REG - Cadence Minerals PLC - Strategic Development and Financing

Cadence MineralsAnnouncement

30/10/2023 07:15

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RNS Number : 5810R  Cadence Minerals PLC  30 October 2023

Cadence Minerals Plc

 

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

 

Strategic Development and Financing MOU Signed for the Amapa Iron Ore Project

 

Increase in Cadence Amapa Project Equity Stake

 

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that our
joint venture company Pedra and Branca Alliance ("PBA") and DEV Mineração
S.A. ("DEV") have entered into a memorandum of understanding ("MOU") with
Sinoma Tianjin Cement Industry Design & Research Institute Co., Ltd. a
wholly owned subsidiary of Sinoma International Engineering Co., Ltd.
("TCIDR"). Through its wholly owned subsidiary, DEV, PBA owns and operates the
Amapa Iron Ore Project in Brazil ("Amapá Project").

 

The MOU is the result of our ongoing discussions between the parties to
progress the development of the Amapá Project jointly.

 

Development Programme

Under the MOU, TCIDR will provide a final proposal to complete the Definitive
Feasibility Study ("DFS"), and on completion of a successful DFS, will submit
a fixed price Engineering Procurement and Construction ("EPC") contract for
the Amapá Project. The DFS, EPC contact and any other services provided by
TCIDR are subject to both the services being provided on a competitive basis
and to PBA's and DEV's commercial evaluation and approval. TCIDR will be
appointed the General EPC contractor for the Amapá Project once these
approvals have been granted and the provision of TCIDR-facilitated project
financing is secured. This will require the execution of legally binding
documents.

 

Project Financing

Under the MOU, TCIDR will use its best commercial efforts to secure the
required financing for the construction and re-development of the Amapá
Project, including the necessary guarantees, project finance insurance and
debt financing. In this regard, TCIDR is in discussion with SinoSure China
Export & Credit Insurance Corporation and China Development Bank.

 

PBA, DEV and TCIDR will now develop a roadmap to seek to secure the financing
for the DFS and subsequent project financing for the Amapá Project, and a
fixed price EPC contract between DEV and TCIDR that will have the project
finance, export credit insurance and credit support by TCIDR.

 

Cadence Increase in Ownership in the Amapá Project

Up to the end of September 2023, Cadence's total investment in the Amapá
Project stood at approximately US$12.1 million; as a result, Cadence's equity
stake in the project has increased to 32.6%.

 

Cadence Chairman Andrew Suckling commented: "This Cadence Minerals management
team, of which I am proud to be part, have worked tirelessly with PBA and DEV,
local Government and contractors to bring Amapá to this point. Investments of
this nature are rarely straightforward, but our management and shareholders
are now starting to see a tangible return from bringing this large and complex
infrastructure back to life. Along with Kiran, I have witnessed firsthand the
rejuvenating effect the recommissioning process has had on the region and
community, and now, with this MOU, there is a real sense that we can
re-develop this project back to its name plate capacity.

 

Cadence CEO Kiran Morzaria added: "From a strategic standpoint, for Cadence
and PBA, the MOU with TCIDR represents a potential one-stop shop solution,
coupling our requirements for final project funding with engineering,
construction and technical expertise. Following this, our next steps will be
the completion of the remaining optimisation studies followed by the DFS."

 

"Our investment to date has resulted in an increased shareholding, which now
stands at 32.6%, and I am both pleased and proud that having first submitted a
judicial restructuring plan to creditors in 2019, we are now making rapid
progress. I and my colleagues look forward to the completion and
recommissioning of this substantial project."

 

About the Amapá Iron Ore Project

The Amapá Project is a brownfield integrated iron ore project in the Amapá
State of Brazil. It has Mineral Resources of 276 million tonnes (Mt) at 38.33%
Iron (Fe) and Ore Reserves of 196 Mt at 39.34%. The project consists of the
mine, processing plant, wholly owned port and a 194km railway, all of which
will be operated by DEV. A Pre-Feasibility Study ("PFS") was published in
January 2023. The PFS delivered a Post-tax Net Present Value of US$949 million
("M") at a discount rate of 10% and a post-tax Internal Rate of Return of 34%,
with an average annual life of mine EBITDA of US$235 M annually. After
ramp-up, the planned yearly average production will be 5.7 million wet metric
tonnes per annum ("Mtpa") of Fe concentrate, consisting of 4.7 Mtpa at 65.4%
Fe and 1 Mtpa at 62% Fe concentrate.

 

About Sinoma Tianjin Cement Industry Design & Research Institute Co., Ltd

TCIDR is a wholly owned subsiduairy of SINOMA International Engineering Co.,
Ltd. ("SINOMA International") is the technology and engineering platform under
the Fortune Global 500 Group - China National Building Material Group Co.,
Ltd. It is also the world's leading service provider for cement technology,
equipment and engineering system integration, a high-tech and technological
innovation demonstration enterprise of China, as well as one of the "Going
Global" benchmarking enterprises recognized by the State-owned Assets
Supervision and Administration Commission of the State Council.

 

In 2001, SINOMA International was established by integrating the quality
assets of China's cement technology, equipment and engineering business. In
2005, it was listed on the Shanghai Stock Exchange (600970 SH). Through
technology import, assimilation, and independent innovation, the company has
developed and built a series of production lines starting from China's first
production line with a daily output of 1,000 tons to the world's largest
production line with a daily output of 14,000 tons.

 

Over the past 20 years, SINOMA International has positioned itself as an
"innovative, international and value-oriented" company, SINOMA International
has so far won contracts for nearly 300 cement productions lines in more than
80 countries .

 

 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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