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Edison Research – Cadence Minerals #KDNC – Real Progress, Real Value
Cadence Minerals remains fundamentally mispriced in our view, with the market not fully recognising the value of its unlisted assets. Cadence has recently announced progress in advancing its major non-public asset, the Amapá iron ore project in Brazil. This includes a memorandum of understanding (MOU) with Chinese firm Sinoma to potentially provide both a definitive feasibility study (DFS) and fixed-price engineering, procurement and construction (EPC) contract for the mine restart. The implied value of Cadence’s non-public assets is 3.4p/share at current prices, while in our view an appropriate value for Amapá alone is 23.9p/share.
Cadence Minerals #KDNC – Licensing & Construction Timeline for Amapa Iron Ore Project
Cadence CEO Kiran Morzaria talks to Mark Fairbairn at Stockbox and covers the latest update re the timelines for obtaining essential licenses for the Amapa iron ore project in Brazil. Kiran explains how the timelines have been significantly shortened 12 to 16 months, a marked improvement from the typical 36-month process. Following the installation license approval, the project’s construction is expected to span 12 to 18 months, potentially allowing production to resume within approximately two and a half to three years.
Cadence Minerals #KDNC – Amapá Iron Ore Project Update
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to provide a progress update for its flagship Amapá Iron Ore Project (“Amapá Project”), including an expedited operational licensing and re-rating of our tailings storage facility.
Highlights:
· The expected licensing timeline for the mine, railway and port at the Amapá Project team has been shortened to12 to 16 months compared to a typical timeline of up to 36 months.
· The revised timeline is expected to result in the grant of mine Installation Licenses (“LI”) over the wholly owned port, railway, beneficiation plant and mine during the course of 2024, followed by an operational license (“LO”) after construction is completed.
· The Amapá Tailing Project (“TSF”) is approaching the lowest operational risk rating to date as a result of maintenance, reporting, drilling, and compliance work carried out since 2019
· Following the management team’s recent visit to Amapá, CEO Kiran Morzaria will present the most recent developments at a Shares Magazine investor evening on Wednesday, 13 September.
· Executive Summary of Pre-Feasibility Study Released and available here
CEO Kiran Morzaria commented: “We are delighted with the progress we saw first-hand in our recent visit to Amapá. Agreeing a shortened route to the operational licence is key to getting the Amapá Project back into production in the shortest time possible.”
“I look forward to presenting the latest developments at the upcoming Shares Magazine investor evening and reporting to the markets with further progress after that.”
Licensing Update
While the Amapá Project was operating, it held all the necessary permissions to mine, process, transport and ship some six million tonnes of iron ore annually. However, many of these licenses lapsed after it ceased operations in 2014. Cadence has been working alongside the team at the Amapá Project to obtain these licenses and permissions. To date, we have reinstated and extended the railway concession to 2046 (completed in December 2019) and been granted a change of control over the wholly owned port in November 2021, which ensured the federal licenses could be maintained.
The Amapá Project owns the required Mining Concessions; however, it must obtain a Mine Extraction and Processing Permit (“Mining Permit”) to begin operation. To obtain this permit, the Amapá Project must obtain an LI and, when constructed, an Operational License LO from the Amapá State Environmental Agency.
Before the suspension of mining, the Project had numerous LOs across the mining, rail, and port operations. These LOs expired between 2013 and 2018. In 2022, the Amapá Project began regularising the expired environmental permits and started consultation with the Amapá State Environmental Agency and the relevant state authorities. The Amapá Projectrequested that the requirement for a full environmental impact study be waived. This request for a waiver was on the basis that the previous LOs were granted on an operation that is substantially the same as is currently planned and remains applicable to future operations.
As a result of the discussions between the various state authorities and the Amapá Project, we are pleased to announce that Amapá Project will be able to shorten the licensing timeline substantially. We have agreed with Amapá State Environmental Agency that on the mine and railway, we will be able to submit an Environmental Control Plan – “PCA” (Plano de Controle Ambiental) and an Environmental Control Report – “RCA” (Relatório de Controle Ambiental). However, on the port, we will need to complete a full environmental assessment, but given that the Amapá Project has already begun some of the background studies, we also anticipate that the timeline for the grant of the port LI will be shortened.
The fieldwork for the LI’s will begin as soon as possible with current expectations that we will be able to submit the required reports for the mine and rail in the second quarter of 2024 and the reports for the port in the second quarter of 2024. The Amapá State Environmental Agency will then review the application for the LI’s, and we anticipate that these licenses will be granted in 2024.
This timeline is substantially shorter than expected on a greenfield site, where the impact study and associated approval can typically take between 24 and 36 months, while the Amapá Project could achieve this in 12 to 16 months.
Tailings Storage Facility
One of Cadence’s initial investment criteria into the Amapá Project was the safety and stability of the TSF. As such, before entering into the investment agreement with our joint venture partners, we carried out a TSF review by an internationally recognised consultant group and were satisfied with the structure and stability of the TS. Nonetheless, given the lack of reporting and maintenance from 2014 onwards, the TSF at the Amapá Project was considered a high risk. The work carried out since 2019, including maintenance, reporting, drilling and compliance, has meant that the Amapá Project TSF is approaching the lowest risk rating for operating TSF. The intent is that the TSF will continue to improve its risk rating. This will be achieved by completing a dam break study, installing video monitoring on the TSF, and ongoing inspection and remediation of various TSF-associated infrastructure.
Shares Magazine Investor Evening
CEO Kiran Morzaria will present at the Shares and AJ Bell ‘LIVE’ investor evening in London on 13 September 2023.
The presentation will contain information about the Company’s flagship Amapa Iron Ore Project in Brazil following a recent visit by the management team.
The Shares and AJ Bell Media, investor evening event is an opportunity for senior board directors to make a presentation about their company and update existing and potential investors on their business plans.
Investors will have the chance to discover investment opportunities and get to know the companies better by asking questions ‘live’ in person after the presentation over drinks and buffet food.
Shareholders and potential investors can register to join us LIVE at the Novotel, Tower Hill, for free via this link:
https://www.sharesmagazine.co.uk/events/event/shares-investor-evening-london-live-event-130923
Pre-Feasibility Executive Summary
As part of the ongoing engagement with potential investors, we have also released an executive summary of the previously announced PFS, which is available here.
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For further information contact:
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Cadence Minerals plc |
+44 (0) 20 3582 6636 |
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Andrew Suckling |
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Kiran Morzaria |
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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
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James Joyce |
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Darshan Patel |
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Brand Communications |
+44 (0) 7976 431608 |
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Public & Investor Relations |
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Alan Green
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Qualified Person
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.
Cautionary and Forward-Looking Statements
Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as “believe”, “could”, “should”, “envisage”, “estimate”, “intend”, “may”, “plan”, “will”, or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the company’s future growth results of operations performance, future capital, and other expenditures (including the amount, nature, and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes actions by governmental authorities, the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The company cannot assure investors that actual results will be consistent with such forward-looking statements.
The information contained within this announcement is deemed by the company to constitute Inside Information as stipulated under the Market Abuse Regulation (E.U.) No. 596/2014, as it forms part of U.K. domestic law under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.
Edison Research Note: Cadence Minerals #KDNC – A mispriced miner?
Cadence Minerals #KDNC – Amapa Project Update & Loan Financing
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce an update on the Amapá Iron Ore Project (“Amapá”) and the completion of a Mezzanine Loan Facility (“Loan Facility”), which will be applied to the Amapá project.
Highlights
Ø Savings of approximately US$28 million were identified on port refurbishment costs at Amapá.
Ø Cadence has agreed US$ 2 million Loan Facility (“First Tranche”) that has been arranged by Riverfort Global Capital Ltd to be entered into by RiverFort Global Opportunities PCC Ltd and YA II PN, Ltd (the “Investors”). The Loan Facility allows a further US$ 8 million to be drawn down over the next three years, subject to agreement by the Investors.
Ø The net proceeds from Loan Facility will be used to continue the development of the Amapá Project, including optimisation studies on the processing route and environmental licensing.
Ø Continued investment into Amapá Project will increase the Company’s stake to circa 33%.
Ø The term of the Loan Facility is two years, with a 6-month principal repayment holiday. The annual interest rate that Cadence will pay is 9.5%.
Ø The principal and interest of the Loan Facility are payable in cash. However, the Company can elect not to pay any outstanding principle or accrued interest of the Loan Facility in cash, granting the Investors the right to convert these outstanding amounts into ordinary shares.
Amapá Project Port Studies
On 1 March, we announced that a scoping level study had been completed to improve the capital cost associated with the port refurbishment of the Amapá’s wholly owned port. We have now reviewed how these changes can be integrated into the original Pre-Feasibility Study (“PFS”), published in January this year, and have identified that a potential net capital saving to the port refurbishment costs of US$28 million or circa 24% of the direct capital expenditure associated with the port refurbishment.
The savings were derived by moving the current rail loop, which is used for unloading iron ore at the port so that it is one hundred metres further inshore. The change in the location of the railway loop reduces the load on the ground near the shore and negates the installation of a substantial retaining wall. This change in the rail loop will also require a reorientation of the on-shore iron-ore storage and loading system. The net of these two capital items is anticipated to result in a net capital saving of US$28 million. These results will need to be confirmed once the project advances with further geotechnical investigations.
Details of the Mezzanine Loan Facility
The Mezzanine Loan Facility (“Loan Facility”) involves an unconditional and committed initial tranche by the Investors of US$ 2 million and a further conditional Loan Facility amount of US$ 8 million, subject to agreement by the Investors. The Loan Facility is valid for three years.
The First Tranche of US$ 2 million has a 24-month term (“Maturity Date”). It has a six-month principal repayment holiday, followed by 18 equal monthly cash repayments thereafter to the Maturity Date. The Loan Facility has an effective annual interest rate of 9.5% and has a 5% implementation on the value of the First Tranche.
If the Company elects not to settle a monthly payment in cash (each being a “Missed Payment”), they will automatically grant a right for the Missed Payment to be settled in shares as per the non-cash repayment terms contained in the Loan Facility Agreement (“Non-Cash Repayment”). Following a Non-Cash Repayment, the Investors will be automatically granted conversion rights over such principal and interest balances due concerning the Missed Payment. The Investors will then have the right for 12 months to convert such amounts either at a price equal to 12.7 pence (representing a 30% premium to the closing price on 25/05/2023) or at a 7% discount to the average of the five daily VWAPs chosen by the Investors in the 20 trading days preceding its conversion notice or at the price the Company issues further equity if lower than the existing conversion price.
Cadence has provided a security package to the Investors as part of the Loan Facility. This package includes a floating charge over the Company’s investments, placing its holding in European Metals Holdings into escrow and the issue of new ordinary shares to the Investors (“Initial Issued Shares”). The Initial Issued Shares represent 50% of the value of the First Tranche, or 8,251,224 new ordinary shares. These initial Issued Shares will be used as part of any Non-Cash Repayments if applicable. On the Maturity Date, the Company can utilise the Initial Issued Shares to pursue its investment strategy or for working capital purposes. If it has settled all amounts in cash and these Initial Issued Shares revert to the Company.
As part of the Loan Facility, the Company has agreed to grant 8,251,224 warrants to subscribe for ordinary shares in the Company at an exercise price of 13.2 pence (representing roughly a 35% per cent premium to the current share price of the Company’s Shares) with a 48-month term.
The application will be made for the 8,251,224 Initial -Issued Shares to be admitted to trading on the AIM market of London Stock Exchange plc and to the AQSE Growth Market operated by Aquis Exchange Plc (“Admission”), and this is expected to become effective on or about 5 June 2023. On Admission, the Pre-Issued Shares will rank pari passu with all existing ordinary Shares in the Company.
Following Admission, the Company will have 180,971,037 Shares in issue, with each Share carrying the right to one vote. There are no Shares currently held in treasury. The total number of voting rights in the Company is, therefore, 180,971,037. This figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.
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For further information contact:
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Cadence Minerals plc |
+44 (0) 20 3582 6636 |
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Andrew Suckling |
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Kiran Morzaria |
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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
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James Joyce |
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Darshan Patel Enzo Aliaj |
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Brand Communications |
+44 (0) 7976 431608 |
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Public & Investor Relations |
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Alan Green
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Qualified Person
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.
Cautionary and Forward-Looking Statements
Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as “believe”, “could”, “should”, “envisage”, “estimate”, “intend”, “may”, “plan”, “will”, or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance, future capital, and other expenditures (including the amount, nature, and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes actions by governmental authorities, the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.
The information contained within this announcement is deemed by the Company to constitute Inside Information as stipulated under the Market Abuse Regulation (E.U.) No. 596/2014, as it forms part of U.K. domestic law under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.
Cadence Minerals #KDNC – Corporate Update
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to provide an update on the progress of three of its investments. The latest presentation is available on our website.
Hastings Technology Metals (ASX: HAS) (“Hastings”)
On 25 January 2023, Cadence completed the sale of its 30% stake in several mineral concessions forming part of the Yangibana Rare Earths project for a consideration of 2.45 million Hastings shares, equating to approximately 1.9% Hastings issued share capital. This consideration was a premium over the Net Present Value (“NPV”) of the Cadence portion of the mineable material, based on the definitive feasibility (“DFS”) updated by Hastings on 21 February 2022.
Hastings recently published an update on the Yangibana Rare Earth Project, highlights of which are as follows:
- Significant progress during the last two months on enabling construction and ordering long lead critical items.
- A total of $146 million in contractual commitments has been made to date, demonstrating the high degree of confidence by the Hastings Board in the future of the Yangibana project.
- Ore Reserves increased 25% to 20.93Mt at 0.90% Total Rare Earth Oxide (TREO) grade, increasing mine life to 17 years.
- Senior management appointments in the last two months include Rudolph van Niekerk as COO, Robert Klug as General Counsel, and Tim Gilbert as General Manager of Operations. Recruitment is underway for Project Director and the CFO position following the recent career move by Matthew Allen.
- Cost and schedule review identified potential areas for construction contracting model restructuring, optimisation and de-risking.
- The recent engagement of Boston Consulting Group (BGC) to assist in further investigating the merits of an integrated mine-to-magnets strategy and exploration of partnership opportunities.
The full announcement concerning the Yangibana sale is available here.
Sonora Lithium Project (“Sonora”)
Cadence holds a partial interest in the Sonora Lithium Project via a 30% stake in the joint venture interests in each of Mexilit S.A. de CV (“Mexilit”) and Megalit S.A de C.V (“Megalit”). Mexilit, with its El Sauz and Fleur concessions, forms part of the Sonora Lithium Project and is a part of the reserve in the mine plan after initial mining in the La Ventana concession (100% Ganfeng). Mexalit and Megalit are each 70% indirectly owned by Ganfeng Lithium Co (“Gangfeng”) and 30% by Cadence.
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. Ganfeng has stated that they expect the capacity of phase I will deliver 50,000 tons of lithium hydroxide, which is 42% above the anticipated production levels outlined in the feasibility study.
In 2021, a decree was passed by the Mexican government to reform the domestic energy sector (“Decree”). The Decree stated that lithium would be included among the minerals considered strategic for an energy transition. As a result, no new concessions for lithium exploitation by private companies would be granted. Earlier this month, the Mexican government passed a presidential decree confirming that within a 900 square-mile lithium mining zone in northern Sonora state, existing concessions would “remain safe”. This aligns with the general opinion that the Decree passed by the Senate only impacts licenses, concessions, or contracts to be granted, not already those granted, as is the case for the Sonora Lithium Project.
Amapá Iron Ore Project (“Amapá”)
Earlier this year, Cadence published an economically robust Pre-Feasibility Study (” PFS”) for the Amapa Iron Ore Project. Along with the PFS and subsequent consultations with the key contractors, we have identified three areas of possible improvement to Amapá.
The first will be to review the historical drilling and geological data north of the Amapá mineral concessions. The data has been acquired and is currently being processed to identify further iron ore resources, which, if present, would further increase the mine life. The second area of potential improvement is a change in the layout of the port at Santana by moving the railway loop further from the shore. A scoping study regarding this option has already been completed and identified capital savings. The last area of potential improvement is to investigate and review the flowsheet to improve the final product quality over and above the current 65% iron ore concentrate.
During 2022, the impact of the Ukraine war and the legacy of Covid on supply chains resulted in higher shipping costs and lower iron ore pricing. As a result, only one iron ore shipment was made during the year. The net proceeds of this shipment, along with approximately half of the net proceeds from the shipments in 2021, have been used to pay the secured bank creditors as per the settlement agreement announced in December 2021 here. Given these unprecedented macro-economic conditions, DEV Mineração S.A. (“DEV”) was unable to meet the 2022 payment schedule as per the settlement deed and although the bank creditors have reserved their rights, the settlement deed remains in full effect with all parties in discussions with a view to agree a new timetable in order to rephase payments so these can be met in light of market conditions.
With improving iron ore prices and stability returning to shipping costs, the sale of the 58% iron ore concentrate stockpile is now economically viable. We expect shipping to recommence in the next six months, with the net revenues being used to pay the bank creditors, as per the settlement agreement.
Cadence CEO Kiran Morzaria, commented: “As is the nature of any investment company, our value is driven by the sum of our parts. With the recent reduction in Hastings share price our portfolio valuation has also reduced. However, we see no fundamental reason for this price volatility given the substantial progress. Hastings is making in the construction of the Yangibana rare earth project and we look forward to them advancing to project towards production in 2024.”
“Cadence’s current public and private investments have continued to perform delivering an unrealised return of approximately 172% and our listed investments have delivered a total return (realised and unrealised) of 328%.”
“Our confidence in Amapa continues to grow thanks to a potential further increase in the overall iron ore resource, improvements to the port and prospects for restarting iron ore shipments in the coming months. I look forward to providing further updates.”
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| Cadence Minerals plc | +44 (0) 20 3582 6636 |
| Andrew Suckling | |
| Kiran Morzaria | |
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WH Ireland Limited (NOMAD & Broker) |
+44 (0) 207 220 1666 |
| James Joyce | |
| Darshan Patel
Enzo Aliaj |
Qualified Person
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.
Cautionary and Forward-Looking Statements
Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as “believe”, “could”, “should”, “envisage”, “estimate”, “intend”, “may”, “plan”, “will”, or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the company’s future growth results of operations performance, future capital, and other expenditures (including the amount, nature, and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes actions by governmental authorities, the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The company cannot assure investors that actual results will be consistent with such forward-looking statements.
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 under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.
Cadence Minerals #KDNC – Listing of Evergreen Lithium on the Australian Stock Exchange
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that Evergreen Lithium Limited (“Evergreen”) has filed its admission Prospectus with Australian Securities & Investments Commission and the Australian Stock Exchange (“ASX”). Cadence owns approximately 15.8 million Evergreen shares which are anticipated to represent 8.7% of the issued share capital of Evergreen on admission. Evergreen’s indicative timetable for admission is 10 March 2023.
Highlights:
- Evergreen Lithium has filed a listing and offering prospectus with the ASX; the anticipated admission date is 10 March 2023.
- On admission, Cadence will own approximately 8.7% of Evergreen, which at the offer price values Cadence’s equity stake at AS$ 3.96 million.
- Evergreen intends to advance three hard rock lithium exploration projects in Australia.
- The flagship Byone Lithium Project covers the north-eastern strike extent of the lithium-and tantalum endowed Bynoe Pegmatite field;
- The project is adjacent to Core Lithium’s producing lithium mine.
- Soil sampling on the project returned geochemical anomalies indicating lithium mineralisation.
- Based on soil sampling alone an initial five target zones have been identified that contain lithium mineralisation.
- The second prospect, Kenny Lithium, is located within the Dundas Mineral Field of Western Australia, close to Mt Dean and Mt Belches-Bald Hill pegmatite fields’
- Initial field mapping on the project has confirmed the presence of substantial outcropping pegmatites
- 10km zone of pegmatite outcropping has been confirmed in the North-Eastern section of the Kenny Lithium Project
- Evergreen has recently completed a comprehensive auger program, drilling 1,731 holes. Evergreen expects the results to be available shortly after admission.
Cadence CEO Kiran Morzaria commented: “On behalf of the Cadence board, I am pleased that our investment into Lithium Technologies and Lithium Supplies have materialised into soon to be listed Evergeen and its Byone and Kenny lithium projects. Once Evergreen lists on the ASX market, it will add further value to Cadence’s rounded portfolio of listed lithium investment vehicles, which include European Metals Holdings (AIM: EMH) and our Sonora Lithium assets. Added to this, Cadence has exposure to the world class Yangibana rare earths project through it’s shareholding in Hastings Technology Metals (ASX: HAS) and of course our flagship Amapa iron ore project, the value of which was recently estimated with the publication of a pre-feasibility study, associated post tax NPV and maiden ore reserve declaration.”
“Your board believes that considerable potential exists across our assets to deliver further progress as we move forward in 2023. I look forward to reporting back with further developments.”
Background to Cadence’s investment in Evergreen Lithium
Cadence Minerals received approximately 15.8 million shares in Evergreen in July 2022 when Cadence sold its 31.5% stake in Lithium Technologies and Lithium Supplies (“LT and LS”) to Evergreen as announced on 27 June 2022. This initial consideration was valued at AS$ 3.16 million (£1.81 million). A further AS$ 6.63 million (£3.80 million) shares in Evergreen are due to Cadence on the achievement of certain performance milestones by Evergreen. Further details of these milestones can be found in the Evergreen prospectus available here. Cadence’s shares may be subject to a 2-year escrow agreement as determined by the listing rules of the ASX.
As of 31 December 2021, the total carrying values of LT and LS in the Company’s balance sheet was approximately £803,000. Based on the anticipated admission price of Evergreen on the ASX, Cadence’s shares in Evergreen will be worth £2.27 million.
Evergreen Lithium
On acquiring LT and LS, Evergreen became the 100% owner of three exploration tenements. The Bynoe Lithium Project and Fortune Lithium Project (awaiting grant of exploration permit) are located in the Northern Territory, and the Kenny Lithium Project is located in Western Australia.
Evergreen is listing on the ASX to develop these projects further and raise up to AS$ 7 million via a share offer. Evergreen can advance its business model if the listing and the offer are successful.
Byone Lithium Project
The Bynoe Lithium Project is Evergreen’s flagship prospect. Evergreen’s primary focus is to explore and discover an economically viable lithium resource for development. The Bynoe Lithium Project is located south of Darwin in the Northern Territory, Australia. It covers the north-eastern strike extent of the lithium- and tantalum-endowed Bynoe Pegmatite Field.
The Bynoe Pegmatite Field is host to Core Lithium Ltd’s (ASX: CXO) (“Core Lithium” or “Core”) high-grade Finniss lithium deposit, which is adjacent to Core Lithium’s producing lithium mine. Core Lithium’s deposit is just 1.2km from the Bynoe Lithium Project. Soil sampling conducted on the Bynoe Lithium Project has returned geochemical anomalies that indicate the lithium mineralisation continues along the trend into the Company’s Bynoe Lithium Project. Based on the initial stages of soil sampling alone (which only covers approximately 10-20% of the Bynoe Lithium Project area, an initial five target zoneshave been identified that contain lithium mineralisation. The Bynoe Lithium Project covers an area of 231 km2, making Evergreen one of the largest tenement holders within the central Bynoe Pegmatite Field after Core Lithium.
In recent years, exploration activities within the Bynoe Field have been focused on the discovery of economic lithium mineralisation hosted in pegmatites, the most successful of which has been Evergreen’s neighbour, Core Lithium, which in a very short time frame, has delineated a JORC mineral resource of 18.9mt at 1.32% Li2O at its Finniss Project. Core Lithium has achieved excellent drilling intercepts at their BP33 prospect of 107 metres at 1.70% Li2O, located within 1km of the Bynoe Lithium Project and Core Lithium’s Finniss (BP33) mine.
After listing and completion of its capital raise, Evergreen intends to expand the geochemical soil sampling significantly. In addition, Evergreen recently completed an Ambient Noise Topography (“ANT”) Survey and is currently awaiting its geophysical interpretation. Core Lithium recently used ANT (refer to ASX announcement Core Lithium, 1 August 2022, “BP33 drilling delivers outstanding results”). Core noted the results were an “outstanding success” and showed “excellent correlation” with known pegmatite bodies that were already identified by drilling.
Once the baseline geochemical and geophysical data is collected, Evergreen plans to systematically drill test the anomalies, starting with the highest priority along strike from Core Lithium’s mineralised pegmatites.
Kenny Lithium Project
The Kenny Lithium Project is located within the Dundas Mineral Field of Western Australia and 50km East of Norseman in the Eastern Goldfields. It is close to the Mt Dean and Mt Belches-Bald Hill pegmatite fields, and there are multiple significant lithium discoveries located in close proximity to the Kenny Lithium Project
The Kenny Lithium Project covers an area of 210 km2, providing Evergreen with a large and prospective land holding within the Dundas mineral field.
The Kenny Lithium Project lies at the southern end of the Norseman-Wiluna Granite Greenstone Belt within the Archaean Yilgarn Craton. This is a well-known lithium-producing region/mineral field and is host to the significant Mount Marion, Bald Hill and Baldania mines, respectively, which are close to the Company’s Kenny Lithium Project.
Initial field mapping on the Kenny Lithium Project has confirmed the presence of substantial outcropping pegmatites, whereby an approximate 10km zone of pegmatite outcropping has been confirmed in the North-Eastern section of the Kenny Lithium Project, which significantly exceeds what has already been identified by the Government Survey of Western Australia (GSWA).
Evergreen’s goal is to explore and discover an economic lithium resource for subsequent development. As with the Company’s Bynoe Lithium Project, minimal geochemical work has been undertaken within the tenure; however, historical results have proven encouraging. Evergreen has recently completed a comprehensive auger program, drilling 1,731 holes. Evergreen expects the results to be available following the listing. After that, the Company will design a drill program to drill test any targets identified to be prospective for lithium mineralisation and test the economic potential.
Fortune Lithium Project
The Fortune Lithium Project (EL31828) is located in the Northern Territory and is currently in its application phase and undergoing Native Title procedures. Evergreen Fortune Lithium Project is 784.71km² and is located 150km northeast of Alice Springs, in the Arunta region. The tenement itself has not been historically explored for lithium.
The Fortune Lithium Project lies in the Mesoproterozoic Aileron Province of the Arunta Region. The Arunta Region comprises a sequence of Proterozoic rocks known to host tin-tantalum-tungsten pegmatites. Historic pegmatite-hosted workings targeting tin-tantalum and mica are recorded in the vicinity of the Fortune Lithium Project area. There has been no exploration activity on the Fortune Lithium Project tenement specifically. The Fortune Lithium Project is currently in the application phase and is, therefore not granted tenure.
| For further information contact:
|
|
| 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 |
– Ends –
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.
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 #KDNC – Corporate Update
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to provide an update on the progress of three of its investments.
Amapá Iron Ore Project
Cadence is pleased to report that the pre-feasibility study for the Amapá Iron Ore Project has now been completed, and an announcement is expected to be released early in the New Year.
Evergreen Lithium Pty Ltd (“Evergreen”)
In July 2022, Cadence sold its 31.5% stake in Lithium Technologies and Lithium Supplies (“LT & LS”) to Evergreen. The terms of the sale included an initial consideration of AS$ 3.16 million (£1.77 million) in Evergreen shares, with a further AS$ 6.63 million (£3.72 million) due in Evergreen equity on the achievement of certain performance milestones.
Although Evergreen had expected a listing on the Australian Stock Exchange (“ASX”) to occur this calendar year, it is still awaiting final regulatory approval. Once approval has been granted by the ASX, Cadence will provide a further update along with a definitive timeline.
The full announcement concerning the LT & LS sale is available here.
Yangibana Rare Earths project (“Yangibana”)
In June 2022, Cadence entered into a binding agreement to sell its working interests and tenements in Yangibana to Hastings Technology Metals (ASX: HAS) (“Hastings”) for A$9 million (£5.1 million), satisfied by the issue of fully paid ordinary Hastings shares. Cadence’s 30% interest in tenements covers a small portion of the Yangibana project and potentially represents one year of the 16-year mine life.
All of the preconditions for the completion of the sale, apart from state approval for the transfer of the mineral licenses, have been satisfied. Once completed, Cadence will provide a further update and a definitive timeline.
The full announcement concerning the Yangibana sale is available here
| For further information contact:
|
|
| 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.
Cautionary and Forward-Looking Statements
Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as “believe”, “could”, “should”, “envisage”, “estimate”, “intend”, “may”, “plan”, “will”, or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the company’s future growth results of operations performance, future capital, and other expenditures (including the amount, nature, and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes actions by governmental authorities, the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The company cannot assure investors that actual results will be consistent with such forward-looking statements.
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 under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.
Cadence Minerals #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.