REG - Cadence Minerals PLC - Progress at the Amapá Project & Corporate Update

Cadence MineralsAnnouncement

07/03/2024 07:00

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RNS Number : 9070F  Cadence Minerals PLC  07 March 2024

Cadence Minerals Plc

 

("Cadence Minerals", "Cadence", or "the Company")

 

Progress at the Amapá Iron Ore Project and Corporate Update

 

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to provide an update
on the developments at the Company's flagship Amapá Iron Ore Project in
Brazil ("Amapá Project"), with updates also provided on our other
investments.

 

Highlights:

 

·       Optimisation studies to reduce Amapá plant capital expenditure
are nearing completion.

·       An additional processing flow sheet is being developed to
increase product quality to 67% iron ore concentrate.

·       Operational environmental licensing at the Amapá Project is on
schedule, with the expected grant of the installation licenses over the mine,
wholly owned port, railway, beneficiation plant and mine during 2024.

·       Project financing discussions continue, with expressions of
interest in project equity financing. This is in addition to the current MoU
with TCIDR for the debt financing of the Amapá Project.

 

Cadence CEO Kiran Morzaria commented: "I am delighted to report that the Amapa
project has taken a substantial series of steps forward since we announced the
MoU with TCIDR in October 2023. The Board fully expects to be able to deliver
cost savings once the capital and operating expenditure review is complete,
added to which the engineering team have identified a flowsheet which can
produce a 67% concentrate product instead of the previously proposed 62% and
65% product mix. This will mean an improvement in margins and project
economics, building upon an already robust U$949 million net present value."

 

"As we remain on schedule to secure the installation licences by the end of
this year, we are seeing expressions of interest from potential partners to
invest into the project equity finance element. Once completed, the
recommissioned Amapá mine can restart production."

 

"Your Board have also completed the sale of Hastings Technology Metal shares,
delivering a 30% realised return, which has been immediately reinvested into
Amapá, with the cancellation of our Aquis listing also delivering a further
cost saving. I look forward to reporting on our further investment, our equity
stake and on operational progress at Amapá in the coming weeks."

 

Amapá Project Optimisation Studies

During 2023, our joint venture company Pedra and Branca Alliance ("PBA") made
significant progress in the development of the Amapá Project, including the
publication of a Pre-Feasibility Study ("PFS") on the project with a US$949
million net present value.

 

Late last year, PBA engaged an engineering firm to review the processing plant
flowsheet to reduce capital and operating expenditure and, if possible,
improve the product quality, all of which, if successful, would further
improve the project economics. The Board are pleased to report that the
capital and operating expenditure review is nearing completion, and we
envisage that this review will deliver capital and operating cost savings.

 

In addition, the engineering consultants are developing a flowsheet to
increase product quality to 67% iron ore concentrate. To report this at a PFS
level, PBA will need to send approximately two tonnes of run-of-mine samples
to verify the viability of the proposed flowsheet and to finalise capital and
operating costs, which, on a preliminary basis, do not appear materially
different to those forecast in the PFS.

 

We expect to be able to fully report on the capital savings in the next
quarter, although the improved product quality will take longer given the flow
sheet testing required. If successful, the latter's impact will be
significant, as a 67% product would represent a premium of between US$10 and
US$15 per tonne over our proposed 62% and 65% product mix.

 

Given the above potential improvements and discussions with potential
development partners, we have determined that it is best for the timeline to
incorporate the feasibility study into the project's implementation phase.

 

Amapá Project Licensing Update

In September last year, we announced PBA's timeline for obtaining installation
licences for the construction and rehabilitation of the mine, plant, rail, and
port at the Amapá Project. We are pleased to report that this is on track at
the time of writing, and we expect all the licences to be awarded during 2024.
The grant of installation licenses is a prerequisite for any material
rehabilitation or construction.

 

Amapá Project Equity Financing

In October 2023, the Amapá Project executed a Memorandum of Understanding
("MoU") with Tianjin Cement Industry Design & Research Institute Co., Ltd
("TCIDR") for the debt financing of the project. PBA is now focusing on equity
project financing, has received expressions of interest, and continues to
advance these. The Board will report further as these discussions progress.

 

Amapás Development of Joint Venture Iron Ore Mineral Resources on the Tucano
Gold Mine

In addition to the Amapá Project's current inventory of 276.24 million tonnes
of measured, indicated and inferred mineral resources at 38.33% Fe there is
further 143.5 million tonnes at 36.77% of historical resource on the adjacent
concessions owned by the Tucano Gold Mine. In addition, during the mine's
operation, the previous owners identified four areas within the Tucano Gold
Mines tenement with a mineral potential of around 500 million tonnes of iron
ore.

 

The Amapá Project has a right to explore and mine these areas for iron ore,
which are governed by various joint operating agreements

 

Now that the Tucano Gold Mine plans to restart its operations, we have been in
discussions and have requested the complete set of geological data, including
drill data and assay results, to review the historic mineral resource, with
the target of bringing these mineral resources into the mine plan, extending
the mine and improving the economics.

 

Cadence Interest in the Amapá Project

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

 

Cadence's Interest in Hastings Technology Metals ("Hastings")

On 25 January 2023, Cadence completed the sale of its 30% interest in several
mineral concessions forming part of the Yangibana Rare Earths Project for 2.45
million Hastings shares. At the end of February 2024, Cadence disposed of its
interest in Hastings Technology Metals. The realised return on our original
acquisition of 30% of the mineral concessions is approximately 30% and the
proceeds of the sale have been reinvested into the Amapá project.

 

Notice of Cancellation of Trading on the AQSE Growth Market ('Aquis')

The Company currently has a dual listing on the AIM market of the London Stock
Exchange and the AQSE Growth Market of the Aquis Stock Exchange. The Board has
decided to seek the cancellation of its dual listing on Aquis, in order to
improve operational and financial efficiencies.

 

As the Company will retain its AIM listing on the London Stock Exchange, the
Company is not required to send a circular and seek shareholder approval of a
resolution to cancel in accordance with Rule 5.3 of the AQSE Growth Market
Rule Book.

 

In accordance with the procedures of the AQSE Growth Market, the Board
anticipates that the cancellation will be completed on or around 5 April 2024.

 For further information contact:

 Cadence Minerals plc                                         +44 (0) 20 3582 6636
 Andrew Suckling
 Kiran Morzaria

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

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

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

 

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.

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