Home » Cadence Minerals (KDNC) » Cadence Minerals #KDNC – Proposed Placing

Cadence Minerals #KDNC – Proposed Placing

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO . 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED (“UK MAR”) . UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN .

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX TO THIS ANNOUNCEMENT, AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FORRELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX TO THIS ANNOUNCEMENT, IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.  THIS ANNOUNCEMENT AND THE APPENDIX DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF CADENCE MINERALS PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY . IN PARTICULAR, YOU SHOULD READ AND UNDERSTAND THE INFORMATION PROVIDED IN THE APPENDIX WHICH CONTAINS THE TERMS AND CONDITIONS OF THE PLACING .

02 February 2022

Cadence Minerals Plc Proposed Placing

Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to announce that it has launched a placing (“Placing”), to raise approximately £3.5million through the Placing of new ordinary shares (“Placing Shares”) in the capital of the Company to new and existing investors at an issue price of 20.5 pence per share (“Placing Price”).

The Placing Price represents a discount of approximately 17.1 per cent. to the closing price of 24.75 pence per ordinary share on 1 February 2022, being the latest practicable business day prior to the publication of this Announcement.

The Placing is subject to the terms and conditions set out in the Appendix to this Announcement.

Cadence intends to use the net proceeds of the Placing to invest further in the Amapa Iron Ore Project (“Amapa Project” or “Amapa”) increasing its stake to 27 per cent., as announced on 29 December 2021. The funds invested in the Amapa Project will primarily be used to progress the pre-feasibility studies, the remaining net proceeds of the Placing will be used for Cadence to continue to pursue its investment strategy and for general working capital purposes.

Funding Details

The Company has entered into a placing agreement (“Placing Agreement”) with WH Ireland Limited (“WH Ireland”) pursuant to which terms WH Ireland agreed to arrange the Placing. The Company has given certain customary warranties and indemnities under the Placing Agreement in favour of WH Ireland. Completion of the Placing is subject to the satisfaction of the conditions contained in the Placing Agreement including, but not limited to, Admission.

Your attention is drawn to the detailed terms and conditions of the Placing set out in the Appendix to this Announcement (which forms part of this Announcement).

The Appendix to this Announcement contains the detailed terms and conditions of the Placing and the basis on which investors agree to participate in the Placing. The Placing has not been underwritten by WH Ireland. Placees are deemed to have read and understood this Announcement in its entirety, including the Appendix, and to have made their offer on the terms and subject to the conditions contained herein and to have given the representations, warranties, undertakings and acknowledgements contained in the Appendix to this Announcement.

The Placing Shares will be issued, credited as fully paid, and will rank pari passu with the existing Ordinary Shares in issue in the capital of the Company, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of such shares after the date of their issue.

The Company is mindful of its existing shareholders and wants to give shareholders the opportunity to invest on the same terms as those who have participated in the Placing. Consequently, the Company will shortly be sending a circular to shareholders setting out the terms of an open offer, which will allow existing qualifying shareholders the ability to subscribe for further shares at the Placing Price pro-rata to their existing holdings (the “Open Offer”) up to a maximum number of shares to be detailed in the circular.

Admission and Settlement

Application will be made for the admission to trading on the AIM market (“AIM”) of London Stock Exchange plc (“LSE”) and to the AQSE Growth Market (“AQSE”) operated by Aquis Stock Exchange Limited for the Placing Shares (“Admission”). Admission is expected to occur at 8.00 a.m. on or around 10 February 2022. There are no shares held in treasury.

About the Amapa Project

The Amapa Project commenced operations in December 2007 with the first production of iron ore concentrate product of 712 kt in 2008.  In 2008, Anglo American (70%) and Cliffs (30%) acquired the Amapa Project in 2008 as part of a larger package of mining assets in Brazil.

Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012.  During this period, Anglo American reported operating profits from its 70% ownership in the Amapa Project of US$ 120 million (100% US$ 171 million) and US$ 54 million (100% US$ 77 million). Before its sale in 2012, Anglo American valued its 70% stake in the Amapa Project at US$ 866 million (100% US$ 1.2 billion). It impaired the asset in its 2012 Annual Accounts to US$ 462 million (100% US$ 660 million).

DEV filed for judicial protection in August 2015 in Brazil, and mining ceased at the Amapa Project. A judicial order in early 2019 offered investors and creditors the opportunity to file a revised JRP. Cadence and Indo Sino filed a conditional JRP, which creditors approved in August 2019. Cadence, Indo Sino and DEV have continued to develop the Amapa Project and satisfy the conditions of the JRP.

Cadence updated the Mineral Resource Estimate on 2 November 2020, increasing the MRE by 21%. The current MRE contains a Mineral Resource of 176.7 million tonnes grading 39.7% Fe in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.

Cadence Amapa Project Stake

As mentioned on 29 December 2021, the Company entered into a binding settlement agreement (“Settlement Agreement”) with the secured bank creditors of DEV Mineraço S.A. (“DEV”), the owner of the Amapa Project in Brazil. The execution of the Settlement Agreement represents the last major precondition for Cadence to vest its initial US$ 2.5m for 20% of the large-scale Amapa iron ore mine, beneficiation plant, railway and private port. Anglo American, a previous owner had valued its 70% stake in the Amapa Project at US$ 866 million (100% US$ 1.2 billion). It impaired the asset in its 2012 Annual Accounts to US$ 462 million (100% US$ 660 million).

The parties to the agreement are now completing and filing the required contractual and regulatory documentation which will crystallise the Cadence and Indo Sino Trade Pte. Ltd. (“Indo Sino”) joint venture company’s 100% ownership of DEV and the Amapa Project.

The agreement with our joint venture partner, Indo Sino Pty Ltd, is to invest in and acquire up to  27% of a joint venture company Pedra Branca Alliance Pte. Ltd. (“JV Co”).  On Completion and registration of the Settlement Agreement the equity of DEV will be transferred to the JV Co, at which point it will own 99.9% of the Amapa Project.

To acquire its 27% interest, Cadence will invest US$ 6 million over two stages in JV Co. 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.

For further information on the Company, please visit   www.cadenceminerals.com or contact:

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 / Darshan Patel

Harry Ansell / Daniel Bristowe

Novum Securities Limited (Joint Broker)

+44 (0) 207 399 9400

Jon Belliss

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as “believe” “could” “should” “envisage” “estimate” “intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the 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.

Link here for the full placing announcement and documents


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