REG - Cadence Minerals PLC - Amapa Project Update & Loan Financing

Cadence MineralsAnnouncement

26/05/2023 15:00

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RNS Number : 8584A  Cadence Minerals PLC  26 May 2023

Cadence Minerals Plc

 

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

 

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.

 

 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.

 

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