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Cadence Minerals #KDNC CEO Kiran Morzaria discusses the company’s lithium, rare earth and iron ore assets with Vox Markets

Cadence Minerals #KDNC CEO Kiran Morzaria discusses the company’s lithium, rare earth and iron ore assets with Abraham Darwyne at Vox Markets. Link on the image to watch.

EMH’s Potential Cinovec Partner CEZ plans to Build a ‘Gigafactory’ in North Bohemia – Cadence Minerals

EMH’s Potential Cinovec Partner CEZ plans to Build a ‘Gigafactory’ in North Bohemia

An article published on the Radio Prague International website says Czech utility ČEZ plans to build a ‘gigafactory’ for batteries for cars in North Bohemia in the coming years that would use lithium discovered in the Ore Mountains near Cínovec, on the German border.

Cinovec is the largest lithium deposit in Europe and the fourth largest non-brine deposit in the world.

Minister of Industry and Trade Karel Havlíček said during a visit to Berlin on Wednesday that ČEZ plans to use lithium stocks from Germany and the Czech Republic. As such ore from Cinovec will be used to supply the ‘gigafactory’.

The Czech Republic has the biggest lithium reserves in Europe and many politicians have pushed for its mining to be in the hands of a state-controlled company, such as ČEZ.

AIM listed European Metals Holdings (AIM: EMH), through its wholly owned subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium Project.

Currently, CEZ and EMH are close to concluding a deal that will see CEZ become a 51% of Geomet s.r.o., EMH’s wholly owned Czech subsidiary and the holder of the Cinovec licences.

Kiran Morzaria, non-executive director of EMH and CEO of AIM listed mining investment group Cadence Minerals (AIM: KDNC), which owns around 19% of EMH said the proposed development partnership between EMH and CEZ “underscores the importance of Cinovec as a key future battery grade lithium supplier to the European lithium market.”

Notes:

Radio Prague International story link:

https://www.radio.cz/en/section/news/czech-utility-to-build-car-battery-gigafactory-bordering-germany-lithium-deposits

Cadence Minerals (KDNC) – European Metals (AIM: EMH) – Potential Strategic Partnership with CEZ and Significant Investment into Cinovec Project.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the update today from European Metals Holdings Limited (“European Metals” “EMH” or “the Company”) that it has today reached conditional agreement with CEZ Group (“CEZ”), one of Central and Eastern Europe’s largest power utilities, regarding a potential strategic partnership and significant investment into the Cinovec Project (“Cinovec” or “the Project”). 

If concluded, the agreement will see, subject to the successful completion of due diligence, shareholder, and other approvals, CEZ become a 51% shareholder in Geomet s.r.o. (“Geomet”), the Company’s Czech subsidiary and holder of the rights over the Project, for consideration of approximately EUR 34.06 million (approximately AUD 55.25 million) by subscribing for new shares in Geomet (the “Proposed Subscription”).

Cadence Minerals Holding in EMH

Cadence holds approximately 19.1 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.

Background to the Proposed CEZ Subscription

In July this year, European Metals announced that CEZ was conducting due diligence on the Company and the Cinovec Project, and that the successful outcome of the due diligence process could result in CEZ potentially becoming the Company’s largest shareholder and co-development partner for the Cinovec Project. Since then, European Metals and CEZ have held detailed discussions on the framework for CEZ’s participation in the Cinovec Project and today European Metals and CEZ entered into the Exclusivity and Framework Agreement.

European Metals considers that CEZ Group is an ideal strategic and financial partner for the Cinovec Project. In addition to CEZ’s financial strength, the Board believes that CEZ provides strong strategic relationships within the Czech Republic, the European Union and abroad. CEZ is a leader in power generation and distribution in the region and has plans to become heavily involved in the development of new energy systems. Through these battery industry activities, CEZ is expected to assist greatly in the securing of off take agreements for the Project

Headquartered in the Czech Republic, CEZ is an established, integrated energy group with operations in a number of Central and Southeastern European countries and Turkey. CEZ’s core business is the generation, distribution, trade in, and sales of electricity and heat, trade in and sales of natural gas, and coal extraction. CEZ Group has 33,000 employees and annual revenue of approximately EUR 7.24 billion. 

The largest shareholder of its parent company, CEZ a. s., is the Czech Republic with a stake of approximately 70%. The shares of CEZ a.s. are traded on the Prague and Warsaw stock exchanges and included in the PX and WIG-CEE exchange indices. CEZ’s market capitalization is approximately EUR 10.08 billion.

As one of the leading Central European power companies, CEZ intends to develop several projects in areas of energy storage and battery manufacturing in the Czech Republic and in Central Europe.

CEZ is also a market leader for E-mobility in the region and has installed and operates a network of EV charging stations throughout Czech Republic. The automotive industry in Czech is a significant contributor to GDP and the number of EV’s in the country is expected to grow significantly in coming years.

AIM Rule 15

The Proposed Subscription would constitute a fundamental change of business for European Metals under Rule 15 of the AIM Rules. The Proposed Subscription is therefore conditional on, inter alia, Shareholder approval which will be sought at a General Meeting of the Company to be convened in due course. European Metals will, however, remain an operating minerals company under the AIM Rules given its remaining material interest and ongoing involvement in the Cinovec Project after the Proposed Subscription has completed, as described above.

The completion of the Proposed Subscription will not result in any changes to the European Metals board or management.

Further information

European Metals expects to publish shortly a circular to shareholders setting out further details of the Proposed Subscription, the Exclusivity and Framework Agreement and Geomet Shareholders’ Agreement, together with notice of the General Meeting and a further announcement will be made in due course.

The full release, including the Exclusivity and Framework Agreement can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/EMH/14314905.html

European Metals Managing Director Keith Coughlan said; “We are very pleased to have concluded another stage of negotiations with CEZ regarding the future development of the Cinovec Project. CEZ is one of the largest companies in the Czech Republic and one of the leading companies in Central and Eastern Europe, having a strong vision with regards to the construction of battery production facilities, renewable energy and power storage. 

If concluded, this agreement will result in Cinovec being fully funded through to a construction decision and will assist greatly in the integration of Cinovec into the European battery market. The potential investment by CEZ further demonstrates EMH’s commitment to develop fully the Cinovec Project in conjunction with Czech industry, for the benefit of the country’s involvement in the battery and EV industries. With their blend of technical foresight, historic mining experience, strong balance sheet and involvement in the rapidly growing European Battery Industry, CEZ is the ideal partner for the Company.”

Cadence Minerals CEO Kiran Morzaria commented: “The proposed funding and development partnership between EMH and utility giant CEZ further underscores the importance of Cinovec as a key future battery grade lithium supplier to the European lithium market. As a major shareholder in EMH, we fully support the board in this major milestone step for the Company.”

– Ends –

For further information:

Cadence Minerals plc +44 (0) 207 440 0647
Andrew Suckling  
Kiran Morzaria  
   
WH Ireland Limited (NOMAD & Broker) +44 (0) 207 220 1666
James Joyce  
James Sinclair-Ford  
   
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 Cadence’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. 

Cadence Minerals #KDNC – Interim Results for the six months ended 30 June 2019

Cadence Minerals plc announces interim Results for the six months ended 30 June 2019

 

 

HIGHLIGHTS

·    Cadence entered into an investment agreement to acquire up to 27% of the Amapá iron ore mine, beneficiation plant, railway and private port.

·      Before its sale in 2012 Anglo American valued  (impaired) its 70% stake in the Amapá iron ore mine at  US $462m ( 100% US $600m).

·      During its operation, the mine generated an annual operating profit of up to U$171 million (100%).

·      The total historic mineral resource contains an estimated 348 million tonnes (“Mt”) of ore @ 38.9% iron content (“Fe”).

·    Macarthur Minerals (Cadence equity ownership approx. 9%) refocused efforts on their iron ore assets and secured a binding Life-Of-Mine Off-Take Agreement with Glencore International A.G

·    European Metals (Cadence equity ownership approx. 19%) published a pre-feasibility study for the production of lithium hydroxide, increasing the net present value of the project 105% to US$1.1 BN.

INVESTMENT REVIEW

Amapá, Iron Ore Mine (“Amapá”)

In June this year Cadence Minerals entered into a binding investment agreement (“the  Agreement”) with Indo Sino Pte. Ltd. (“Indo Sino”) to invest in and acquire up to a 27% interest in the former Anglo American plc (“Anglo American”) and Cliffs Natural Resources (“Cliffs”) Amapá iron ore mine, beneficiation plant, railway and private port (“Amapá Project”) owned by DEV Mineração S.A. (“Amapá”).

The Amapá Project is a large-scale iron open pit ore mine with associated rail, port and beneficiation facilities and commenced operations in December 2007. Production increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012 respectively.

A summary of the asset is as below:

·      Before its sale in 2012 Anglo American valued its 70% stake in the Amapá Project at US$866 million (100% 1.2 billion) and after impairment valued it at  US $462m in its 2012 Annual Report ( 100% US $600m)

·      During its operation, the mine generated an annual operating profit of up to U$171 million (100%)

·      The total historic mineral resource contains an estimated 348 million tonnes (“Mt”) of ore @ 38.9% iron content (“Fe”)

·      The ore is beneficiated to 65% Fe Pellet Feed and 62% Fe Spiral Concentrate

·      Based on available historic mine plans and an independent consultant review it is expected that at full production the Amapá Project has a mine life of 14 years and at full capacity is targeting to produce up to 5.3 Mt of Iron Ore per annum

·      Subject key preconditions being met, the planned shipment of a 1.39 million tonne stockpile is scheduled to commence in December 2019. It is estimated that these stockpiles have a net realisable value of approximately US$ 60 million, which will be reinvested in the restart of the Amapá Project

·      Potential for the mine and existing infrastructure to be brought to market swiftly with mining and processing anticipated to restart in 2021 subject to the grant of the necessary permits, regulatory consents and project financing.

To acquire its 27% interest, Cadence will invest US$ 6 million over two stages. The first stage is for 20% of the JV Co the consideration for which is US$2.5 million. The second stage of investment is for a further 7% of JV Co for a consideration of US$3.5 million. Should Indo Sino seek additional investors or an investment in the JV Co the agreement also provides Cadence with a first right of refusal to increase its stake to 49% in the JV Co.

Our investment is conditional on several key preconditions the first is the approval of the judicial restructuring plan (“JRP”), which was completed at the end of August. Once the remaining pre-conditions relating to the reinstatement of a concession on the railway licenses and bank creditor arrangements have been met, the US$2.5 million investment placed in the judicial trust account will be released, and Cadence will own 20% of the Amapá iron ore project. This will enable the start of the shipping of the iron stockpile.

The approval of the JRP and the fulfilment of the preconditions outlined above will result in Cadence’s and IndoSino’s joint venture company Pedra Branca Alliance Pte Ltd. (“PBA”) owning 99.9% of DEV Mineração S.A. (“Amapá”). DEV Mineração S.A. is the owner of the Amapá iron project.

Cadence’s next stage of investment will be a further investment of US$3.5 million on the grant of all operational and environmental licenses for the Amapá Project, at which point Cadence will own 27%.

As part of the JRP Amapá submitted an outline of an operational and financial plan that Amapá intends to implement to bring the project back into production, which included the following

·      The total initial estimate of capital investment of approximately US$168 million, of which it is estimated US$61 million will be spent on port rehabilitation and US$47 million to be spent on plant recommissioning.

·      Rehabilitation to be completed by the end of 2021 with new production in 2022. Full production by 2024 of 5.3 million tonnes (“Mt”) of iron ore per annum.

·      At full production and using US$61 per tonne of 62% Fe Amapá is forecast to have:

·      an average net revenue after shipping of US$266 million per annum,

·      and an average EBITDA of US$136 million per annum.

European Metals Holdings Limited (“EMH”)

Cadence has been investing in European Metals since June 2015. As of the date of this document, Cadence holds approximately 19% in the Cinovec deposit in the Czech Republic through a direct holding in the share capital of European Metals that owns 100 per cent of the exploration rights to the Cinovec lithium/tin deposit. The Cinovec lithium and tin deposit is located in the Krusne Hory mountain range. The deposit that straddles the border between Germany and the Czech Republic and in Germany, it is known as the Zinnwald deposit (50% owned by Bacanora Lithium Plc ). The district has an extensive mining history, with various metals having been extracted since the 14th Century.

During the period EMH made significant progress. Drilling continued at the site with five of the eight-hole programme completed; this drilling programme was carried out to define the first two years of mining within the Cinovec-south area. The results of this programme have either been in line with or exceeded, EMH’s expectations particularly with regard to the tin intercepts.

In addition to the drilling results, EMH published a pre-feasibility study on producing battery-grade lithium hydroxide for as an alternative to battery-grade lithium carbonate. The result significantly enhanced the forecast economics of the Cinovec Project:

Highlights of the study are: (all $ figures in this release are US Dollars and increases refer to the 2017 PFS Lithium Carbonate study):

·           Net estimated overall cost of production post-credits: $3,435 / tonne LiOH.H2O

·           Project Net Present Value (“NPV”) increases 105% to: $1.108B (post-tax, 8%)

·           Internal Rate of Return (“IRR”) was increased 37% to 28.8% (post-tax)

·           Total Capital Cost: $482.6M

·           Annual production of Battery Grade Lithium Hydroxide: 25,267 tonnes

·           Studies are based on only 9.3% of reported Indicated Mineral Resource and a mine life of 21 years processing an average of 1.68 Mtpa ore

·           The process used to produce lithium hydroxide allows for the staging of lithium carbonate and then lithium hydroxide production to minimise capital and startup risk and enables the production of either battery-grade lithium hydroxide or carbonate as markets demand

After the period end, EMH entered into an agreement with CEZ Group(“CEZ”), one of Central and Eastern Europe’s largest power utilities, to conditionally provide a EUR 2 million finance facility by way of a convertible loan. CEZ is currently conducting due diligence on the Company and Project. The successful outcome of the due diligence process could see CEZ become European Metals’ largest shareholder and co-development partner for the Cinovec Lithium/Tin Project through conversion of the convertible note and subsequent additional investment.

Macarthur Minerals (“Macarthur”)

Cadence holds approximately 9% of the equity in Macarthur. Macarthur has three iron ore projects in the Yilgarn region of Western Australia. The Company has also established multiple project areas in the Pilbara, Western Australia for conglomerate gold, hard rock greenstone gold and hard rock lithium. In addition, Macarthur Minerals has significant lithium brine interests in the Railroad Valley, Nevada, USA.

During the period Macarthur focused its efforts on its Iron Assets in Western Australia.

The main highlights for Macarthur over the period were:

·       Opened an up to US$6 million institutional convertible note offer to fund the production of a Bankable Feasibility Study on Macarthur iron ore projects

·       Binding Life-Of-Mine Off-Take Agreement with Glencore International A.G for the Lake Giles Iron Ore Project for approximately 4 mtpa for the first 10 years on project start up

·       Macarthur entered into exclusive negotiation agreement with Aurizon for rail haulage services for the Lake Giles Iron Ore Project

·       Infill drilling program planned for the Moonshine magnetite deposit

·       Engineering firm Engenium commissioned to revise NI 43-101 compliant technical report and refine operating and capital costs of the hematite and magnetite projects

·       Applications have been made for three additional prospective iron ore tenements. These were properties released by Cliffs Natural Resources and are adjacent to the iron ore operations of Mt Jackson and Deception Mines

Bacanora Lithium Plc (“Bacanora”)

At the period end Cadence owned less than one per cent of Bacanora’s equity and a 30% stake in the Mexalit S.A. de CV (“Mexalit”) joint venture which forms part of the Sonora Lithium Project in Northern Mexico.

Bacanora has two lithium development assets, the Sonora Lithium Project and the Zinnwald Lithium Project. Bacanora has a 50% interest in, and joint operational control, of the Zinnwald Lithium Project. Zinnwald represents a strategic asset located near a thriving market for lithium and energy products.

Bacanora’s principal asset is the Sonora Lithium Project in northern Mexico. The asset has Measured plus Indicated Mineral Resource estimate of over 5 million tonnes (‘Mt’) (comprising 1.9 Mt of Measured Resources and 3.1Mt of Indicated Resources) of lithium carbonate equivalent (‘LCE’) and an additional Inferred Mineral Resource of 3.7 Mt of LCE, Sonora is regarded as one of the world’s larger known clay lithium deposits.

Bacanora continued to progress the strategic investment by Ganfeng Lithium Co., Ltd. (“Ganfeng”) during the period and signed the investment agreement at the end of June 2019, the key terms of which were:

·           Cornerstone strategic investment of 29.99% in Bacanora for £14,400,091 by Ganfeng

·           Project level investment of 22.5% in Sonora Lithium Ltd , the holding company for the Sonora Lithium Project, for £7,563,649

·           Additional long-term offtake at a market-based price per tonne

·           Gangfeng will complete a review within six months of the EPC engineering design and capital costs of Sonora Lithium Project with a view to reducing costs and accelerating the timetable

·           Gangfeng will provide a plant and process commissioning team to assist Bacanora in delivering first production in 2021

At the time of publishing Ganfeng was awaiting final approval from Chinese authorities to make its investment.

Yangibana Rare Earth Project

Cadence owns a 30% free carried interest in the Yangibana North, Gossan, Hook, Kanes Gossan, Lions Ear and Bald Hill North rare earth projects in Western Australia. These projects form part of the larger Yangibana Rare Earth Project (“the Project”). The free carry is up to the commencement of the feasibility study.

A considerable amount of work over this period has been to define the geological resource and reserves, optimise the process flow, carry out detailed design and engineering work required for the setting up of a process plant, negotiations on equipment supply and no less crucial securing project finance. An early works permit was granted which allowed the initiation of infrastructure work and bring on-site a 340 rooms accommodation camp ready for occupation when mine construction commences.

On geology, there was a 34% increase in probable ore reserves to 10.35 million tonnes at 1.22% TREO including 0.43%Nd2O3+Pr6O11, supporting an initial 11 years operational life for the project based on the JORC certified resource of 21.7 million tonnes.

The current mine plan and production targets set out by the operator incorporates 10.35 million tonnes of Probable Ore Reserves, of which 1.96 million tonnes is part our joint venture asset, Yangibana North, which according to the operator’s production targets are scheduled to be mined from year 8 to year 14. These production targets include indicated mineral resources, hence the longer mine life.

Lithium Assets in Australia

In March this year Cadence announced that it has agreed to acquire three highly prospective assets in Australia that are in regions with proven high-grade lithium mineralisation. The mechanism to facilitate this acquisition was via varying binding investment agreements in place with Lithium Technologies Pty Ltd (“LT”) and Lithium Supplies Pty Ltd (“LS”) that Cadence entered on 11 December 2017 to acquire up to 100% of six prospective hard rock lithium assets in Argentina.

Highlights of the assets include:

·     The acquisition covers three projects – Picasso (Western Australia – WA), Litchfield (Northern Territories – NT) and Alcoota (NT) – that are located  in regions with proven lithium mineralisation and supportive mining infrastructure

·     The Picasso Project (license granted) is near Alliance Mineral Assets’ (ASX: A40; SGX: 40F; “AMA”) high-profile Bald Hill Mine in WA (note: AMA recently completed a 50:50 A$400m+ merger with delisted Tawawa Resources [ASX: TAW] & raised $40M to develop the  asset base)

·     Demonstrating exploration upside for Picasso, the Bald Hill Mine is producing a spodumene concentrate and has a JORC (2012) compliant mineral resource of 26.5Mt @ 0.96% Li2O; probable ore reserves at 11.3Mt @ 1.01% Li2O

Preliminary exploration work was concluded in April with positive results, and Cadence increased its stake from 4% to 24%. Early exploration work will begin soon to test and sample targets that have been identified during the preliminary exploration.

Other Investments

Cadence also retains equity positions in Sagon Resources Ltd (formerly Clancy Minerals Ltd) and Auroch Minerals Ltd. The latter being involved in base metal exploration in Australia, in particular, the Saints Nickel Project in Western Australia. Sagon Resources Ltd is currently exploring the Cummins Range Rare Earths Project.

FINANCIAL REVIEW

During the period, the Group made a loss before taxation of £0.28 million (30 June 2017: loss of £4.61 million). This was primarily due to an increase in the value on our portfolio, which offset administrative, financing and share of associated losses totalling £0.96 million.

There was a weighted basic loss per share of 0.003p (30 June 2017: loss per share 0.059p)  Foreign currency translation differences marginally decreased comprehensive loss for the period to £0.24 million (30 June 2017: total comprehensive loss of £4.66 million).

Administrative expenses decreased by £0.11 million compared to the same period last year; this decrease was driven by cost-cutting measures across the board.

The total assets of the group increased from £18.33 million at 31 December 2017 to £19.39 million. Of this amount, £2.33 million represent the market value of our available for sale investments at the period end. The reduction in the total assets is as a result of the decrease in the value of Bacanora equity, which was the primary driver for the reduction of available for sale asset value.

It is important to note that this does not include our investment in EMH. Our investment in EMH is classified as an investment in an associate and held at a value of £12.2 million. EMH is classified as such because we hold approximately 19% and Kiran Morzaria, the Chief Executive Officer of Cadence is also a Non-Executive Director of EMH.

Our borrowings of £3.71 million as at the 31 December 2017 reduced to £2.06 million by the end of the period as we paid back our convertible loans.

During the period, our net cash outflow from operating activities was £0.52 million compared to £0.45 million during the same period last year. We invested £0.27 million in Amapá, as part of our due diligence and JRP costs and our financing costs were some £0.19 million. We disposed of £1.42 of our available for sale investments which predominantly was our Bacanora equity. These sales were used to pay back some £1.59 million of our convertible loan during the period. We raised some £1.30 million of equity during the period which after netting of the aforementioned costs and revenue from the sale of our equity stake yielded resulted in a cash balance at the end of the period of £0.54 million

 

For further information, please contact

Cadence Minerals plc

+44 (0) 207 440 0647

Andrew Suckling

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)

+44 (0) 207 220 1666

James Joyce

James Sinclair-Ford

Novum Securities Limited (Joint Broker)

+44 (0) 207 399 9400

Jon Belliss

 

 

CADENCE MINERALS PLC

STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2019

 

Notes

Unaudited Period ended 30 June 2019

Unaudited Period ended 30 June 2018

Audited Year ended  31 December 2018

£’000

£’000

£’000

Income

Unrealised profit/(loss) on assets held for sale

1,118

(3,730)

(7,440)

Realised (loss)/profit on assets held for sale

(264)

105

(1,967)

Other income

4

48

140

858

(3,577)

(9,267)

Share based payments

(3)

(7)

Other administrative expenses

(672)

(785)

(1,559)

Total administrative expenses

(672)

(788)

(1,566)

Operating profit/(loss)

186

(4,365)

(10,833)

Share of associates losses

(274)

(182)

(555)

Finance cost

(197)

(59)

(377)

(Loss)/profit before taxation

(285)

(4,606)

(11,765)

 

 

 

Taxation

(Loss)/profit attributable to the equity holders of the Company

(285)

(4,606)

(11,765)

Other comprehensive income/(expenditure)

Foreign currency translation differences

47

(53)

(150)

Other comprehensive income/(expenditure) for the period net of tax

47

(53)

(150)

Total comprehensive expenditure for the period

(238)

(4,659)

(11,915)

Loss per share

Basic  (pence per share)

3

(0.003)

(0.059)

(0.150)

Diluted  (pence per share)

3

(0.003)

(0.051)

(0.145)

CADENCE MINERALS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2019

 

Share capital

Share premium account

Share-based payment reserve

Hedging, Loan & Exchange reserves

Retained earnings

Total equity

£’000

£’000

£’000

£’000

£’000

£’000

Balance at 1 January 2018

1,202

27,552

3,178

337

(5,545)

26,724

Share based payments

3

3

Transfer on lapse of warrants

(132)

132

Transactions with owners

              –  

                –  

(129)

                –  

132

3

Foreign exchange

 –

 –

(53)

 –

(53)

Profit for the period

(4,606)

(4,606)

Total comprehensive loss for the period

              –  

                –  

              –  

(53)

(4,606)

(4,659)

Balance at 30 June 2018 (unaudited)

1,202

27,552

3,049

284

(10,019)

22,068

Share based payments

4

4

Transfer on lapse of warrants

(1,661)

1,661

On settlement of loan notes

(412)

(412)

Transactions with owners

              –  

                –  

(1,657)

(412)

       1,661

(408)

Foreign exchange

(97)

(97)

Loss for the period

(7,159)

(7,159)

Total comprehensive loss for the period

              –  

                –  

              –  

(97)

(7,159)

(7,256)

Balance at 31 December 2018

1,202

27,552

1,392

(225)

(15,517)

14,404

Issue of share capital

232

2,668

2,900

Costs of share issue

(105)

(105)

Transactions with owners

          232

         2,563

                –  

              –  

       2,795

Foreign exchange

 –

 –

47

 –

47

Loss for the period

(285)

(285)

Total comprehensive loss for the period

              –  

                –  

              –  

47

(285)

(238)

Balance at 30 June 2019 (unaudited)

1,434

30,115

1,392

(178)

(15,802)

16,961

 

 

 

 

 

 

 

 

 

 

 

CADENCE MINERALS PLC

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2019

 

Unaudited

Unaudited

Audited

 30 June 2019

 30 June 2018

 31 December 2018

Assets

Notes

£’000

£’000

£’000

Non-current

Intangible assets

2,438

1,875

2,172

Investment in associate

12,170

12,918

12,483

14,608

14,793

14,655

Current assets

Trade and other receivables

1,919

461

315

Assets held for sale

2,330

9,946

2,895

Cash and cash equivalents

536

216

468

Total current assets

4,785

10,623

3,678

Total assets

19,393

25,416

18,333

EQUITY AND LIABILITIES

Current liabilities

Trade and other payables

372

290

223

Borrowings

2,060

3,058

3,706

Total current liabilities and total liabilities

2,432

3,348

3,929

Equity

Share capital

4

1,434

1,202

1,202

Share premium

30,115

27,552

27,552

Share based payment reserve

1,392

3,049

1,392

Hedging & Exchange reserve

(178)

284

(225)

Retained earnings

(15,802)

(10,019)

(15,517)

Total equity and liabilities

to owners of the company

16,961

22,068

14,404

Total equity and liabilities

19,393

25,416

18,333

CADENCE MINERALS PLC

CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD 30 JUNE 2019

 

Unaudited Period ended

Unaudited Period ended

Audited Year ended

30 June 2019

30 June 2018

 31 December 2018

£’000

£’000

£’000

Cash flows from operating activities

Operating profit/(loss)

186

(4,365)

(10,833)

Net realised/unrealised profit on assets held for sale

(854)

3,625

9,407

Equity settled share-based payments

3

7

Decrease/(increase) in trade and other receivables

(4)

261

407

Increase/(decrease) in trade and other payables

149

28

(39)

Net cash outflow from operating activities

(523)

(448)

(1,051)

Taxation

Cash flows from investing activities

Payments for investments in assets held for sale

(476)

(523)

Receipts on sale of assets held for sale

1,419

438

1,755

Receipts from sale of/(payments for) investments in associates

39

(50)

Investment in exploration costs

(266)

(100)

(325)

Net cash outflow from investing activities

1,192

(138)

857

Cash flows from financing activities

Proceeds from issue of share capital

1,300

Share issue costs

(105)

Net (loan repayments)/borrowings

(1,599)

(1,176)

(998)

Finance cost

(197)

(59)

(377)

Net cash inflow from financing activities

(601)

(1,235)

(1,375)

Net increase/(decrease) in cash and cash equivalents

68

(1,821)

(1,569)

Cash and cash equivalents at beginning of period

468

2,037

2,037

Cash and cash equivalents at end of period

536

216

468

 

NOTES TO THE INTERIM REPORT

FOR THE PERIOD ENDED 30 JUNE 2019

 

1 BASIS OF PREPARATION

 

The interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention.  The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group’s statutory financial statements for the year ended 31 December 2018 have been delivered to the Registrar of Companies. The auditor’s report on those financial statements was unqualified.

 

The principal accounting policies of the Group are consistent with those detailed in the 31 December 2018 financial statements, which are prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted by the European Union.  IFRS16 – Leases has been adopted, but as the Group has no leases exceeding 12 months, this has had no impact.

 

GOING CONCERN

 

The Directors have prepared cash flow forecasts for the period ending 30 September 2019. The forecasts demonstrate that the Group has sufficient funds to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the accounts have been prepared on a going concern basis.

 

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results

 

2 SEGMENTAL REPORTING

 

An operating segment is a distinguishable component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group’s chief operating decision maker to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available.

 

The chief operating decision maker reviews financial information for and makes decisions about the Group’s performance as a whole. The Group has not actively traded during the period.

 

Subject to further acquisitions the Group expects to further review its segmental information during the forthcoming financial year.

 

3 PROFIT PER SHARE 

 

The calculation of the loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

 

Unaudited

Unaudited

Audited

six months ended

six months ended

year ended

30 June 2019

30 June 2018

31 December 2018

£’000

£’000

£’000

(Loss)/profit on ordinary activities after tax (£’000)

(285)

(4,606)

(11,765)

Weighted average number of shares for calculating basic loss/profit per share

  8,335,217,332

  7,851,440,338

  7,851,440,338

Share options and warrants exercisable

     280,000,000

  1,259,575,345

     280,000,000

Weighted average number of shares for calculating diluted loss/profit per share

  8,615,217,332

  9,111,015,683

  8,131,440,338

Basic loss per share (pence)

(0.003)

(0.059)

(0.150)

Diluted loss per share (pence)

(0.003)

(0.051)

(0.145)

 

4 SHARE CAPITAL

 

Unaudited

Unaudited

Unaudited

30 June 2019

30 June 2018

30 June 2018

£’000

£’000

£’000

Allotted, issued and fully paid

173,619,050 deferred shares of 0.24p (30 June 2018 and 31 December 2018: 173,619,050)

417

417

417

10,172,652,446 ordinary shares of 0.01p (30 June 2018 and 31 December 2018: 7,851,440,338)

                  1,017

                      785

                      785

                  1,434

                  1,202

                  1,202

 

AIM minnow Cadence punches well above its weight in Brazil

Since evolving from Rare Earth Minerals in early 2017, AIM listed Cadence Minerals (KDNC) has offered investors a proposition largely based on investments into selected lithium and base metal projects around the globe.

Taking cornerstone stakes in projects such as the Cinovec Lithium and Tin Project in the Czech republic and the Sonora Lithium Project in Mexico has seen the company portfolio exhibit excellent returns. However, the sell-off in Lithium stocks over the last two years has seen the Cadence share price drift in line with the underperformance of public investments in the sector.

December 2017 saw a strategic shift to invest and acquire assets directly, with the acquisition of hard rock lithium assets in Argentina. Following subsequent investments into three lithium projects in Australia, the iron ore supply squeeze in late 2018 threw up an opportunity in Brazil that did not go unnoticed by eagle eyed Cadence management.

Formerly owned by Anglo American (AAL) and Cliffs Natural Resources, the Amapá iron ore project is a large-scale iron open pit ore mine with associated rail, port and beneficiation facilities. Based in Northern Brazil close to the Atlantic, Amapá commenced operations in December 2007, and prior to its sale in 2012 due to a collapse in iron ore prices, Anglo American valued its 70% stake at $462m. Back then the mine was selling ore globally to Europe, USA and China.

With some $60m of iron ore stockpile sitting ready for shipment at the port, Cadence CEO Kiran Morzaria set up a joint venture company Pedra Branca Alliance Pte Ltd (PBA) with Singapore based commodities group IndoSino Pte Ltd to acquire the Amapá holding company.

A judicial restructuring plan submitted by PBA has just been approved, which astonishingly will see Cadence acquire, through PBA, a 27% stake in the Amapá iron ore project for just $6m.

“Opportunities such as this come along once or twice in a lifetime,” says Morzaria.

“To start a project on the scale of Amapá would require little short of $1bn capex. We (Cadence) will own 27% of a project, which when recommissioned should generate over $136m EBITDA per annum for at least 14 years, plus we will have the right and first refusal to acquire up to 49%.”

PBA expects to start shipping the stockpile by the end of this year, which will see a net $60m into the coffers to part complete the $168m investment required to recommission the mine, railway and port.

Rehabilitation of the mine, railway and port is expected to be completed by 2021, with first new production in 2022. A production ramp up will see 5.3 million tonnes of iron ore produced per annum by 2024.

KDNC CEO Kiran Mozaria explores Amapa’s sorting area

More significantly, mine net revenues after shipping is forecast to be approximately $265m per annum, with EBITDA of approx $136m per annum based on a conservative iron ore price of $61 per tonne. Currently iron ore prices are closer to $90 per tonne.

Of course there is another benefit in rehabilitating the Amapá mine. The local economy will be rejuvenated, creating hundreds of jobs and employment opportunities, along with new funding for local schools and hospitals.

“Previously Amapá’s output amounted to a sizeable chunk of the local economy,” adds Morzaria.

“Bringing the mine back to life will provide a huge boost to the region.” For AIM minnow Cadence, which currently trades on an asset backed market cap of just £9m, the opportunity and the numbers are hugely impressive and potentially transformational. Punching indeed!

Notes:
For full details on this story, the formal RNS announcement is here:

https://www.investegate.co.uk/cadence-minerals-plc–kdnc-/rns/approval-of-judicial-restructuring-plan—amapa/201908300700056390K/

Cadence Minerals website: https://www.cadenceminerals.com/

Cadence Minerals plc
+44 (0) 207 440 0647
Andrew Suckling / Chairman
Kiran Morzaria / CEO

Brand Communications
+44 (0) 7976 431608
Alan Green

Cadence Minerals #KDNC – European Metals #EMH Cinovec initial drill results confirm confidence in robustness of ore body & higher than expected tin grades.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the Cinovec Project drilling update published today by European Metals Holdings Limited (“European Metals” or “EMH”). Initial results from its current eight core-hole resource drilling programme announced by the Company on 5 November 2018 confirms that drilling of five of the eight holes has been completed.  Drilling activities have been suspended and will resume after the end of the snow season.  Analytical results for four of the drill holes from the Cinovec South deposit are reported.

Key Points:

  • Resource drill holes CIS-10, CIS-11, CIS-12 and CIS-13 have been completed including analytical reports.
  • Resource drill hole CIS-14 has been drilled with analytical results pending.
    • Hole CIS-11 returned 129.3m averaging 0.51% Li2O, incl. 2m @ 0.93% Li2O, 2m @0.93% Li2O; 5m @ 0.56% Sn and 0.11% W, 5m @ 0.21% Sn, and 7m @ 0.11% Sn.
    • Hole CIS-13 returned 108m averaging 0.45% Li2O and 0.11% Sn, incl. 4m @ 0.99% Li2O; 6m @ 0.29% Sn, 5m @ 0.34% Sn, 3m @ 0.77% Sn and 0.12% W, and 2m @ 1.03% Sn, incl. 1m @ 1.92% Sn.
    • Hole CIS-10 returned 89m averaging 0.47% Li2O, incl. 6m @ 1.02% Li2O and 6m @ 0.91% Li2O; 5m @ 0.26% Sn, 5m @ 0.14% Sn, and 7m @ 0.077% W.
    • Hole CIS-12 returned 93m averaging 0.48% Li2O, incl. 2m @ 1.32% Li2O, 2.4m @ 1.17% Li2O and 3m @ 1.08% Li2O; 8m @ 0.83% Li2O and 0.18% Sn, 4m @ 0.13% Sn, and 5m @ 0.16% W..

Cadence holds approximately 19.1 percent of the equity in European Metals, which, through its wholly owned Subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by the Czech State over Cinovec.

The full release can be found at:https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/EMH/13947894.html

Cadence Minerals CEO Kiran Morzaria commented:“As stated in EMH’s announcement, Cinovec is the largest lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally significant tin resource. To quote EMH CEO Keith Coughlan ‘the initial drill results confirm confidence in the robustness of the ore body and we are particularly encouraged by the higher than expected tin grades in hole CIS-13.’ From the Cadence perspective, and given Cinovec’s strategic significance in the future of the European electric vehicle market, these early results fully validate our investment strategy into this project, and our participation in the recent fundraising. We look forward to further progress and the updated PFS results.”

– Ends –

For further information:

Cadence Minerals plc +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker) +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Hannam & Partners LLP (Joint Broker) +44 (0) 207 907 8500
Neil Passmore
Giles Fitzpatrick
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-LookingStatements:

Certain statements in this announcement are or may be deemed to be forward-lookingstatements. Forward-lookingstatements 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-lookingstatements 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 keypersonnel 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-lookingstatements.

Cadence Minerals #KDNC participates in European Metals #EMH £1m fundraising for Cinovec Lithium project. Live webcast also scheduled.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the update published today by European Metals Holdings Limited (“European Metals” or “EMH”). EMH has today raised gross proceeds (before expenses) of £1,035,500 via a share placing (“Placing”), issuing 5,177,500 new ordinary shares (represented by Chess Depositary interests or “CDIs”) with new and existing investors at an issue price of 20 pence per new ordinary share, representing an approximate 13 percent discount to the EMH closing mid-market price of the ordinary shares on 16 November 2018.

Cadence Minerals Plc subscribed for a total of 250,000 Placing Shares. Following participation in the Placing, Cadence Minerals Plc is now interested in a total of 28,096,470 CDIs representing 19.16% of the enlarged issued share capital of the Company.

The net Placing proceeds will be used to continue to advance EMH’s corporate strategy including:

  • To progress the Company’s drilling programme and upgrade its resource model to include measured resources and facilitate an estimation of proven reserves;
  • Begin the engineering process for a Definitive Feasibility Study;
  • Progress Environmental Impact Assessments for mining and processing;
  • Operate a pilot plant for production of samples for marketing; and
  • Progress discussions with potential strategic partners.

Cadence holds 19.16% of the equity in European Metals, which, through its wholly owned Subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by the Czech State over Cinovec.

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/EMH/13872288.html.

Cadence Minerals CEO Kiran Morzaria commented:“Cinovec is the largest lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally significant tin resource. Given the recent acceleration in the rate of project development and Cinovec’s strategic significance in the future of the European Electric Vehicle market, Cadence Minerals were pleased to support EMH and its CEO Keith Coughlan by participating in the fundraising. We look forward to further progress in the drilling programme.”

Live Webcast

Cadence is pleased to announce the Company will be hosting a live webinar at 10.00am GMT on Monday 10 December. The live webinar details will be circulated in the coming week.

As at the 12 October 2018 Cadence had the following key investments: 19.7% of the equity in European Metal Holdings, which, through its wholly owned Subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by the Czech State over Cinovec; 6.95% of the equity in Bacanora Lithium Plc and 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which forms part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico; 6.6% of Auroch Minerals Ltd; 4.5% of Clancy Exploration Ltd; 12.1% of Macarthur Minerals Ltd; 4% of the San Luis lithium exploration project in Argentina; 30% free carried interest in one mining lease and six exploration license in part of the the Yangibana Rare Earth Mineral deposit and a 100% interest in and exploration license on the eastern boundary of boundaries of Greenland Minerals and Energy Limited’s licences that encompass the world-class Kvanefjeld, Sørenson, Zone 3 and Steenstrupfjeld Rare Earth Element deposits.

– Ends –

For further information:

Cadence Minerals plc +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker) +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Hannam & Partners LLP (Joint Broker) +44 (0) 207 907 8500
Neil Passmore
Giles Fitzpatrick
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.

About Cadence Minerals:

Cadence is dedicated to smart investments for a greener world. The planet needs rechargeable batteries on a global scale – upcoming supersized passenger vehicles, lorries and buses – require lithium and other technology minerals to power their cells. Cadence is helping find these minerals in new places and extracting them in new ways, which will meet the demand of this burgeoning market.

Cadence invests across the globe, principally in lithium mining projects. Its primary strategy is taking significant economic stakes in upstream exploration and development assets within strategic metals. We identify assets that have strategic cost advantages that are not replicable, with the aim of achieving lower quartile production costs. The combination of this approach and seeking value opportunities allows us to identify projects capable of achievinghigh rates of return.

The Cadence board has a blend of mining, commodity investing, fund management and deal structuring knowledge and experience, that is supported by access to keymarketing, political and industry contacts. These resources are leveraged not only in our investment decisions but also in continuing support of our investments, whether it be increasing market awareness of an asset, or advising on product mix or path to production. Cadence Mineral’s goal is to assist management to rapidly develop the project up the value curve and deliver excellent returns on its investments.

Forward-LookingStatements:

Certain statements in this announcement are or may be deemed to be forward-lookingstatements. Forward-lookingstatements 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-lookingstatements 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 keypersonnel 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-lookingstatements.

Cadence Minerals #KDNC – European Metals #EMH reports significant advancements at the Cinovec Lithium & Tin project

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the update published today by European Metals Holdings Limited (“European Metals”) highlighting recent significant advancements made in the development of the Cinovec Lithium-Tin Project (“Cinovec”).

Highlights:

  • Work has commenced on an update of the Preliminary Feasibility Study to model the production of higher value lithium hydroxide due to its increasing use in lithium ion batteries. This study will be finalised later this month.
  • Leach recoveries of 94-95% lithium have been replicated in recently completed confirmatory laboratory scale roasting and water leaching tests in Germany. Locked cycle testwork will commence post the lithium hydroxide study to model the selected route.
  • Licences have been granted for the commencement of geotechnical drilling at Cinovec.

Cadence holds approximately 20% of the equity in European Metals, which, through its wholly owned Subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by the Czech State over Cinovec.

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/EMH/13777367.html

Cadence Minerals CEO Kiran Morzaria commented: “As we have stated previously, the strategic importance of the Cinovec Lithium project as a future supply hub for the European EV and battery industry cannot be overstated.”

“The developments announced today by Keith Coughlan and the European Metals team keeps the project aligned with Czech and European industry requirements for lithium product, and also provides a significant improvement to Cinovec economics.” 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

– Ends –

For further information:

Cadence Minerals plc

+44 (0) 207 440 0647

Andrew Suckling

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)

+44 (0) 207 220 1666

James Joyce

James Sinclair-Ford

Hannam & Partners LLP (Joint Broker)

+44 (0) 207 907 8500

Neil Passmore

Ingo Hofmaier

 

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.

About Cadence Minerals:

Cadence is dedicated to smart investments for a greener world. The planet needs rechargeable batteries on a global scale – upcoming supersized passenger vehicles, lorries and buses – require lithium and other technology minerals to power their cells. Cadence is helping find these minerals in new places and extracting them in new ways, which will meet the demand of this burgeoning market. 

Cadence invests across the globe, principally in lithium mining projects. Its primary strategy is taking significant economic stakes in upstream exploration and development assets within strategic metals. We identify assets that have strategic cost advantages that are not replicable, with the aim of achieving lower quartile production costs. The combination of this approach and seeking value opportunities allows us to identify projects capable of achieving high rates of return. 

The Cadence board has a blend of mining, commodity investing, fund management and deal structuring knowledge and experience, that is supported by access to key marketing, political and industry contacts. These resources are leveraged not only in our investment decisions but also in continuing support of our investments, whether it be increasing market awareness of an asset, or advising on product mix or path to production. Cadence Mineral’s goal is to assist management to rapidly develop the project up the value curve and deliver excellent returns on its investments.

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.

Hannam & Partners – Cadence Minerals #KDNC – Updating valuation as portfolio climbs the development curve

Cadence Minerals – Updating valuation as portfolio climbs the development curve

Portfolio Progressing Towards Value Creation

Cadence is an investment company with a focus on lithium and other new technology metals. Cadence’s strategy in a crowded space is to gain exposure to projects which have strategic cost advantages and can be rapidly moved up the development value curve. Cadence’s core holdings are: a 20.4% stake in European Metal Holdings (AIM:EMH), which operates the Cinovec lithium/tin project in the Czech Republic; a 7% stake in Bacanora Lithium (AIM:BCN), which operates the Sonora Lithium project in Mexico; and a 30% interest in the Yangibana Rare Earth Project, located in Western Australia, with the remaining 70% held by ASX-listed Hastings Technology Metals Limited (ASX:HAS). In the last 6 months, Cadence’s portfolio projects have seen a number of significant developments, as they move towards production and value creation for shareholders.

Core projects getting closer to production

Q4 2017 saw the completion of bankable feasibility studies (BFS) at both the Sonora and Yangibana projects. The Sonora BFS showed a two-stage project with an up front capital cost of US$420m and a post-tax IRR of 21.2% at a Lithium Carbonate price of $11,000/tonne, while the Yangibana BFS outlined a capital cost of US$260m and an impressive IRR of 78%. Industry groups have shown support for both projects through off-take agreements and equity investments in the case of Sonora. Cinovec is currently moving towards completion of a BFS, with a particular focus on the metallurgical optimisation program, which has so far showed significantly improved lithium leaching recoveries with a small increase in roasting temperatures.

Next Steps / Catalysts – projects moving closer to production

Sonora and Yangibana are currently at similar stage of development, preparing for construction financing. In our view, news of such financing is likely to act as a catalyst for share price re-rating of Cadence Minerals as well as the project operators, Bacanora and Hastings Technology Metals. The BFS underway at the earlier stage Cinovec project, operated by European Metal Holdings, is expected to be completed in H2 2018. With potential cost savings from processing flowsheet optimisation, there is scope to improve on the economics of the project’s pre-feasibility study, which could act as another catalyst for Cadence shares, in our view.

Valuation

We update our Cadence valuation for the Sonora BFS results, our updated lithium price deck and updated implied valuations for public market holdings in the Cadence portfolio. We arrive at a sum of the parts valuation for Cadence’s assets of US$169.1m. Applying our NPV multiples to the Company’s operations we generate a valuation of GBp 0.87/sh, implying 277% upside to the current price.

Link here to view the full Hannam & Partners article

Cadence Minerals #KDNC – European Metals #EMH Cinovec Lithium Carbonate Production Modelled to Increase to 22,500 TPA

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is greatly encouraged to note the results of roast optimization tests conducted by European Metals Holdings (AIM: EMH) at the Cinovec Lithium-Tin project in the Czech Republic. EMH stated today that improved recoveries have resulted in increased lithium carbonate production to 22,500tpa.

Highlights:

  • Average lithium carbonate production increased from 20,800 tpa to 22,500 tpa due to improved recoveries in the leach circuit of 94% being modelled.
  • Increased lithium production results in increased cash margins of approximately 10%
  • Low cost waste gypsum from local power plants now utilized as a roasting reagent is a significant positive environmental outcome for the region and a reagent cost benefit to the project.
  • Locked cycle testing and larger scale roasting technology confirmation work to commence imminently.
  • Preparation of 3 tonnes of lithium concentrate via magnetic separation for lithium carbonate pilot plant trials almost complete.

In addition, Cadence also notes comments from European Metals MD Keith Coughlan, regarding recent political developments within the Czech Republic and the imminent formation of a coalition government. The EMH board looks forward to engaging with the new Government to advance the project to the benefit of all stakeholders.

Cadence owns approximately 20% of the equity in European Metals Holdings.

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/EMH/13712961.html

Cadence CEO Kiran Morzaria commented: “The strategic importance of the Cinovec Lithium project as a future supply hub for the European EV industry cannot be overstated.”

“That the optimisation tests conducted by European Metals are already showing a significant improvement in Lithium recovery and increased cash margins is not only great news for the EV industry but could in future help to meet any lithium supply shortfall if, as we expect, there is a sustained increase in demand.”

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information:

Cadence Minerals plc

+44 (0) 207 440 0647

Andrew Suckling

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)

+44 (0) 207 220 1666

James Joyce

James Sinclair-Ford

Hannam & Partners LLP (Joint Broker)

+44 (0) 207 907 8500

Neil Passmore

Giles Fitzpatrick

Square1 Consulting

+44 (0) 207 929 5599

David Bick

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.

About Cadence Minerals:

Cadence is dedicated to smart investments for a greener world. The planet needs rechargeable batteries on a global scale – upcoming supersized passenger vehicles, lorries and buses – require lithium and other technology minerals to power their cells. Cadence is helping find these minerals in new places and extracting them in new ways, which will meet the demand of this burgeoning market. With over £30 million vested in key assets globally, Cadence is helping us reach tomorrow, today. 

Cadence invests across the globe, principally in lithium mining projects. Its primary strategy is taking significant economic stakes in upstream exploration and development assets within strategic metals. We identify assets that have strategic cost advantages that are not replicable, with the aim of achieving lower quartile production costs. The combination of this approach and seeking value opportunities allows us to identify projects capable of achieving high rates of return.

The Cadence board has a blend of mining, commodity investing, fund management and deal structuring knowledge and experience, that is supported by access to key marketing, political and industry contacts. These resources are leveraged not only in our investment decisions but also in continuing support of our investments, whether it be increasing market awareness of an asset, or advising on product mix or path to production. Cadence Mineral’s goal is to assist management to rapidly develop the project up the value curve and deliver excellent returns on its investments.

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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