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Cadence Minerals #KDNC – Amapá Iron Ore Project Licensing on Schedule. Project Financing Discussions Advancing.
Cadence Minerals (AIM: KDNC) is pleased to report the progress of the environmental licensing and the testing of the 67% ‘Green Iron’ processing flow sheet at the Amapá Iron Ore Project.
Highlights:
- Installation Licences for the Amapá mine and railway remain on schedule to be granted this year.
- The license application for the port was submitted in September and is also scheduled for a grant this year.
- The test work for sixty-seven per cent (67%) iron flow sheet is due for completion in the fourth quarter of this year.
- The Project is actively discussing the equity portion of project financing to complement the existing debt financing MOU.
Kiran Morzaria, the CEO of Cadence, commented, “It’s great to see the continued progress at Amapá. The Project has consistently delivered all the required environmental studies and applications either on time or ahead of schedule. Based on the positive feedback from the local government, we understand that all necessary permits will be granted before the year’s end. Additionally, we are actively advancing the development of a 67% “green iron” product and securing equity financing for the Project.”
Licensing
As announced in September 2023 (News Release Here), the Amapá Project has agreed with the Amapá State Environmental Agency (“SEMA”) to an expedited environmental licensing process, given the Project was previously operating and had been granted all required licenses.
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 Installation License (“LI”) to begin construction and, when constructed, an Operational License (“LO”). An LI and LO are also required to construct and operate the railway and port.
In April 2023, the Amapá Project submitted the required environmental studies and applications for the Amapá mine and railway. This application was in the form of the Environmental Control Plan, “PCA” (Plano de Controle Ambiental), and an Environmental Control Report, “RCA” (Relatório de Controle Ambiental).
In early September, the Amapá Project submitted the required environmental studies and application for the LI grant for iron ore port. This application was submitted after those for the mine and railway as SEMA required an extended environmental study. Nevertheless, the application was submitted on schedule.
Our joint venture has continued engaging with SEMA and other relevant authorities, who have indicated that the LI for the rail and mine remain on schedule for the grant this year. Given the impact that the railway’s restart will make on local communities, the installation license for the railway is anticipated to have some conditions precedent. This is expected in any project of this nature. The Amapá project management team always anticipated this as part of the required licensing requirements to redevelop the Amapá Iron Ore project.
Our understanding from SEMA is that, based on the current timeline, all the LIs will be granted by the end of 2024.
67% ‘Green Iron’ Flowsheet
The testing of the 67% processing route is continuing. The Amapá Project originally produced three products: 58%, 62%, and 65% iron ore concentrate. The 2023 pre-feasibility improved this product mix, with only a 62% and 65% produce mix being envisaged. The current flowsheet aims to produce one hundred per cent 67% iron ore concentrate, which has both a premium in price and is anticipated to be a growth market in the iron ore concentrate as it represents the feedstock to DRI furnaces. These furnaces enable the decarbonising of the steel industry by replacing blast furnaces.
The main variances in the proposed 67% flow sheet involve:
- Removing the jigging circuit, with the iron being recovered via the grinding, magnetic, and flotation circuits. This will improve the iron recovery rate.
- Replacing hydrocyclone desliming with thickeners, improving classification efficiency and lowering power consumption.
- The 67% flow sheet will remove the 62% product stream, eliminating the spiral circuit. This will shorten the process flow and reduce power consumption.
- Adding a flowsheet to improve iron concentrates from 65.4% to 67% via regrinding the material from the magnetic separator, meaning finer particles can be further liberated, improving iron concentrate grade to 67%.
- Replacement of all slurry, water, and reagent pumps involved in the beneficiation process.
- A concentrate slurry pipeline and filtrate water return pipeline system will be built to replace truck transportation.
- The particle size of the concentrate after the tower mills is too fine to be filtered by the existing vacuum disc filters. Therefore, horizontal press filters are required to ensure the moisture content of the filter cake is no larger than 8%.
- A train loading system will be built in the train loading area.
A summary of the new flow sheet is available here.
The main metallurgical test work being carried out includes raw ore liberation testing, desliming testing, magnetic separation testing, floatation testing, grinding work index testing, concentrate tailings thickening testing and tailings filtration testing. We expect this work to be completed in the fourth quarter of this year.
Project Financing
In October 2023 (News Release Here), our joint venture company and DEV Mineração S.A. (“DEV”) entered into a memorandum of understanding (“MOU”). The MOU is in place to secure the required project debt financing for the construction and re-development of the Amapá Project.
To complement the project debt financing, our joint venture is actively engaging with several potential financing partners to provide the equity portion of the funding at the project level.
About the Amapá Project and Cadence Ownership
The Amapá Project is a brownfield integrated iron ore project in the Amapá State of Brazil. It has Mineral Resources of 276 million tonnes (Mt) at 38.33% Iron (Fe) and Ore Reserves of 196 Mt at 39.34%. The Project consists of the mine, processing plant, wholly owned port and a 194km railway, all operated by PBA.
As of August 31st, 2024, Cadence’s total investment in the Amapá million was approximately US$14.2 million, and its equity stake in the project stands at 34.5%, an increase of approximately US$0.57 million since 30 June 2024.
| For further information contact:
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| Cadence Minerals plc | +44 (0) 20 3582 6636 |
| Andrew Suckling | |
| Kiran Morzaria | |
| Zeus Capital Limited (NOMAD & Broker) | +44 (0) 20 3829 5000 |
| James Joyce | |
| Darshan Patel
Isaac Hooper |
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| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
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 considered forward-looking. 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 crucial 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 results will be consistent with such forward-looking statements.
The company deems the information contained within this announcement 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 – Further Progress at the Amapa Iron Ore Project
Cadence Minerals (AIM: KDNC) is pleased to announce an increase in the rate of progress on the environmental applications and the ongoing development of the 67% ‘Green Iron’ processing flow sheet at the Amapá Ore Project (“Amapá”, “Project” or “Amapá Project”).
Highlights:
- Submission of the Environmental Control Plan – “PCA” (Plano de Controle Ambiental) and an Environmental Control Report – “RCA” (Relatório de Controle Ambiental) submitted ahead of schedule for the Mine and Railway.
- The PCA and RCA are part of the state environmental approval process required to obtain an Installation License (“LI”), which, once granted, allows construction at Amapá to commence.
- The port’s environmental licensing is on schedule with the PCA and RCA and is due to be submitted in the third quarter of this year.
- Sampling of two tonnes of iron ore representing the life of mine material is complete. This will be sent to an engineering firm in China to test the 67% Fe ”Green Iron” flow sheet.
Cadence CEO Kiran Morzaria commented: “The Cadence Board and Management team are thrilled with the recent uptick in the pace of developments at the Amapá Iron Ore Project. The early submission of our environmental reports underscores the Project’s commitment to sustainability and efficient project management, and this along with the anticipated approval of our installation license for the current year, is paving the way for the rehabilitation and commissioning of the Amapá Project. Our dedication to the ‘Green Iron’ initiative reflects our vision for an environmentally lower carbon iron ore product. I look forward to reporting further progress to you in the coming weeks and months.”
Licensing
As announced in September 2023, Amapá Project Management had agreed with the Amapá State Environmental Agency (“SEMA”) to an expedited environmental process, given the Project had previously been granted all its Operational Licenses (“LO”).
The PCA and RCA for the mine and railway were submitted to SEMA last week. SEMA will now review the application. The RCA and PCA for the wholly-owned port continue progressing, with the final reports due for submission in the third quarter of this year. Our understanding from SEMA is that based on the current timeline, the LI will be granted by the end of 2024. The LI allows the rehabilitation and construction of the Amapá Project, and once this is completed, the LO is granted, and mining operations can commence.
67% ‘Green Iron’ Flowsheet
The Amapá Project Management team continue to develop the ‘green iron’ flowsheet. Part of the work entails carrying out a mineralogical and multi-elemental analysis of run-of-mine ore, concentrate, and tailings, along with testing the full circuit at a pilot-scale level. To this end, the Project has completed a life-of-mine sampling, collecting approximately two tonnes of material, which will now be shipped to our independent processing engineers in China.
About the Amapá Project and Cadence Ownership
The Amapá Project is a brownfield integrated iron ore project in the Amapá State of Brazil. It has Mineral Resources of 276 million tonnes (Mt) at 38.33% Iron (Fe) and Ore Reserves of 196 Mt at 39.34%. The Project consists of the mine, processing plant, wholly owned port and a 194km railway, all operated by PBA. A Pre Feasibility Study (“PFS”) was published in January 2023, which delivered a post-tax net present value of US$949 million at a discount rate of 10% and a post-tax internal rate of return of 34%, with an average annual life of mine EBITDA of US$235 million annually. In the PFS, after ramp-up, the planned yearly average production was forecast to be 5.3 Mtpa of Fe concentrate, consisting of 4.4 Mtpa at 65.4% Fe and 0.9 Mtpa at 62% Fe concentrate. Over the life of the mine, Amapá is forecast to deliver free on-board C1 Cash Costs of US$35.53 / dry metric tonne.
As of March 28th 2024, Cadence’s total investment in the Amapá Project had increased by approximately US$1.1 million to approximately US$13.2 million, and consequently, the equity stake in the project now stands at 33.6%.
| For further information contact:
|
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| 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 | |
| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
Edison Research – Cadence Minerals #KDNC Amapa Optimisation Adds Value
This year will be important for Cadence Minerals’ major asset, the Amapá iron ore project in Brazil. Cadence recently announced the results of an optimisation study that points to the potential to increase production by 4.8% and lower processing plant commissioning costs by 33%. An updated pre-feasibility study (PFS) level 
NPV will be published in the near future and we explore some of the sensitivities in this report. We have adjusted our valuation to reflect portfolio changes and the rise in Cadence’s stake in Amapá, although we have yet to include the value uplift of the optimisation of Amapá.
View the full Edison Research note – cadence-minerals_33430_20240404
Cadence Minerals #KDNC CEO Kiran Morzaria talks to StockBox Media
Stockbox Media interview with Cadence CEO Kiran Morzaria, where he discusses the successful cost savings & increased production at Amapá Iron Ore Project
Stockbox interview with Cadence Minerals #KDNC CEO Kiran Morzaria
Stockbox Media spoke to Cadence Minerals #KDNC CEO Kiran Morzaria, where he discussed ongoing optimization studies aimed at reducing the capital expenditure for the plant at the Amapa Iron Ore project.
- Cadence Minerals has developed a new processing flow sheet that has increased the iron concentrate quality to 67%, up from previous levels.
- This improvement could enable the company to market a higher quality product, potentially opening up new markets such as the United States, where there is a demand for high-grade material for green steel production. This advancement is expected to have a significant positive impact on the project’s net present value (NPV).
- Progress is being made towards obtaining environmental & installation licenses, which are crucial for moving forward with the construction and rehabilitation of the mine. Additionally, discussions are underway on financing including both debt and equity components.
Cadence Minerals #KDNC – Progress at the Amapá Iron Ore Project and Corporate Update
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to provide an update on the developments at the Company’s flagship Amapá Iron Ore Project in Brazil (“Amapá Project”), with updates also provided on our other investments.
Highlights:
- Optimisation studies to reduce Amapá plant capital expenditure are nearing completion.
- An additional processing flow sheet is being developed to increase product quality to 67% iron ore concentrate.
- Operational environmental licensing at the Amapá Project is on schedule, with the expected grant of the installation licenses over the mine, wholly owned port, railway, beneficiation plant and mine during 2024.
- Project financing discussions continue, with expressions of interest in project equity financing. This is in addition to the current MoU with TCIDR for the debt financing of the Amapá Project.
Cadence CEO Kiran Morzaria commented: “I am delighted to report that the Amapa project has taken a substantial series of steps forward since we announced the MoU with TCIDR in October 2023. The Board fully expects to be able to deliver cost savings once the capital and operating expenditure review is complete, added to which the engineering team have identified a flowsheet which can produce a 67% concentrate product instead of the previously proposed 62% and 65% product mix. This will mean an improvement in margins and project economics, building upon an already robust U$949 million net present value.”
“As we remain on schedule to secure the installation licences by the end of this year, we are seeing expressions of interest from potential partners to invest into the project equity finance element. Once completed, the recommissioned Amapá mine can restart production.”
“Your Board have also completed the sale of Hastings Technology Metal shares, delivering a 30% realised return, which has been immediately reinvested into Amapá, with the cancellation of our Aquis listing also delivering a further cost saving. I look forward to reporting on our further investment, our equity stake and on operational progress at Amapá in the coming weeks.”
Amapá Project Optimisation Studies
During 2023, our joint venture company Pedra and Branca Alliance (“PBA”) made significant progress in the development of the Amapá Project, including the publication of a Pre-Feasibility Study (“PFS”) on the project with a US$949 million net present value.
Late last year, PBA engaged an engineering firm to review the processing plant flowsheet to reduce capital and operating expenditure and, if possible, improve the product quality, all of which, if successful, would further improve the project economics. The Board are pleased to report that the capital and operating expenditure review is nearing completion, and we envisage that this review will deliver capital and operating cost savings.
In addition, the engineering consultants are developing a flowsheet to increase product quality to 67% iron ore concentrate. To report this at a PFS level, PBA will need to send approximately two tonnes of run-of-mine samples to verify the viability of the proposed flowsheet and to finalise capital and operating costs, which, on a preliminary basis, do not appear materially different to those forecast in the PFS.
We expect to be able to fully report on the capital savings in the next quarter, although the improved product quality will take longer given the flow sheet testing required. If successful, the latter’s impact will be significant, as a 67% product would represent a premium of between US$10 and US$15 per tonne over our proposed 62% and 65% product mix.
Given the above potential improvements and discussions with potential development partners, we have determined that it is best for the timeline to incorporate the feasibility study into the project’s implementation phase.
Amapá Project Licensing Update
In September last year, we announced PBA’s timeline for obtaining installation licences for the construction and rehabilitation of the mine, plant, rail, and port at the Amapá Project. We are pleased to report that this is on track at the time of writing, and we expect all the licences to be awarded during 2024. The grant of installation licenses is a prerequisite for any material rehabilitation or construction.
Amapá Project Equity Financing
In October 2023, the Amapá Project executed a Memorandum of Understanding (“MoU”) with Tianjin Cement Industry Design & Research Institute Co., Ltd (“TCIDR”) for the debt financing of the project. PBA is now focusing on equity project financing, has received expressions of interest, and continues to advance these. The Board will report further as these discussions progress.
Amapás Development of Joint Venture Iron Ore Mineral Resources on the Tucano Gold Mine
In addition to the Amapá Project’s current inventory of 276.24 million tonnes of measured, indicated and inferred mineral resources at 38.33% Fe there is further 143.5 million tonnes at 36.77% of historical resource on the adjacent concessions owned by the Tucano Gold Mine. In addition, during the mine’s operation, the previous owners identified four areas within the Tucano Gold Mines tenement with a mineral potential of around 500 million tonnes of iron ore.
The Amapá Project has a right to explore and mine these areas for iron ore, which are governed by various joint operating agreements
Now that the Tucano Gold Mine plans to restart its operations, we have been in discussions and have requested the complete set of geological data, including drill data and assay results, to review the historic mineral resource, with the target of bringing these mineral resources into the mine plan, extending the mine and improving the economics.
Cadence Interest in the Amapá Project
At the end of September 2023, Cadence’s total investment in the Amapá Project stood at approximately US$12.1 million, with the equity stake in the project standing at 32.6%. Since then, Cadence has continued to invest in the Amapá Project, and a further updated equity position will be provided at the end of March 2024.
Cadence’s Interest in Hastings Technology Metals (“Hastings”)
On 25 January 2023, Cadence completed the sale of its 30% interest in several mineral concessions forming part of the Yangibana Rare Earths Project for 2.45 million Hastings shares. At the end of February 2024, Cadence disposed of its interest in Hastings Technology Metals. The realised return on our original acquisition of 30% of the mineral concessions is approximately 30% and the proceeds of the sale have been reinvested into the Amapá project.
Notice of Cancellation of Trading on the AQSE Growth Market (‘Aquis’)
The Company currently has a dual listing on the AIM market of the London Stock Exchange and the AQSE Growth Market of the Aquis Stock Exchange. The Board has decided to seek the cancellation of its dual listing on Aquis, in order to improve operational and financial efficiencies.
As the Company will retain its AIM listing on the London Stock Exchange, the Company is not required to send a circular and seek shareholder approval of a resolution to cancel in accordance with Rule 5.3 of the AQSE Growth Market Rule Book.
In accordance with the procedures of the AQSE Growth Market, the Board anticipates that the cancellation will be completed on or around 5 April 2024.
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For further information contact:
|
|
| 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 | |
| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
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.
Stockbox interview with Cadence Minerals #KDNC CEO Kiran Morzaria
Stockbox caught up with Cadence CEO Kiran Morzaria from onsite the Amapa Iron Ore project. Kiran highlighted three major achievements at the Amapá Iron Project during the year. These achievements include:
- Publishing a new measured resource of 300 million tons at 38% Iron Ore (Fe)
- Completing a robust pre-feasibility study with a value of $949 million.
- Obtaining the necessary licensing and financing agreements, including an MOU (Memorandum of Understanding), to progress the project.
- Kiran also touched on the Sonora Project, where Cadence Minerals is actively engaging with the Mexican government regarding its lithium licenses.
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.