REG - Cadence Minerals PLC - EMH Cinovec PFS Update - Outstanding Results

Cadence MineralsAnnouncement

19/01/2022 14:10

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RNS Number : 9921Y  Cadence Minerals PLC  19 January 2022

Cadence Minerals Plc

 

("Cadence Minerals" or "Cadence")

 

European Metals (AIM: EMH) Cinovec PFS Update Delivers Outstanding Results.

Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to note that European
Metals Holdings Limited ("European Metals" "EMH") has announced the results of
the mining update to the 2019 Pre-Feasibility Study (2022 PFS Update), led by
mining definitive feasibility study (DFS) consultant Bara Consulting, on the
backfilling potential of the Cinovec mine, in which it has a 49% economic
interest, in the Czech Republic.

Highlights

·      The 2019 PFS Update for the Cinovec Project has been updated to
demonstrate the effect of changes in the mining process to incorporate the use
of paste backfill, which results in an increase in annual production, together
with changes in lithium and by-product prices to reflect current and expected
market conditions.

·      Annual production of battery grade lithium hydroxide monohydrate
modelled to increase from 25,267 tpa to 29,386 tpa, an increase of 16%.

·      NPV8 (post tax) increases from US$1.108B to US$1.938B, an
increase of 74.9%, based upon a lithium hydroxide price of USD17,000 per tonne
which is significantly less than the current price.

·      NPV8 (post tax) increases to over USD 3.09B with a 30% increase
in the lithium hydroxide price.

·      Post tax IRR of 36.3% and a payback period of 2.5 years from the
commencement of production.

·      Up-front capital cost due to backfilling plant and additional
capital costs to produce 29,386 tpa lithium hydroxide increased to US$644m.

·      This 2022 PFS Update assumes the life of mine extraction of 13.1%
of the Measured and Indicated JORC Resources at Cinovec.

·      Use of tailings for backfill will result in a far smaller
environmental impact, further enhancing the Project's already strong ESG
credentials.

The study updates the outcomes of the previously updated pre-feasibility study
announced on 17 June 2019 (2019 PFS Update), for changes in the mining process
as well as an increase in annual production and changes in lithium and
by-product prices.

As a result of the conclusions of the study, Geomet s.r.o. (Geomet) has
changed the planned mining method for the Cinovec orebody from open stoping to
longhole stoping with backfill using paste backfill. This change, together
with other changes to the material assumptions outlined in this update,
increases the Cinovec mine's proposed ore extraction from 34.5mt up to 54.5mt,
enabling an increase in the annual processing rate by approximately 33% per
annum over the previous 21-year life of mine, from 1.69mtpa to 2.25mtpa over a
now 25-year life of mine.

Link here for the full EMH announcement:
https://www.londonstockexchange.com/news-article/EMH/pfs-update-delivers-outstanding-results/15293716
(https://www.londonstockexchange.com/news-article/EMH/pfs-update-delivers-outstanding-results/15293716)
 

European Metals Executive Chairman Keith Coughlan commented; " I am very
pleased to report to shareholders on the completion of this 2022 PFS Update
for the Cinovec Project which adds significantly to the already robust
forecast economics for the project. The results of the study are very positive
for the overall economics, resulting in a far greater amount of the ore
resource being utilised for production of lithium and increasing the after tax
NPV8 from USD1.1B to USD1.94B. The increased NPV assumes a long-term price for
lithium hydroxide of US$17,000 per tonne. An increase in the lithium hydroxide
price to USD 22,100 would increase the NPV8 (post tax) to over USD 3BN. Given
the current price of lithium hydroxide is in the vicinity of USD 40,000 per
tonne it is clear that that the Cinovec Project will be critical to European
battery self-sufficiency.

"The use of approximately 54% of the plant tailings for backfill will result
in a far smaller environmental impact, with much smaller dry stack tailings
storage required, further enhancing the already strong ESG credentials of the
Project.

"The significant increase in lithium produced will further add to the supply
security of the European battery industry. Importantly, even at this increased
production rate, the resource is nowhere near fully utilised - paving the way
for future assessment of further production increases.

"Cinovec is strategically located in central Europe, in close proximity to the
continent's vehicle manufacturers. With increasing demand for electric
vehicles and the expected demands of grid storage capacity, the project is
very well placed to supply the European lithium market for many decades."

Cadence CEO Kiran Morzaria added; "Our congratulations to Keith Coughlan and
the European Metals team on an outstanding result at Cinovec. An increased
mine life and a resource upgrade that takes the NPV8 from USD1.1bn to
USD1.94bn adds substantial value to Cinovec's already exceptional potential as
a future battery grade lithium supply hub for Europe and the rest of the
world."

"Cadence are pleased to remain shareholders and supporters of EMH, and we look
forward to further developments."

Cadence Minerals Holding in EMH following placing

In a separate announcement today, EMH stated that it had conducted a Placement
at A$1.40 per CDI to raise approximately A$14.4 million. The Placement issue
price represents a 0.7% premium to the Company's last traded price on 18
January 2022 (A$1.39). Following the placing, Cadence will hold
 approximately 8.7% percent of the equity in European Metals, which, through
its wholly owned Subsidiary, Geomet s.r.o. ("Geomet"), controls the mineral
exploration licenses awarded by the Czech State over Cinovec.

Link here for the full EMH placing announcement:
 https://www.londonstockexchange.com/news-article/EMH/successful-placing-to-raise-aud14-4m/15293733
(https://www.londonstockexchange.com/news-article/EMH/successful-placing-to-raise-aud14-4m/15293733)
 

- Ends -

For further information:

 Cadence Minerals plc                     +44 (0) 7879 584153
 Andrew Suckling
 Kiran Morzaria

 WH Ireland Limited (NOMAD & Broker)      +44 (0) 207 220 1666
 James Joyce
 Darshan Patel

 Novum Securities Limited (Joint Broker)  +44 (0) 207 399 9400
 Jon Belliss

 

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.

 

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 Cadence Minerals Plc'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 Cadence Minerals Plc. Although any
forward-looking statements contained in this announcement are based upon what
the Directors believe to be reasonable assumptions. Cadence Minerals Plc
cannot assure investors that actual results will be consistent with such
forward-looking statements.

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