REG - Cadence Minerals PLC - Mineral Resource Increase & Upgrade Amapá Project
07/10/2022 07:00
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RNS Number : 0959C Cadence Minerals PLC 07 October 2022
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Mineral Resource Increase & Upgrade at the Amapá Iron Project
Cadence delivers an increase to JORC Resource tonnes at the Amapá Iron Ore
Deposit, including a substantial uplift in Resource Categorisation.
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that DEV
Mineração S/A ("DEV") has completed a new Mineral Resource Estimate ("MRE")
in compliance with the Australian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves ("JORC Code, 2012") for the Amapá Iron Ore
Project Brazil.
Highlights:
● Substantial increase in total Measured, Indicated and Inferred
Mineral Resources, to 276.24 Million Tonnes ("Mt") grading 38.33% Fe
● New Measured Resource of 55.33 Mt grading 39.26% Fe
● Measured and Indicated Resource increase to 229.48 Mt at 38.76%
Fe, from 176.7 Mt at 39.75% Fe(( 1 )) , reported within an optimised pit shell
and using a cut-off grade of 25% Fe.
● Inferred Mineral Resource increased to 46.76 Mt at 36.20% Fe, from
8.7Mt at 36.9% Fe, reported within an optimised pit shell and using a cut-off
grade of 25% Fe.
Cadence CEO Kiran Morzaria commented:
"The main aim of our new mineral resource statement was to provide a sound
basis for pre-feasibility studies. In particular, to convert a significant
portion of the indicated mineral resource into the measured category. The
results reported today have achieved this goal and more.
The results clearly indicate the robustness and consistency of the Amapá
resource.
As we move closer to the next stage of development, this higher degree of
certainty in our mineral resource estimate provides more funding options for
the Project. The new measured resource and the overall increase in the mineral
resource provides a sound basis for an initial 15-year mine life, with the
potential to expand this further by upgrading the 46.76 Mt of inferred
resources."
Assumptions and Method of MRE
Prominas Mining Ltd ("Prominas") was commissioned by DEV Mineração S/A
("DEV") to complete a JORC Code (2012) compliant MRE on the 100% owned mineral
assets of DEV comprising the Amapá Iron Ore Deposit ("Amapá" or the
"Project") located in Amapá State, Brazil. DEV holds the mining rights to the
Project, and Cadence, via a joint venture company, owns 27% of DEV. The
classification of Mineral Resources was considered appropriate on the basis of
geological confidence, drill spacing, sample interval, QAQC and estimation
performance.
Before this MRE, the most recent MRE on the Amapá Project was completed in
2020 by Cadence ("2020 MRE"). The 2020 MRE was estimated following the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM) "Estimation of
Mineral Resources and Mineral Reserves Best Practice Guidelines" (CIM, 2019).
The 2020 MRE was limited to the Friable Hematite, Friable Itabirite and
Friable Altered Itabirite material types. While the current MRE included these
material types plus Colluvium and Canga material within the resource
statement. This inclusion of Colluvium and Canga into the MRE was deemed
appropriate as it was used as ore in historic production. The inclusion of
Colluvium and Canga in the MRE represents the majority of the increase in the
current MRE.
The geologic units that underlie the region consist of Archean basement rocks,
TTG terrains (Guianense Complex, Tumucumaque Complex and Água Fria
Metatonalite), discordantly overlaid by Paleoproterozoic greenstone belts
(Vila Nova Group), in turn, overlain by Cenozoic lateritic deposits and
Quaternary alluvial materials. In the Amapá System area, the iron ore (oxide
and silicate facies itabirites), calc-silicate and carbonatic rocks occur in
two regions. The first is a synform (locally named APW/APS) above the unit of
metabasic rocks (mainly amphibolites) and quartz mica schist biotite and
muscovite-bearing schist, where the mine is located. The second is Dragão, a
mineralised body located 3.5km to NE with orientation NW/SE, assumed as a
potential resource and not included in this mineral resources estimate.
Mineralisation extends approximately 6.5km in strike length, 1.5km in width,
and exists in some areas to more than 100m in depth. Geological processes have
weathered this proto-resource, the hard itabirite (ITC), actually considered
waste, transforming part of the volume into mineral resources, the soft
itabirite (ITB) illustrated in Figure 1 -Amapá Iron Ore Mineralisation here
(https://www.cadenceminerals.com/wp-content/uploads/2022/09/2022-MRE-Figure-1-Amapa-Iron-Ore-Mineralisation-.png)
A 3D geological model was built by an implicit modelling method based on
interpreted geological domains using the drillhole database and study of the
old sections provided by DEV, then used to flag the sample data for
statistical analysis and to limit the resource estimation. For this study,
statistical and geostatistical analysis was carried out on drilling data
composited to 4 m downhole for APW/APS only. This included variography to
model spatial continuity relationships in the geological domains.
Geostatistical analysis and interpolation were undertaken using MinePlan©
proprietary software. The Ordinary Kriging interpolation method was used for
the estimation of Fe, Al(2)O(3), SiO(2), P, and Mn, using variogram parameters
defined from the geostatistical analysis for the APW/APS domains.
Wet Bulk density values for the Amapá deposit were assigned based on data
provided by DEV. The density values were assigned to 15 lithologies based on
almost 678 density samples for friable and compact material collected from
2006 to 2012.
Mineral Resource Statement
The MRE has been reported at a cut-off grade of 25% Fe constrained by a
resource open pit and the topography dated April 2014 (grey surface in Figure
1 here
(https://www.cadenceminerals.com/wp-content/uploads/2022/09/2022-MRE-Figure-1-Amapa-Iron-Ore-Mineralisation-.png)
), in line with the Reasonable Prospects For Eventual Economic Extraction
(RPEEE) principle. The MRE has been estimated, considering a product revenue
of US$ 120/t. The geotechnical parameters, metallurgical recovery and updated
mining costs were all provided by DEV.
Table 1: Gross and attributable Mineral Resources for the Amapá Iron
Ore Project at a Cut-Off Grade reported within an optimised pit and above a
cut-off grade of 25% Fe
Classification Material Tonnage (Mt) Attributable Fe SiO(2) (%) Al(2)O(3) (%) P Mn (%)
Tonnage
(Mt) (%) (%)
Measured Friable Altered Itabirite 33.31 8.99 38.47 30.42 7.22 0.170 1.19
Friable Itabirite 14.65 3.96 39.55 36.50 2.81 0.086 0.88
Friable Haematite 0.69 0.19 62.63 4.32 2.20 0.226 0.38
Colluvium 5.84 1.58 38.80 21.66 11.89 0.177 0.70
Canga 0.84 0.23 50.03 5.68 10.60 0.971 0.18
Sub-total 55.33 14.94 39.26 30.40 6.54 0.161 1.03
Indicated Friable Altered Itabirite 66.43 17.94 37.41 32.11 6.73 0.173 1.29
Friable Itabirite 37.14 10.03 39.73 35.73 2.91 0.103 0.92
Friable Haematite 1.5 0.41 57.53 12.85 2.18 0.113 0.43
Colluvium 64.22 17.34 37.98 23.11 11.86 0.140 0.58
Canga 4.86 1.31 48.81 8.98 10.08 0.579 0.21
Sub-total 174.15 47.02 38.60 28.75 7.86 0.156 0.91
Mea. + Ind. Friable Altered Itabirite 99.74 26.93 37.76 31.55 6.89 0.172 1.26
Friable Itabirite 51.79 13.98 39.68 35.95 2.88 0.098 0.91
Friable Haematite 2.19 0.59 59.14 10.16 2.19 0.149 0.41
Colluvium 70.06 18.92 38.05 22.99 11.86 0.143 0.59
Canga 5.7 1.54 48.99 8.49 10.16 0.637 0.21
Sub-total 229.48 61.96 38.76 29.15 7.54 0.157 0.94
Inferred Friable Altered Itabirite 11.27 3.04 37.01 31.98 6.40 0.190 1.67
Friable Itabirite 3.09 0.83 38.60 35.35 3.28 0.144 1.41
Friable Haematite 0.53 0.14 50.06 21.36 2.88 0.094 0.85
Colluvium 30.21 8.16 34.80 26.20 12.92 0.107 0.53
Canga 1.66 0.45 47.19 11.60 9.98 0.381 0.27
Sub-total 46.76 12.63 36.20 27.62 10.49 0.139 0.86
TOTAL 276.24 74.58 38.33 28.89 8.04 0.154 0.93
Notes:
(1) The Mineral Resource is considered to have reasonable prospects for
eventual economic extraction based on an optimised pit shell
(2) Cut-off grade of 25% Fe applied
(3) Tonnages are reported as wet tonnes
(4) Mineral Resources are not reserves until they have demonstrated economic
viability based on a Feasibility Study or Pre-Feasibility Study
(5) The Mineral Resource Estimate has an effective date of 31 August 2022
(6) Mineral Resources have been classified in accordance with the Australian
Code for Reporting of Exploration Results. Mineral Resources and Ore Reserves
(JORC Code 2012)
(7) The attributable tonnes represent the part of the Mineral Resource that
will be attributable to Cadence Minerals' 27% interest in the Project
(8) The operator is DEV
A 3D schematic model of the Amapá Mineral Resource Estimate is available here
(https://www.cadenceminerals.com/wp-content/uploads/2022/09/Figure-2-Model-of-Mineral-Resources-at-the-Amapa-Project.png)
Prominas notes that the Mineral Resource has a reasonable prospect for
eventual economic extraction but is not currently considered Ore Reserves. Ore
Reserves are estimates of the tonnage and grade or quality of material
contained in a Mineral Resource that can be economically mined and processed.
To be considered an Ore Reserve, modifying factors must be applied to the MRE
as part of the preparation of a Pre-Feasibility or Feasibility Study. The
estimated amount of saleable material contained in the final product must
demonstrate a positive net present value using an appropriate discount rate
and must demonstrate that eventual extraction could be reasonably justified.
Prominas are not aware of any factors (environmental, permitting, legal,
title, taxation, socio-economic, marketing, political, or other relevant
factors) that have materially affected the Mineral Resource Estimate. The data
used for the MRE update were drill hole databases with proper validations,
topographic surveys and the previous Mineral Resource models provided by DEV
with the work undertaken by Prominas, which included several site visits
during 2021.
As required per the JORC Code 2012. Table 1 needed for the reporting of MREs
is available here
(https://www.cadenceminerals.com/wp-content/uploads/2022/10/MRE_JORC-Table-1_FINAL_V3.06.10.22.pdf)
Competent Person's Statement
The information that relates to Mineral Resources is based on information
compiled by Geraldo Majella, who is an associate of Prominas and a Member of
the Australian Institute of Geoscientists (AIG). Geraldo Majella has
sufficient relevant experience to the style of mineralisation and type of
deposit under consideration and to the activity for which he is undertaking to
qualify as a Competent Person as defined in the JORC Code (2012). Geraldo
Majella consents to the inclusion in the announcement of the matters based on
their information in the form and context in which it appears and confirms
that this information is accurate and not false or misleading.
Kiran Morzaria has also reviewed and approved the technical information in his
capacity as a qualified person under the AIM Rules.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed
inside information for the purposes of Article 7 of Regulation (EU) No
596/2014 until the release of this announcement.
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.
Glossary
Al(2)O(3) Aluminium oxide is a chemical compound
(https://en.wikipedia.org/wiki/Chemical_compound) of aluminium
(https://en.wikipedia.org/wiki/Aluminium) and oxygen
(https://en.wikipedia.org/wiki/Oxygen) .
Block model A three-dimensional electronic model in which geological characteristics and
qualities are housed.
Canga An iron-rich rock formed where material weathered from an original iron ore
deposit has been cemented by iron minerals.
Colluvium Loose. unconsolidated material that accumulates above the weathering iron ore
bodies.
Core A cylindrical section of a naturally occurring substance. Most core samples
are obtained by drilling with special drills into the substance, such as
sediment or rock, with a hollow steel (https://en.wikipedia.org/wiki/Steel)
tube, called a core drill (https://en.wikipedia.org/wiki/Core_drill) . The
hole made for the core sample is called the "core hole."
Cut-off grade The lowest grade of mineralised material that qualifies as ore in a given
deposit or rock of the lowest assay included in an ore estimate.
Drillhole A drill hole formed by the act or process of drilling boreholes using bits as
the rock-cutting tool. The bits are rotated by various types and sizes of
mechanisms motivated by steam, internal-combustion, hydraulic, compressed air,
or electric engines or motors.
Fe Chemical symbol for iron. It is a metal (https://en.wikipedia.org/wiki/Metal)
that belongs to the first transition series
(https://en.wikipedia.org/wiki/First_transition_series) and group 8
(https://en.wikipedia.org/wiki/Group_8_element) of the periodic table
(https://en.wikipedia.org/wiki/Periodic_table) . It is by mass the most common
element
(https://en.wikipedia.org/wiki/Abundance_of_the_chemical_elements#Earth) on
Earth (https://en.wikipedia.org/wiki/Earth) , right in front of oxygen
(https://en.wikipedia.org/wiki/Oxygen) (32.1% and 30.1%. respectively),
forming much of Earth's outer (https://en.wikipedia.org/wiki/Outer_core) and
inner core (https://en.wikipedia.org/wiki/Inner_core) . It is the fourth most
common element in the Earth's crust
(https://en.wikipedia.org/wiki/Abundance_of_elements_in_Earth%27s_crust) .
Feasibility study This study is the most detailed and will determine definitively whether to
proceed with the Project. A detailed feasibility study will be the basis for
capital appropriation (https://en.wikipedia.org/wiki/Capital_(economics)) and
will provide the budget figures for the Project. Detailed feasibility studies
require a significant amount of formal engineering work, are accurate to
within 10-15% and can cost between ½-1½% of the total estimated project
cost.
Itabirite Itabirite is a banded quartz hematite schist, very similar to banded iron
formation in appearance and composition. Friable Itabirite is extensively
weathered leading to disaggregation of the individual mineral grains
comprising the rock;
Haematite An iron oxide mineral with the chemical formula Fe(2)O(3);
Grade Relative quantity or the percentage of ore mineral or metal content in an ore
body;
Indicated Mineral Resources That part of a Mineral Resource for which tonnage, densities, shape, physical
characteristics, grade, and mineral content can be estimated with a reasonable
level of confidence. It is based on exploration. sampling and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drillholes. The locations are too
widely or inappropriately spaced to confirm geological and/or grade continuity
but are spaced closely enough for continuity to be assumed;
Inferred Mineral Resources That part of a Mineral Resource for which tonnage, grade and mineral content
can be estimated with a low level of confidence. It is inferred from
geological evidence and assumed but not verified geological and/or grade
continuity. It is based on information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings, and drill holes
which may be limited or of uncertain quality and reliability;
Interpolation Estimation of a statistical value from its mathematical or graphical position
intermediate in a series of determined points;
Kt Thousand tonnes;
Lithologies The lithology of a rock (https://en.wikipedia.org/wiki/Rock_(geology)) unit is
a description of its physical characteristics visible at outcrop
(https://en.wikipedia.org/wiki/Outcrop) , in hand or core samples
(https://en.wikipedia.org/wiki/Core_sample) , or with low magnification
microscopy. Physical characteristics include colour, texture, grain size, and
composition;
Measured Mineral Resources The part of a Mineral Resource for which tonnage, densities, shape, physical
characteristics, grade, and mineral content can be estimated with a high level
of confidence.
Mineral Reserves The economically mineable part of a Measured and/or Indicated Mineral
Resource. It includes diluting materials and allowances for losses, which may
occur when the material is mined. Appropriate assessments and studies have
been carried out and include consideration of and modification by
realistically assumed mining, metallurgical, economic, marketing, legal,
environmental, social, and governmental factors. These assessments demonstrate
at the time of reporting that extraction could reasonably be justified. Ore
Reserves are subdivided in order of increasing confidence into Probable Ore
Reserves and Proved Ore Reserves.
Mineral Resource A concentration or occurrence of material of intrinsic economic interest in or
on the Earth's crust in such form, quality, and quantity that there are
reasonable prospects for eventual economic extraction. The location, quantity,
grade, geological characteristics, and continuity of a Mineral Resource are
known, estimated, or interpreted from specific geological evidence and
knowledge. Mineral Resources are subdivided, in order of increasing geological
confidence into Inferred, Indicated and Measured categories.
Mn Chemical symbol for Manganese. It has an atomic number 25. It is not found as
a free element (https://en.wikipedia.org/wiki/Free_element) in nature; it is
often found in minerals (https://en.wikipedia.org/wiki/Mineral) in combination
with iron (https://en.wikipedia.org/wiki/Iron) .
Implicit modelling Implicit modelling is generated by computer algorithms directly from a
combination of measured data and user interpretation. The modelling requires a
geologist's insight, but this is made in the form of trends, stratigraphic
sequences, and other geologically meaningful terms. This approach is faster,
more flexible, and fundamentally better suited to modelling geology.
Modifying factors The term 'modifying factors' is defined to include mining, metallurgical,
economic, marketing, legal, environmental, social and governmental
considerations.
Net present value This is the difference between the present value of cash inflows and the
present value (https://www.investopedia.com/terms/v/valuation.asp) of cash
outflows over a period of time. NPV is used in capital budgeting
(https://www.investopedia.com/terms/c/capitalbudgeting.asp) and investment
planning to analyse the profitability of a projected investment or Project.
Open pit An excavation or cut made at the surface of the ground for the purpose of
extracting ore and which is open to the surface for the duration of the mine's
life
Ordinary kriging In the estimation of mineral resources by geostatistical methods, the use of a
weighted moving-average approach both to account for the estimated values of
spatially distributed variables, and to assess the probable error associated
with the estimates.
P The chemical symbol for Phosphorus with atomic number 15.
Pit Optimisation A process whereby a series of optimised shells for open pits are generated
each corresponding to a specific commodity price assumption.
Pit shell A design of a open-pit obtained from the process of open-pit optimisation
Pre Feasibility study Is more detailed than a Scoping Study. A Prefeasibility study is used in
determining whether to proceed with a detailed feasibility study and as a
"reality check (https://en.wiktionary.org/wiki/reality_check) " to determine
areas within the Project that require more attention. Pre-Feasibility studies
are done by factoring known unit costs
(https://en.wikipedia.org/wiki/Unit_cost) and by estimating gross dimensions
or quantities once conceptual or preliminary engineering and mine design has
been completed. Pre-Feasibility studies have an accuracy within 20-30%.
Scoping study An order of magnitude study is an initial financial appraisal of a mineral
resource. Depending on the size of the Project, an order of magnitude study
may be carried out. It will involve a preliminary mine plan and is the basis
for determining whether to proceed with more detailed engineering work.
Order-of-magnitude studies are developed by copying plans and factoring known
costs from existing projects completed elsewhere and are accurate to within
40-50%;
SiO(2) Silicon dioxide, also known as silica, is an oxide
(https://en.wikipedia.org/wiki/Oxide) of silicon
(https://en.wikipedia.org/wiki/Silicon) most commonly found in nature as
quartz (https://en.wikipedia.org/wiki/Quartz) and in various living organisms.
In many parts of the world, silica is the major constituent of sand
(https://en.wikipedia.org/wiki/Sand) .
Strike This is the direction of the line formed by the intersection of a fault
(https://www.britannica.com/science/fault-geology) , bed, or other planar
feature and a horizontal plane. Strike indicates the attitude or position of
linear structural features such as faults, beds, joints, and folds.
t Tonnes
- 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
(( 1 )) Cadence Minerals 2 November 2020 Update Mineral Resource Estimate -
Amapa Iron Ore, Available at
https://www.londonstockexchange.com/news-article/KDNC/updated-mineral-resource-estimate-amapa-iron-ore/14739627.
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