REG - Cadence Minerals PLC - Amapá Project Licensing on Schedule

Cadence MineralsAnnouncement

17/09/2024 07:00

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RNS Number : 4152E  Cadence Minerals PLC  17 September 2024

Cadence Minerals Plc

 

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

 

Amapá Iron Ore Project Licensing on Schedule. Project Financing Discussions
Advancing.

 

Cadence Minerals (AIM: KDNC) is pleased to report the progress of the
environmental licensing and the testing of the 67% 'Green Iron' processing
flow sheet at the Amapá Iron Ore Project.

 

Highlights:

·       Installation Licences for the Amapá mine and railway remain on
schedule to be granted this year.

·       The license application for the port was submitted in September
and is also scheduled for a grant this year.

·       The test work for sixty-seven per cent (67%) iron flow sheet is
due for completion in the fourth quarter of this year.

·       The Project is actively discussing the equity portion of
project financing to complement the existing debt financing MOU.

 

Kiran Morzaria, the CEO of Cadence, commented, "It's great to see the
continued progress at Amapá. The Project has consistently delivered all the
required environmental studies and applications either on time or ahead of
schedule. Based on the positive feedback from the local government, we
understand that all necessary permits will be granted before the year's end.
Additionally, we are actively advancing the development of a 67% "green iron"
product and securing equity financing for the Project."

 

Licensing

As announced in September 2023 (News Release Here
(https://irs.nbtrader.co.uk/ir/cadence/newsArticle.php?ST=REM&id=311428232448661110)
), the Amapá Project has agreed with the Amapá State Environmental Agency
("SEMA") to an expedited environmental licensing process, given 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 construct and
operate the railway and port.

 

In April 2023, 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).

 

In early September, the Amapá Project submitted the required environmental
studies and application for the LI  grant for iron ore port. This application
was submitted after those for the mine and railway as SEMA required an
extended environmental study. Nevertheless, the application was submitted on
schedule.

 

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.

 

67% 'Green Iron' Flowsheet

The testing of the 67% processing route is continuing. The Amapá Project
originally produced three products: 58%, 62%, and 65% iron ore concentrate.
The 2023 pre-feasibility improved this product mix, with only a 62% and 65%
produce mix being envisaged. The current flowsheet aims to produce one hundred
per cent 67% iron ore concentrate, which has both a premium in price and is
anticipated to be a growth market in the iron ore concentrate as it represents
the feedstock to DRI furnaces. These furnaces enable the decarbonising of the
steel industry by replacing blast furnaces.

 

The main variances in the proposed 67% flow sheet involve:

 

·      Removing the jigging circuit, with the iron being recovered via
the grinding, magnetic, and flotation circuits. This will improve the iron
recovery rate.

·      Replacing hydrocyclone desliming with thickeners, improving
classification efficiency and lowering power consumption.

·      The 67% flow sheet will remove the 62% product stream,
eliminating the spiral circuit. This will shorten the process flow and reduce
power consumption.

·      Adding a flowsheet to improve iron concentrates from 65.4% to 67%
via regrinding the material from the magnetic separator, meaning finer
particles can be further liberated, improving iron concentrate grade to 67%.

·      Replacement of all slurry, water, and reagent pumps involved in
the beneficiation process.

·      A concentrate slurry pipeline and filtrate water return pipeline
system will be built to replace truck transportation.

·      The particle size of the concentrate after the tower mills is too
fine to be filtered by the existing vacuum disc filters. Therefore, horizontal
press filters are required to ensure the moisture content of the filter cake
is no larger than 8%.

·      A train loading system will be built in the train loading area.

 

A summary of the new flow sheet is available here
(https://www.cadenceminerals.com/wp-content/uploads/2024/09/67-Flow-Sheet.pdf)
.

 

The main metallurgical test work being carried out includes raw ore liberation
testing, desliming testing, magnetic separation testing, floatation testing,
grinding work index testing, concentrate tailings thickening testing and
tailings filtration testing. We expect this work to be completed in the fourth
quarter of this year.

 

Project Financing

In October 2023 (News Release Here
(https://irs.nbtrader.co.uk/ir/cadence/newsArticle.php?ST=REM&id=311428232513600167)
), our joint venture company and DEV Mineração S.A. ("DEV") entered into a
memorandum of understanding ("MOU"). The MOU is in place to secure the
required project debt financing for the construction and re-development of the
Amapá Project.

 

To complement the project debt financing, our joint venture is actively
engaging with several potential financing partners to provide the equity
portion of the funding at the project level.

 

About the Amapá Project and Cadence Ownership

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 operated by
PBA.

 

As of August 31st, 2024, Cadence's total investment in the Amapá million was
approximately US$14.2 million, and its equity stake in the project stands at
34.5%, an increase of approximately US$0.57 million since 30 June 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

 

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 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.

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