REG - Cadence Minerals PLC - Execution of Binding Prepayment Offtake Agreement

Cadence MineralsAnnouncement

01/12/2025 07:00

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RNS Number : 6092J  Cadence Minerals PLC  01 December 2025

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.

Cadence Minerals Plc

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

Execution of Binding Prepayment Offtake Agreement

Cadence Minerals (AIM: KDNC) is pleased to announce that the Company, together
with its joint venture partners Pedra Branca Alliance Pte Ltd ("PBA") and DEV
Mineração S.A. ("DEV"), has executed a binding Prepayment Offtake Agreement
(the "Agreement") with its selected offtake and logistics partner (the
"Offtaker"). The Agreement follows the completion of the Offtaker's technical,
legal, and commercial due diligence on the Amapá Iron Ore Project ("Amapá"
or the "Project").

The Agreement provides a US$4.6 million prepayment and working capital
facility, enabling the licensing and restart of the Azteca Plant and
establishing the commercial framework for the sale of iron ore concentrate.

Highlights

·      Binding Prepayment Offtake Executed: The Company has now
completed and signed the US$4.6 million prepayment agreement with its selected
offtake partner, securing the capital required to restart the Azteca Plant.

·      Immediate Value for Cadence: The prepayment structure is expected
to deliver an approximate 70% IRR on Cadence's investment in the structure,
with no further equity required to bring Azteca into production.

·      Strengthening Cadence's Equity Position: Successful execution of
the offtake and restart financing materially de-risks the Amapá Project,
demonstrating operational progress and enhancing the value of Cadence's
existing 35.7% interest in a long-life, high-grade iron ore operation.

·      Catalyst for Early Cashflow: Once in production, Azteca is
expected to generate early cashflow that supports working capital, operations
and the Amapá Definitive Feasibility Study, reducing funding risk across the
broader 5.5 Mtpa DR-grade development.

·      Funding Fully Secured: Cadence's contribution to the facility was
funded through its oversubscribed equity raise, allowing immediate access to
Tranche 1 of the prepayment facility.

·      Accelerated Path to First Production: With due diligence complete
and financing in place, the Project team are now working toward the mine
installation licence, after which refurbishment and commissioning of the
Azteca Plant will commence.

·      Strategic Acceleration of the Amapá Development Pathway: The
restart of Azteca forms a core component of Cadence's staged strategy - moving
the Project from planning into execution, demonstrating deliverability, and
building the operational foundation for long-term growth at Amapá.

Kiran Morzaria, CEO of Cadence Minerals, commented:

"Executing the binding agreement is a major milestone in our staged approach
to bringing Amapá back into production. With due diligence complete and
initial funding now available, we can progress the final licensing items ahead
of commencing the refurbishment of the Azteca Plant.

The structure ensures Cadence contributes a modest proportion of the capital
while retaining full exposure to the near-term cashflow and the wider
development of the Project. We now move confidently towards the installation
licence and the start of restart activities."

Commercial Terms

Under the binding agreement, the Offtaker and Cadence will provide a US$4.6
million prepayment facility to restart the Azteca Plant. This funding is
provided upfront and will be repaid from future iron ore shipments.

The facility includes US$3.45 million to complete licensing, refurbishment and
commissioning of the plant, and US$1.15 million of working capital for
logistics and the first shipment.

The first tranche totals US$1.17 million, of which Cadence will contribute
US$391,000 and the Offtaker will fund the balance. These funds will be used to
obtain the outstanding permits, including the mine installation licence,
enabling construction and rehabilitation of the Azteca Plant and the tailings
storage facility to begin.

The Offtaker will also fund US$2.43 million in the second tranche and US$1.15
million of working capital. These amounts become available once the relevant
construction and production licences are granted and, in the case of working
capital, once first production has commenced.

Repayment of the facility will be made per tonne of iron ore shipped, aligning
repayments with actual production and early revenues. Cadence will receive its
pro-rata share of repayments and marketing income based on its contribution

The prepayment covers all capital and working-capital needs to restart Azteca,
meaning no further equity contribution is required from Cadence to bring the
plant into production. Marketing arrangements continue on any product shipped
above one million tonnes, ensuring long-term commercial alignment with the
Offtaker.

Next Steps

The Company and its joint venture partners will now focus on completing the
final items required for the mine installation licence, including the
supplementary archaeological survey and detailed engineering for the
water-reticulation and sewage-treatment systems. These works are expected to
conclude in approximately two months, after which the application will move
into the formal federal and state environmental approval processes, currently
expected to take a further two months.

Subject to the licence being granted, refurbishment and commissioning of the
Azteca Plant will begin immediately, with first production and shipment
targeted within three months of licence issuance. Once operational, free
cashflow from Azteca is expected to fund working capital, ongoing operations,
and the initial stages of the DFS and early works for the broader 5.5 Mtpa
DR-grade development at Amapá.

About the Amapá Project

The Amapá Iron Ore Project is a fully integrated mine, rail, and port
operation in Brazil. It hosts a JORC-compliant Mineral Resource of 276 Mt @
38% Fe and a Proven and Probable Ore Reserve of 195.8 Mt @ 39.3% Fe. The
December 2024 Pre-Feasibility Study confirmed the Project's potential to
produce 5.5 Mtpa of 67.5% Fe DR-grade concentrate, with a post-tax NPV10 of
US$1.97 billion and forecast C1 cash costs of US$27.28/dmt FOB Santana.

 For further information, contact:

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

 Zeus (NOMAD & Broker)                                        +44 (0) 20 3829 5000
 James Joyce
 Darshan Patel

 Gabriella Zwarts

 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.

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