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Cadence Minerals #KDNC – Investment Update

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to update shareholders on the progress of its principal investments.

Highlights:

  • Completion of Amapa Ore Reserve Estimate supports planned 15-year mine life
  • Cadence increases Amapa stake to 30% through conversion of loans, capitalisation of management, consultancy, admin and cash investment. No additional capital raising required.
  • European Metals Holdings (“EMH”) reports significant developments with the Cinovec Lithium Chemical Plant (“LCP”) extraction process, which is expected to is expected to reduce both Capex and Opex in the LCP by 10-20%.
  • Following the sale of stakes in Lithium Technologies and Lithium Supplies (“LT & LS”), Evergreen Lithium Pty Ltd is progressing with its listing on the Australian Stock Exchange.
  • Following the sale in working interests in the Yangibana Rare Earths project (“Yangibana”) tenements to Hastings Technology Metals (ASX: HAS), we expect various regulatory approvals to be completed by the end of the year.

Cadence CEO, Kiran Morzaria, commented: “I am delighted to report that we have taken several significant steps forward with our flagship Amapa project. The decision to convert loans and other costs into an increased stake in Amapa was almost a formality following successful completion of the ORE and the consequential progress with the PFS. With the steady increase in project value, your board are genuinely excited at the development prospects of Amapa.” 

I look forward to reporting further progress across all our projects in the coming months.”

Amapa Iron Ore Project (“Amapa” or the “Project”)

Cadence announced in early October the completion of an upgraded and increased Mineral Resource Estimate (“MRE”). The Measured and Indicated portion of this MRE has been used to calculate the Ore Reserve Estimate (“ORE”). The ORE represents the economically mineable part of a Measured and Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by our Pre-Feasibility Study (“PFS”).

We are happy to report that the ORE has been completed, and the results support the planned 15-year mine life. The JORC 2012 compliant statement and supporting disclosures will form part of the PFS publication, which is still scheduled for publication this quarter.

Given the excellent progress at Amapa and the economics of the asset, Cadence intends to increase its stake from 27% to 30% while still retaining its previously announced first right of refusal to acquire 49% of the asset.

Cadence will earn this additional three per cent via the conversion of loans that the Company has made to the Project, the capitalisation of management, consultancy and other admin cost and further cash investment in the Project. The total value of these three items is approximately US$3.3 million. Cadence requires no additional capital raising to increase its stake

Once complete, Cadence will have acquired 30% of Amapa for approximately US$9.3 million. Anglo-American valued its 70% stake in Amapa at US$ 462 million (100% US$ 660 million).

European Metals Holdings (“EMH”)

EMH has announced significant developments in the processing flowsheet for the Cinovec vertically integrated battery metals project (“Cinovec”) in the Czech Republic.

Highlights

  • The simplified Lithium Chemical Plant (“LCP”) extraction process has delivered exceptionally clean battery-grade lithium carbonate
  • LCP has the capability to deliver very high-purity lithium hydroxide, lithium carbonate, lithium sulphate or lithium phosphate
  • The simplified process is expected to reduce both Capex and Opex in the LCP by 10-20%.
  • LCP recoveries of 88-93% lithium proven in locked-cycle testwork, an outright recovery improvement of 3-6% over locked-cycle testwork for earlier, more complex flowsheet
  • LCP pilot programme to commence in 4Q CY22 with marketing samples available to offtake partners in 1Q CY23; pregnant leach solution containing 48kg of lithium carbonate equivalent is ready to be processed

Link here for the full EMH announcement: https://www.investi.com.au/api/announcements/emh/a4072882-271.pdf

Other Investments

In July 2022, Cadence sold its 31.5% stake in Lithium Technologies and Lithium Supplies (“LT & LS”) to Evergreen Lithium Pty Ltd (“Evergreen”). This was for an initial consideration of AS$3.16 million (£1.81 million)in Evergreen shares, with a further AS$6.63 million (£3.80 million) due in Evergreen equity on the achievement of certain performance milestones Evergreen is progressing with its listing on the Australian Stock Exchange. We anticipate that this will be completed by the end of this year.

The full announcement concerning the LT & LS sale is available here.

In June 2022, Cadence entered into a binding agreement to sell its working interests in the Yangibana Rare Earths project (“Yangibana”) tenements to Hastings Technology Metals (ASX: HAS) (“Hastings”) for A$9 million (£5.1 million) to be satisfied by the issue of fully paid ordinary Hastings shares. Cadence’s 30% interest in tenements covers a small portion of Yangibana and potentially represents one year of the 16-year mine life. Cadence and Hastings are awaiting various regulatory approvals, and we anticipate that this will be completed by the end of the year.

The full announcement concerning the Yangibana sale is available here

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

 

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.

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.

New UK Investor Magazine Podcast – UK housing and Barratt Development #BDEV, Brazil iron ore and Cadence Minerals #KDNC plus Dekel Agrivision #DKL

investoru

Alan Green joins the UK Investor Magazine Podcast to discuss the latest instalment of UK economy news and three UK equities.

Companies covered:

  • Barratt Developments (LON:BDEV)
  • Cadence Minerals (LON:KDNC)
  • Dekel Agri-Vision (LON:DKL)

Barratt Developments shares fell over 7% on Wednesday morning after the housebuilder released a gloomy outlook for the rest of the year. We discuss their results and the overall housing market.

Cadence Minerals’ flagship Amapa iron ore project in Brazilian is making progress and moving towards production. Alan updates on their latest developments and key fundamentals.

We finish with a look at African palm oil producer Dekel Agri-Vision.

Barratt Developments, the UK Economy, and Brazilian Iron Ore with Alan Green

Cadence Minerals #KDNC – Interview with Kiran Morzaria direct from Santana, Brazil

Alan Green talks to Cadence CEO Kiran Morzaria direct from Santana Port, Brazil. Today, Cadence has announced a substantial upgrade in total Measured, Indicated and Inferred Mineral Resources, to 276.24 Million Tonnes at a grading of 38.33% Fe at the Amapa iron ore project. Valued by former owner Anglo American at $600m in 2012, an investment of just $6m has seen Cadence acquire a 27% stake in the project, with an option to increase to 49%. Kiran explains how this upgrade contributes to the current ongoing pre-feasibility study, and the steps the company needs to take to bring Amapa back into production. We look at potential revenue forecasts for the fully recommissioned mine, and how important it is for the region in regard to employment, health and education. Kiran then covers the lithium and rare earth investment returns from Australia, and in particular the Yangibana Rare Earths project, plus the Sonora and Cinovec Lithium project investments. We finish with a look at upcoming news, plus Kiran comments on the market valuation vs. assets.

Cadence Minerals #KDNC – Mineral Resource Increase & Upgrade at the Amapá Iron Project

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 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

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, Al2O3, SiO2, 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), 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
Tonnage
(Mt)
Fe

(%)

SiO2(%) Al2O3(%) P

 (%)

Mn (%)
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

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

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

 

Al2O3 Aluminium oxide is a chemical compound of aluminium and 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 tube, called a 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 asthe 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 that belongs to the first transition series and group 8 of the periodic table. It is by mass the most common element on Earth, right in front of oxygen (32.1% and 30.1%. respectively), forming much of Earth’s outer and inner core. It is the fourth most common element in the Earth’s 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 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 Fe2O3;
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 unit is a description of its physical characteristics visible at outcrop, in hand or core samples, 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 in nature; it is often found in minerals in combination with 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 of cash outflows over a period of time. NPV is used in capital budgeting 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” to determine areas within the Project that require more attention. Pre-Feasibility studies are done by factoring known unit costsand 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%;
SiO2 Silicon dioxide, also known as silica, is an oxide of silicon most commonly found in nature as quartz and in various living organisms. In many parts of the world, silica is the major constituent of sand.
Strike This is the direction of the line formed by the intersection of a fault, 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.

Cadence Minerals #KDNC – Interim Results for six months ended 30 June 2022

Cadence Minerals plc (AIM/AQX: KDNC) is pleased to announce its interim results for the six months ended 30 June 2022.

OVERVIEW

The Company’s goals for the six months ended 30 June 2022 were first to vest our 27% in the Amapa Iron Ore Project (“Amapa Project”), secondly to progress the development of Amapa and advance the Pre-Feasibility Study (“PFS”) and lastly to create capital growth in our passive private investments via a sale either in cash or a swap into liquid equity. I am pleased to report the Company was successful in all of the above goals.

The first goal was met in the first quarter of this year. After successfully reaching an agreement to vest its 20% at the end of December 2021, Cadence increased its stake in the Amapa Project to 27% in March 2022; the consideration for the additional 7% was US$3.5 million. The funding was used to achieve our second goal, which was to advance the PFS. Although PFS work commenced in 2021, the March investment fully funded the remainder of the PFS study. The current expectation is that in Q4, we will publish an updated Mineral Resource Estimate (“MRE), followed by an Ore Reserve Estimate (“ORE”) and, finally, the publication of the PFS.

The final goal was achieved via two asset sales; firstly, our 31.5% interests in Lithium Technology Pty Ltd and Lithium Supplies Pty Ltd (“LT and LS”) were sold to Evergreen Lithium and secondly, our 30% interest in licenses within the Yangibana Rare Earth Project (“Yangibana Project”) were sold to owner/operator Hastings Technology Metals. In both cases, Cadence agreed to vend these assets for equity in companies that are either listed or are expected to be listed.

Cadence has invested approximately £1.7 million in these assets, and our sale price into the equity of the two public companies was the equivalent of £5.5 million, representing a 321% cumulative return on our investments. The Yangibana sale is not reflected in the interim financial statements as it has not yet been completed. However, we expect that both the Yangibana Project transactions and the IPO of Evergreen Lithium will complete this year, hopefully further increasing our returns.

In contrast to these accomplishments, the macroeconomic environment has been generally negative. This has been dominated by the war in Ukraine and the devastating humanitarian consequences that have followed. The European war is the most serious crisis in decades, and food security and energy needs have emerged as significant concerns. We now live in a world of increased macro volatility, with central banks battling a problematic trade-off between soaring inflation and managing a fragile economic recovery in the aftermath of the COVID-19 pandemic.

Despite this challenging backdrop, the lithium and rare earth sectors have remained positive, with pricing in both products remaining robust. This demand continues to be driven by the electrification of our transport systems and the continued undersupply of feedstock. Despite some commentators suggesting otherwise, the oversupply of lithium is not imminent; we still see a market deficit going forward for the same structural reasons that we saw in 2018 when some of the same market commentators forecasted an oversupply of feedstock.

Within the iron ore market, we have seen the impacts of a global slowdown, with the 62% Fe Platts index dropping from US$125 per dry metric tonne (“dmt”) to circa US$ 100 / dmt. Both short and longer-term prospects for iron ore are driven by China, given the nation is the world’s biggest steel producer and currently buys about 70% of global seaborne iron ore. As policy support gains traction, we expect China to emerge as a source of stability for iron ore demand. This is contingent on Beijing implementing successful and timely stimulus measures, limited COVID lockdowns, and a shallow global slowdown that limits monetary tightening.

The overall negative macro environment weighed down on our public portfolio, with the AIM Basic Resources Index down some 30% over the period and European Metals Holdings (“EMH”), our largest public equity position, decreasing in value by some 47% during the reporting period. 

We are cautiously optimistic despite the macroeconomic headwinds. Recent indications point to a recovery in China’s growth momentum in the second half of the year, with cities reopening and government policy stimulus helping. In mined commodity markets, supply and demand are generally tight, and prices appear well supported. The transition to net zero carbon emissions will continue to open up investment opportunities in companies that serve the associated supply chains.

As outlined in our annual report and accounts, Cadence operates an investment strategy that includes investments in private projects via a private equity model and investments in public equity. In both investment classes, we take either an active or passive role. We have reported on each category below.

PRIVATE INVESTMENTS, ACTIVE

The Amapa Iron Ore Project, Brazil

Interest – 27%  at 30/06/2022 

The Amapa Project is a large-scale iron open pit ore mine with associated rail, port and beneficiation facilities that 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. Before its sale in 2012, Anglo American valued its 70% stake in the Amapa Project at US$462m (100% US $660m). 

In 2019 Cadence entered into a binding investment agreement to invest in and acquire up to 27% in the Amapa iron ore mine, beneficiation plant, railway and private port owned by DEV (“The Agreement”). The Agreement also gave Cadence a first right of refusal to increase its stake to 49%. To acquire its 27% interest, Cadence invested US$6 million over two stages in a joint venture company (“JV”). The first stage is for 20% of the JV, the consideration for which was US$2.5 million. The second stage was completed in March 2022 for a further 7% of the JV for a consideration of US$3.5 million.

During the reporting period, the two key operational priorities were: 

1.   Progressing the permitting pathway, including the regularisation of the mining concessions, tailing storage facilities and the environmental permits.

2.   Advancing the PFS, which commenced in 2021, and progressed in earnest once the second stage funding from Cadence vested.

At the time of writing, the PFS is progressing well with all the mineral processing and logistic studies completed and costed. The updated MRE and ORE are both due for completion in October 2022.

The PFS contemplates refurbishing and rehabilitating the existing port, rail and plant with modifications being made to the beneficiation plant to achieve a larger portion of 65% iron concentrate (4.9 Mt). The PFS is based on producing 5.3 Mt of iron ore concentrate per annum. The PFS, once complete, will outline more fully the development timelines and capital required to achieve the stated project aims. After the publication of an economic PFS, we expect DEV will seek to commission a Definitive Study (“DFS”). The DFS is required to seek project debt and equity finance, which will be sought once the DFS is complete.

PRIVATE INVESTMENTS, PASSIVE

Evergreen Lithium Limited

Interest – 13.16% at 30/06/2022

During the reporting period, Cadence and the shareholders of LT and LS completed the sale of 100% of LT and LS to Evergreen PTY Ltd (“Evergreen”). Evergreen is an unlisted public company in Australia that has been incorporated explicitly to acquire lithium assets. The acquisition of LT and LS is its first acquisition. Evergreen raised AS$ 6 million to pursue this strategy and now plans to list on the Australian Stock Exchange. 

The consideration for LT and LS is up to A$ 21.05 million (£12.79 million). Cadence had 31.5% of LT and LS and will receive up to A$ 6.63 million (£4.02 million). The initial consideration that has been paid is AS$3.16 million (£1.92 million) in Evergreen shares, or 15,830,136 shares at A$0.20 per share, representing 13.16% of Evergreen.

Subject to performance milestones being achieved (found here), an additional AS$3.47 million (£2.10 million) will be paid in Evergreen shares. If the performance targets are met, the total consideration for Cadence’s equity stake in LT and LS would be AS$6.63 million (£3.80 million). 

As a result of the acquisition, Evergreen, through its subsidiaries, are the holder of two exploration licenses in the Northern Territory, one granted and one in the application phase. LT and LS further hold seven exploration license applications in Argentina.

All of the licenses and applications target potential hard rock lithium deposits. The most significant of these is the Litchfield lithium prospect, which is contiguous to Core Lithium’s (ASX: CXO) strategic Finniss Lithium Project (JORC compliant ore reserves: 7.4Mt @ 1.3% Li2O). Evergreen has committed to spending at least A$4 million on the exploration of Litchfield during the three years post the completion of the sale.

Cadence’s total investment in the LT & LS was £0.81 million. The Company has received £1.92 million as an initial consideration and, subject to project milestones, will receive a further £2.1 million. This represents a 159% return on the initial consideration and a 395% return on the cumulative consideration.

Yangibana Project, Australia

Interest – 30% at 30/06/2022

The Yangibana Project is a significant Australian Rare Earths Project, containing substantial Neodymium and Praseodymium resources. The Yangibana Project currently covers approximately 650 square kilometres containing some 9 Mining Leases, 2 Prospecting Licenses and 19 Exploration Licenses. Cadence holds a 30% interest in 3 Mining Leases and 6 Exploration licenses. These tenements contain 0.70 million tonnes of Ore Reserves, which can increase the expected mine life of the Yangibana Project by approximately one year to a total of 16 years. 

In June 2022, Cadence entered into a binding agreement to sell its working interest in the leases to Hastings Technology Metals (ASX: HAS) (“Hastings”), the current owner and operator of the Yangibana Project.

The interests will be sold for A$9.0 million (£5.45 million) to be settled by the issue of fully paid ordinary shares in Hastings at a price to be determined based on 30 days VWAP before completion, which is set at six months from the date of signing of this agreement. 

Hastings has commenced site construction and is planning to begin commissioning the beneficiation plant in late 2023, delivering maiden production to key customers in 2024.

In February of this year, Hastings published a revised NPV calculation, which increased the NPV by 84% to AS$ 1 billion. Hastings’s current market capitalisation is circa A$ 415 million. Also, in February, the Australian Government’s Northern Australia Infrastructure Facility (NAIF) approved a $140 million loan facility to Hastings and Yangibana, making it the first Australian rare earth project to receive NAIF funding.

Cadence’s total investment in the Leases was £0.90 million. Subject to the completion of the sale, we will receive approximately £5.45 million in Hasting shares, representing a 502% return on our investment. 

Sonora Lithium Project, Mexico

Interest – 30% at 30/06/2022

Cadence holds an interest in the Sonora Lithium Project via a 30% stake in the joint venture interests in each of Mexalit S.A. de CV (“Mexalit”) and Megalit S.A. de CV (“Megalit”).

Mexalit forms part of the Sonora Lithium Project. The Sonora Lithium Project consists of ten contiguous concessions covering 97,389 hectares. Two of the concessions (La Ventana, La Ventana 1) are owned, as of the date, 100% by subsidiaries of Gangfeng Lithium Co., Ltd (“Gangfeng”). El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions are owned by Mexalit S.A. de C.V. (“Mexalit”), which is owned 70% by Gangfeng and 30% by Cadence.

The Sonora Project holds one of the world’s largest lithium resources and benefits from being both high-grade and scalable. The current lithium resources and reserves for the Sonora Lithium Project and the amounts attributable to Cadence are available on our website here:

https://www.cadenceminerals.com/projects/sonora-lithium-project/.

A feasibility study report was published in January 2018. The report estimated a pre-tax project net present value of US$1.253 billion at an 8% discount rate, an Internal Rate of Return of 26.1% and Life of Mine operating costs of US$3,910/t of lithium carbonate. It should be noted that under the published feasibility study, the concession owned by Mexalit will be mined starting in year 9 of the mine plan, ceasing at the end of the mine life in year 19.

In 2021, Mexican politicians from the MORENA party tabled a draught bill to reform Mexico’s energy sector, including statements that lithium would be included among the minerals considered strategic for the energy transition and that no new concessions for lithium exploitation by private companies could be granted. Subsequent to the year-end, the Mexican senate elevated lithium deposits to the category of “strategic minerals”, declaring lithium’s exploration, exploitation, and use as the state’s exclusive right. 

We are constantly examining possible legislative changes, and Gangfeng is ensuring that the mineral concessions remain legitimate. It is our current view that the Decree passed by the senate only impacts licenses, concessions, or contracts to be granted, NOT already those already granted, as is the case for the Sonora Lithium Project. Therefore, at this point, we do not believe there is a material impact on our joint venture areas.

PUBLIC EQUITY 

The public equity investment segment includes active and passive investments as part of our trading portfolio. The trading portfolio consists of investments in listed mining entities that the board believes possess attractive underlying assets. The focus is to invest in mining companies that are significantly undervalued by the market and where there is substantial upside potential through exploration success and/or the development of mining projects for commercial production. Ultimately, the aim is to make capital gains in the short to medium term. Investments are considered individually based on various criteria and are typically traded on the TSX, ASX, AIM or LSE.

During the period, our public equity investments generated an unrealised loss of £5.26 million (6 months ended 30 June 2021: a profit of £3.12 million) and a realised gain of £1.11 million (6 months ended 30 June 2021: £0.42 million). The majority of these profits were derived from the sale of European Metals Holdings shares. The total return on investment for the Cadence equity portfolio as of 28 September 2022 was 407%, or £9.95 million. 

As of 30 June 2022, our public equity stakes consisted of the following:

 

Company

Business Summary

30-Jun-22

31-Dec-21

30-Jun-21

31-Dec-20

£,000

£,000

£,000

£,000

European Metals Holding Ltd

Lithium mine development

5,357

11,287

14,180

13,426

Charger Metals NL

Lithium exploration

196

342

109

Macarthur Minerals Ltd

Iron Ore mine development

103

181

327

329

Eagle Mountain Mining Ltd

Copper exploration

47

122

153

Mont-Royal Resources Ltd

Gold and Copper exploration

39

35

Celsius Resources Ltd

Gold and Copper exploration

103

Miscellaneous

Various

5

7

6

6

Total

5,747

11,974

14,878

13,761

 

FINANCIAL RESULTS: 

During the period, the Group made a loss before taxation of £5.05 million (6 months ended 30 June 2021: profit of £2.84 million, year ended 31 December 2021: loss of £0.14 million). There was a weighted basic loss per share of 3.136p (30 June 2021: profit 2.009p, 31 December 2021: loss 0.102p). During the second half of the year, the Directors expect the results to reflect the approximately £4.2m profit from the sale of the Group’s Yangibana Joint Venture Interest. 

The total assets of the Group decreased from £23.01 million at 31 December 2021 to £21.93 million. Of this amount, the decrease of £6.23 million represents the market value of our current investments at the period end, plus there was an increase in our non-current investments of £3.30m.

During the period our net cash outflow from operating activities was £1.65 million, gross proceeds of £4.9m were raised through the issue of new shares and our net cash position ended the period up £1.66 million at £1.99 million. 

Kiran Morzaria

Director

28 September 2022

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

For further information:

 

Cadence Minerals plc

+44 (0) 20 3582 6636

Andrew Suckling

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)

+44 (0) 20 7220 1666

James Joyce

Darshan Patel

Cadence Minerals #KDNC – Result of AGM

Cadence announces that at the Annual General Meeting of the Company held today, all resolutions put to shareholders were duly passed.

Result of the votes for each of the resolutions will be available on the Company’s website:https://www.cadenceminerals.com/investors/general-meetings/

– Ends –

  For further information:

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

 

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.

Cadence Minerals #KDNC – Director Share Purchases

Cadence (AIM/NEX: KDNC), the mining investment company, announces that on the 11 July 2022 the following director purchased ordinary shares in the Company. 

Director

Position

Number of ordinary shares acquired

Price paid per share (£)

Kiran Morzaria

Director & CEO

100,558

0.099

 

After this acquisition the total notifiable share interest in the Company for the directors is as follows

 

Director

Position

Total holding of ordinary shares

Kiran Morzaria

Director & CEO

1,426,980

Donald Strang

Finance Director

957,545

Andrew Suckling

Non-Executive Chairman

381,602

Adrian Fairbourn

Non-Executive Director

731,005

 

– Ends –

Cadence Minerals plc

                                                        +44 (0) 20 3582 6636

Andrew Suckling

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)

                                                     +44 (0) 207 220 1666

James Joyce

Darshan Patel

 

 

 

 NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM

1

Details of the person discharging managerial responsibilities/person closely associated

a)

Name

Kiran Morzaria

2

Reason for the notification

a)

Position/status

Director & CEO

b)

Initial notification/ Amendment

Initial notification

3

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name

Cadence Minerals PLC

b)

LEI

213800TUZWG9C2GRNO58

4

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument

 

Identification code

Ordinary Share

 

 

GB00B067JC96

b)

Nature of the transaction

Share Purchase, Share Incentive Scheme

c)

Price(s) and volume(s)

Price(s)

Volume(s)

£0.099

100,558

d)

Aggregated information

–      Aggregated volume

–      Price

 

100,558

£0.099

 

e)

Date of the transaction

11/07/2022

f)

Place of the transaction

XLON, AIM

 

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended (“MAR”). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Cadence Minerals PLC #KDNC – Notice of AGM

 

Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to confirm that it has posted the notice of the 2022 AGM and forms of proxy to registered shareholders. The AGM will be held at 11 am 10 August 2022 at the offices of Hill Dickinson LLP, The Broadgate Tower, 8th Floor, 20 Primrose Street, London, EC2A 2EW.

Shareholders are therefore strongly encouraged to exercise their AGM voting rights by submitting the proxy form attached with the AGM notice. The deadline for submission of proxies to the Registrar is 11 a.m. on 8 August 2022 or 48 hours before any adjourned meeting. You are strongly advised to appoint the chairman of the meeting as your proxy to ensure your vote is counted.

 The Circular and notice of AGM is available at: https://www.cadenceminerals.com/investors/aim-rule-26/  

 The result of the AGM will be announced shortly after its conclusion and published on the Company’s website.

 

#KDNC Cadence Minerals – Vox Market host an investor presentation and Q&A with Cadence CEO Kiran Morzaria

Kiran talks about:

~ Amapa ironore project, PFS, shipping, stockpiles etc

~ Yangibana rareearths

~ Lithium Technologies / Supplies & Sonora

~ investment returns & markets

Listen to the interview here

Alan Green discusses Imperial Brands #IMB, On The Beach #OTB & also discussed Cadence Minerals #KDNC on the Vox Podcast

 

 

Alan Green discusses Imperial Brands #IMB, On The Beach #OTB & also discussed Cadence Minerals #KDNC on the Vox Podcast

Listen to the podcast here

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