investors have sold UK equity and sought the safest havens, taking refuge in cash and perceived lower-risk investments.
As previously stated, the lithium market has continued to expand rapidly. The global lithium-ion battery manufacturing industry’s expansion to feed the transportation sector’s electrification fuelled this growth. This expansion results from a concerted shift toward decarbonisation and net zero targets set by the private sector and governments worldwide. The IEA predicts that demand for EV batteries will rise from around 340 Gigawatt hours (GWh) today to over 3,500 GWh by 2030, with the industry requiring 50 additional lithium mines by then. These macro drivers should continue to support the fundamentals behind our lithium and rare earth investments.
Within the iron ore market, although we saw a softening in the first of the year, it recovered by the end of 2022, with the 62% Fe Platts closing at circa US$117 per dry metric tonne (“dmt”). Both short and longer-term prospects for iron ore are driven by China, given that the nation is the world’s biggest steel producer and currently buys about 70% of global seaborne iron ore.
In the coming year, we look forward to further developing the Amapa Iron Ore project, progressing the permitting pathway, and, if possible, securing a joint venture partner to co-develop the asset.
With our other investments, we look forward to developments at Evergreen Lithium, which given its proximity to the Finnis project, represents the most prospective investment in our portfolio. Hastings and EMH are well advanced in their development cycle, and we look forward to seeing the construction of the beneficiation plant at Hastings in Q3 of this year and the publication of the EMH Definitive Feasibility Study in Q4 of this year.
As discussed in the Investment Review, Cadence’s ambition is to mitigate the need for external capital by growing and reinvesting the profits from our assets under management. We believe we are on our way to achieving this goal with our investments over the last three years of £8.64 million being funded by £7.77 million of sales in our public portfolio and £0.87 million from equity capital. Excluding the equity funding for our investments over the last three years Cadence has raised a total net funding from external sources of £3.72 million. At the time of writing, the realised profit since inception from the current public portfolio is £5.27 million and a total unrealised and realised gain is 338%.
I want to express my gratitude to the Cadence team and our investee companies, who have all worked tirelessly to bring the Company and its investment to their current position. We believe concentrating risk across a few crucial assets and commodities will pay off.
Kiran Morzaria
Chief Executive Officer
Link here for Investment Review and Financial Statements
Cadence Minerals #KDNC – European Metals Holdings #EMH: Land secured for Cinovec lithium plant
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 Geomet s.r.o (its 49% owned subsidiary) has agreed to purchase land at the industrial site “Dukla” in the Újezdeček Municipality, 6.2 km south of the planned Cinovec Mine portal area, on which it intends to construct a lithium plant, for a total purchase consideration of US$ 43.96m.
Highlights:
- Cinovec Project Company, Geomet s.r.o. secures ownership of Dukla industrial site for construction of the Cinovec lithium plant
- Dukla Plant site will include ore beneficiation plant and battery-grade lithium plant
- Geomet s.r.o., owner of 100% of the Cinovec Project, to become sole owner/user of site
The Dukla site, which is subject to an existing industrial usage permit, is owned by four private companies, with all peripheral and adjacent land relevant to the site held by Czech State and/or local public bodies.
The Cinovec Project holding company, Geomet s.r.o. (Geomet) which is a forty nine percent (49%) owned subsidiary of European Metals, has agreed to acquire one of the privately-held land packages and entered into exclusive and unconditional option agreements for the purchase of the other three. The Dukla site has been confirmed as an appropriate site upon which to build a lithium plant for the beneficiation of Cinovec ore and production of battery-grade lithium in accordance with the Company’s ongoing DFS which is on track to be completed in 4Q23. This confirmation has been obtained as a result of engineering layout and design work undertaken in the DFS to-date, geohydrological and geotechnical surveys over the site, completed in early 2023.
An application to the Usti Regional Department of Land Use Planning for the rezoning of the land around the Dukla site (which is already zoned for industrial use), ore transport corridor options and the Cinovec Mine portal area was made in April 2022. The result of this re-zoning application is expected to be finalised in 4Q23.
The Company intends to exercise its 3 options and settle these land acquisitions after the re-zoning application has been successful, anticipated to occur in 2024.
European Metals Executive Chairman Keith Coughlan commented; “Acquiring this land secures an integral part of the Cinovec Project – the acquisition of the land on which the Lithium Plant is to be built. The close location of Dukla to the mine site is critical to the minimisation of transport costs and ESG impact. The acquired land is zoned for industrial use. With the land now secured, DRA Global can complete the layout designs for the lithium plant which are required as part of the DFS and enables the timeline to completion to be maintained.”
Cadence CEO Kiran Morzaria added; “The Dukla land acquisition marks another major milestone in Cinovec’s evolution into a future battery grade lithium supply hub for Europe and the rest of the world. We look forward to further developments.”
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 6.8% 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 | |
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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
| James Joyce | |
| Darshan Patel
Enzo Aliaj |
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| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green
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Cadence Minerals #KDNC – Corporate Update – Hastings Technology Metals
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement by Hastings Technology Metals (ASX: HAS) (“Hastings”) that it has introduced a staged development strategy to reduce delivery risk and enable faster pathway to cash flow for the Yangibana Rare Earths Project.
Highlights:
- Results of the project capital and delivery model review support a staged development strategy for the Yangibana Rare Earths Project
- This strategy will reduce upfront capital requirements and project execution risks as well as providing a faster pathway to cash flow by Q1 2025
- Initial focus will be on construction of the Yangibana mine and beneficiation plant to produce rare earths concentrate (Stage 1), followed by development of a hydrometallurgical plant to produce mixed rare earth carbonate (Stage 2)
- Total project capital cost is now estimated at $948m, with the Stage 1 component being $470m (a 40% increase to the estimate from 2020/21)
- Fixed price contracting model aims to minimise risk of further capital cost increases, demonstrated by the recent arrangement with GR Engineering for construction of the beneficiation plant
- Beneficiation plant construction to commence in Q3 CY2023, supporting Stage 1 concentrate delivery target date of Q1 CY2025
- Concentrate offtake discussions underway with rare earth oxides producers in Australia and offshore with a view to concluding firm contracts prior to drawdown of project finance debt in early 2024
- Potential for strong Stage 1 financial returns with post-tax NPV11 of $538m, an IRR of 27.54% and average annual EBITDA of $174m providing a funding source for Stage 2.
Link here to view the full Hastings announcement
Hastings Executive Chairman Charles Lew commented: “The Yangibana Rare Earths Project is one of the world’s most advanced greenfield rare earth projects and is well-timed to meet the forecast supply gap for magnet rare earth elements which are required to support the global transition to clean energy. A comprehensive project review undertaken by our new experienced management team has confirmed that this world-class project remains financially and operationally robust, with the investment in a Stage 1 mining and beneficiation plant being a compelling proposition. The implementation of a two-stage development strategy for Yangibana will lower the upfront capital funding requirements, reduce the project execution risk and enable a faster pathway to early project cash flows which can be used to fund Stage 2 plant construction.”
Cadence CEO Kiran Morzaria, commented: “The Cadence board remain enthusiastic shareholders and supporters of Hastings Technology Metals and the Yangibana Rare Earths project. We are pleased to see the project risks further reduced by the introduction of a two stage investment strategy, and we are excited by the prospects for commencement of the beneficiation plant construction within the next few months. I look forward to providing further updates.”
Cadence shareholding in Hastings
On 25 January 2023, Cadence completed the sale of its 30% stake in several mineral concessions forming part of the Yangibana Rare Earths project for a consideration of 2.45 million Hastings shares, equating to approximately 1.9% Hastings issued share capital. This consideration was a premium over the Net Present Value (“NPV”) of the Cadence portion of the mineable material, based on the definitive feasibility (“DFS”) updated by Hastings on 21 February 2022.
The full announcement concerning the Yangibana sale is available here.
| For further information contact:
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| Cadence Minerals plc | +44 (0) 20 3582 6636 |
| Andrew Suckling | |
| Kiran Morzaria | |
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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
| James Joyce | |
| Darshan Patel
Enzo Aliaj |
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| 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 – Amapa Project Update & Loan Financing
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce an update on the Amapá Iron Ore Project (“Amapá”) and the completion of a Mezzanine Loan Facility (“Loan Facility”), which will be applied to the Amapá project.
Highlights
Ø Savings of approximately US$28 million were identified on port refurbishment costs at Amapá.
Ø Cadence has agreed US$ 2 million Loan Facility (“First Tranche”) that has been arranged by Riverfort Global Capital Ltd to be entered into by RiverFort Global Opportunities PCC Ltd and YA II PN, Ltd (the “Investors”). The Loan Facility allows a further US$ 8 million to be drawn down over the next three years, subject to agreement by the Investors.
Ø The net proceeds from Loan Facility will be used to continue the development of the Amapá Project, including optimisation studies on the processing route and environmental licensing.
Ø Continued investment into Amapá Project will increase the Company’s stake to circa 33%.
Ø The term of the Loan Facility is two years, with a 6-month principal repayment holiday. The annual interest rate that Cadence will pay is 9.5%.
Ø The principal and interest of the Loan Facility are payable in cash. However, the Company can elect not to pay any outstanding principle or accrued interest of the Loan Facility in cash, granting the Investors the right to convert these outstanding amounts into ordinary shares.
Amapá Project Port Studies
On 1 March, we announced that a scoping level study had been completed to improve the capital cost associated with the port refurbishment of the Amapá’s wholly owned port. We have now reviewed how these changes can be integrated into the original Pre-Feasibility Study (“PFS”), published in January this year, and have identified that a potential net capital saving to the port refurbishment costs of US$28 million or circa 24% of the direct capital expenditure associated with the port refurbishment.
The savings were derived by moving the current rail loop, which is used for unloading iron ore at the port so that it is one hundred metres further inshore. The change in the location of the railway loop reduces the load on the ground near the shore and negates the installation of a substantial retaining wall. This change in the rail loop will also require a reorientation of the on-shore iron-ore storage and loading system. The net of these two capital items is anticipated to result in a net capital saving of US$28 million. These results will need to be confirmed once the project advances with further geotechnical investigations.
Details of the Mezzanine Loan Facility
The Mezzanine Loan Facility (“Loan Facility”) involves an unconditional and committed initial tranche by the Investors of US$ 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 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.
The application will be made for the 8,251,224 Initial -Issued Shares to be admitted to trading on the AIM market of London Stock Exchange plc and to the AQSE Growth Market operated by Aquis Exchange Plc (“Admission”), and this is expected to become effective on or about 5 June 2023. On Admission, the Pre-Issued Shares will rank pari passu with all existing ordinary Shares in the Company.
Following Admission, the Company will have 180,971,037 Shares in issue, with each Share carrying the right to one vote. There are no Shares currently held in treasury. The total number of voting rights in the Company is, therefore, 180,971,037. This figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.
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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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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
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James Joyce |
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Darshan Patel Enzo Aliaj |
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Brand Communications |
+44 (0) 7976 431608 |
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Public & Investor Relations |
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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 Announcement: Testwork Realises Continued Outstanding Lithium Recoveries
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 achieved favourable testwork results which confirm separation efficiency and capability of flotation of lithium-bearing zinnwaldite.
Highlights:
- Testwork confirms separation efficiency and capability of flotation of lithium- bearing zinnwaldite from the Cinovec Lithium / Tin Project.
- Flotation testwork repeatedly reached >95% lithium recovery to flotation concentrates at target Li-grades and mass yield
- DFS remains on track for completion in Q4 2023
The updated flotation testwork recently undertaken at Nagrom Laboratories (Perth) has repeatedly reached >95% lithium recovery from flotation concentrates at target Li-grades and mass yield. Ongoing testwork to confirm the robust nature of the process and optimise the DFS design has surpassed previous performance indicators.
Results from testing and optimisation of flotation for the concentration of zinnwaldite in fine ore has exceeded expectations and further demonstrated the potential for high overall lithium recoveries when combined with magnetic separation for the coarse particle size ranges.
European Metals Executive Chairman Keith Coughlan commented; “The exceptional lithium extraction results are outstanding and further underline the commercial viability of operations at Cinovec. These results show repeatability of >95% lithium recovery at neutral pH and confirm both capex and opex reductions, demonstrating the strong operational viability of the FECAB plant. We look forward to further results of the ongoing optimisation work as part of the DFS. The neutral pH of the flotation further enhances the already strong ESG credentials of the Cinovec Project particularly when compared to the acid flotation used on micas elsewhere around the globe. We expect the current testwork to be completed by the end of June and will publish the full results.”
Cadence CEO Kiran Morzaria added; “These outstanding lithium recoveries further enhances Cinovec’s already exceptional potential as a future battery grade lithium supply hub for Europe and the rest of the world. We are pleased to remain shareholders and supporters of EMH, and we look forward to further developments.”
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 8.1% 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) 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.