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Alan Green covers Cadence Minerals #KDNC, ECR Minerals #ECR & Global Petroleum #GBP on this week’s Stockbox Research Talks
Alan Green covers Cadence Minerals #KDNC, ECR Minerals #ECR & Global Petroleum #GBP on this week’s Stockbox Research Talks
Cadence Minerals #KDNC – Interim Results for the six months ended 30 June 2024
Cadence Minerals plc (AIM/AQX: KDNC) is pleased to announce its interim results for the six months ended 30 June 2024.
Despite the poor commodity and macro backdrop, our primary investment, the Amapá Iron Ore Project, has progressed well. The three targets we set for the year are either completed or scheduled to be completed by year-end.
Highlights for Amapá Project progress made in the period and post-period end include:
- The completion of optimisation studies resulting in a 20% increase of Post-tax Net Present Value (“NPV”) to US$1.14 billion, with profit after tax of US$3.14 billion over the Life of Mine
- A 10% increase in average production after ramp-up to 5.82 million dry metric tonnes per annum (“Mtpa”) of Fe concentrate, consisting of 4.81 Mtpa at 65.4% Fe and 1.01 Mtpa at 62% Fe concentrate.
- A 6% decrease in Free on Board C1 Cash Costs to US$33.5/dry metric tonne.
- The submission of required environmental studies and applications for the grant of the installation licenses at the Amapá Project.
- The completion of the design of a 67% iron ore concentrate flow sheet, with testing of the design currently underway.
The immediate focus of the Amapá Project is financing the next stage of development, a goal to which all the partners are fully dedicated. We believe this should be done via a trade sale or a joint venture with a highly experienced mining operator.
We are actively working towards this goal and are currently discussing with potential joint venture partners. These processes take time with extensive due diligence and contract negotiations, and we know that shareholders want to be informed about the detailed progress; however, for commercial reasons and listing rule requirements, we will only announce once a material contract has been executed.
Our other main investments are in the lithium sector. With lithium prices down some 80% over the last twelve months, we have seen a reduction in lithium equities, with the average producer down some 38% during the current year. As our investments are in either early-stage exploration or development assets, the decrease in equity price was the primary driver of our losses during the period.
Nonetheless, we see positive indications in the lithium market, with market commentators forecasting improvements in 2025 and supply shortfalls in the 2030s. However, it should be noted that we should not expect lithium prices to return to levels seen in 2022 in the short to medium term. Lithium demand is still growing significantly, so prices should improve over the coming year.
Investment Review
As outlined in the section “Our Business and Investment Strategy,” Cadence operates an investment strategy in which we invest in private projects via a private and public equity model. In both investment classes, we take either an active or passive role. We have reported in these segments below.
The Amapá Iron Ore Project, Brazil (“Amapá” or “Project”)
Interest – 33.12% at 31/12/2023 and 34.14% at 30/06/2024
The Amapá Project is a large-scale iron ore mine with associated rail, port, and beneficiation facilities. It began operations in December 2007 but ceased in 2014 due to a geotechnical failure at the port facility, which limited iron ore export. Before closing, the Project made an underlying profit of US$54 million in 2012 and US$120 million in 2011. In 2008, the Project produced 712 thousand tonnes of iron ore concentrate, and production increased to 4.8 million tonnes in 2011 and 6.1 million tonnes in 2012.
Investment
In 2019, Cadence entered into a binding investment agreement to invest in and acquire up to 27% of the Amapá iron ore mine, beneficiation plant, railway, and private port owned by DEV Mineração S.A. (“DEV”). 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, Pedra and Branca Alliance (“PBA”). This investment was completed in the first quarter of 2022. Since then, Cadence has invested another US$7.29 million for a further 7.14% equity. At the end of the period, Cadence Minerals had invested some US$13.8 million for 34.14% in the Project.
Operations Review
During the reporting period, we continued to develop the Amapá Project. Our main operational goals for this year were to complete our environmental applications, reduce capital expenditure, improve Project economics, and resume testing to produce a high-grade 67% iron ore concentrate.
These targets had been mainly achieved at the time of writing. Subsequently, we reported on capital costs and increased mining during the period, which delivered a 20% increase in the Project’s Net Present Value. We also submitted all the required environmental license applications, which should be granted by the end of 2024.
We have started testing the flow sheet design we developed during the period, which we expect to be completed in the fourth quarter of this year.
Updated Pre Feasibility Study (“PFS”)-level economic study
In March this year, the Amapá Project announced the results of the optimisation study, which delivered material capital savings to the Project. The Amapá Project carried out an updated PFS-level economic analysis based on these results.
Updated Mining Schedule
As part of the optimisation work, engineering consultants identified higher availability at the processing plant, which increased the annual run-of-mine feed rate to the processing plant. As a result, the mining and other related engineering disciplines had to be re-examined, and in particular, the mine schedule had to be recalculated to optimise the Project’s NPV.
As a result, a new life of mine production plan was scheduled. This revised schedule allows for 15 years of production with the current economic values and a cut-off of 25% Fe. The resultant life of the mine strip ratio is approximately 0.4:1 (tonnes waste: tonnes ore), and the average ore mine delivered to the plant is 13 million metric tonnes per annum.
Project Financial Analysis
An updated PFS financial model, which included the updated mining schedule, lower capex, and lower operational costs, was developed to evaluate the Project’s economics. All other aspects of the financial analysis remained the same as per the PFS published in January 2023. Summary results from the economic model outputs are presented in the table below. The financial model considers 100% equity funding for the Project, although the financing of the Project will be a mix of debt and equity. A summary of the key financial information is presented below, alongside the 2023 PFS data.
Table 1.1 Key Project Metrics (100% Project basis)
| Metric | Unit | 2023 PFS Data | 2024 PFS Data |
| Total ore feed to the plant | Mt (dry) | 176.88 | 176.93 |
| Life of Mine | Years | 16 | 15 |
| Fe grade of ore feed to the plant | % | 39.34 | 39.34 |
| Recovery | % | 76.27 | 76.27 |
| 62.0% iron ore concentrate production | Mtpa | 0.89 | 0.95 |
| 65.4% iron ore concentrate production | Mtpa | 4.23 | 4.51 |
| C1 Cash Costs FOB * | US$/DMT | 35.53 | 33.50 |
| C1 Cash Costs CFR ** | US$/DMT | 64.23 | 52.20 |
| Pre-Production capital investment*** | US$M | 399 | 343 |
| Sustaining capital investment over LOM**** | US$M | 245 | 245 |
| Post-tax NPV (10%) | US$M | 949 | 1,145 |
| Post-tax IRR | % | 34 | 42 |
| Project payback | Years | 4 | 4 |
| Total profit after tax (net operating profit) | US$B | 2.96 | 3.14 |
| * | Means operating cash costs, including mining, processing, geology, OHSE, rail, port and site G&A, divided by the tonnes of iron ore concentrate produced. It excludes royalties and is quoted on a FOB basis (excluding shipping to the customer). |
| ** | Means the same as C1 Cash Costs FOB; however, it includes shipping to the customer in China (CFR). |
| *** | Includes direct tax credit rebate over 48 months |
| **** | Includes both sustaining CAPEX and deferred capital expenditure, specifically, improvements to the railway and the installation of conveyor belt and mine site to rail load out |
Project Permitting
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 that 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 build and operate the railway and port.
In April, 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). This was followed in early September when
The Project submitted the required environmental studies and application for the LI grant for the iron ore port.
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.
Secured Bank Settlement Iron Ore Shipments
As per the settlement agreement announced in December 2021 here, the net proceeds of the one shipment carried out in 2022, along with approximately half of the net proceeds from the shipments in 2021, have been used to pay the secured bank creditors.
In early 2024, we reached an in-principle agreement on a one-time settlement amount with the secured creditors and had a financing solution to make this payment. However, we could not crystallise the financing due to a longer-than-expected approval process from the secured creditors and unfavourable iron ore prices. We remain optimistic that as the iron ore price improves, we will be able to secure the funding needed to make this one-time payment.
Development Plan for the Amapá Project
The goal is to bring this Project back into production. Based on the positive results derived from the updated economic assessment at a PFS level, we are now testing the 67% iron ore concentrate product flow sheet. Once the flow sheet is proven to the PFS level, this revised flow sheet will form the basis of an amended economic assessment of the Project.
Alongside this, and based on discussion with SEMA, we expect the grant of the LIs by the end of the year, allowing the commencement of construction and the recommissioning of the Project in 2025. Of course, this will be subject to the Project securing appropriate debt and equity financing.
Cadence, along with its joint venture partner, has agreed that the lowest risk and currently the best commercial approach for our investment in the Project should be either a trade sale or a joint venture with a highly experienced mining operator. We are actively working towards this goal and discussing it with potential joint venture partners. The funding of debt and equity for the recommissioning and construction of the Project is anticipated to occur at the asset or joint venture level.
Private Investments, Passive
Ferro Verde Iron Ore, Brazil
Interest – 1% on 31/12/2023 and 30/06/2024
In 2022, Cadence invested a small amount (£0.21 million) in an advanced iron ore deposit in Brazil the previous year. The Ferro Verde Deposit is in the southern portion of the state of Bahia, in the northeastern region of Brazil, next to the town of Urandi, some 700 km southwest of Salvador, the state of Bahia. The project is currently progressing with its Definitive Feasibility Study (DFS). It has a historic inferred resource of 284 million tonnes of iron ore at 31% Fe. The intent is to produce 4.5 Mtpa of 67% Fe. Our intended exit strategy is either when the asset is listed or the owners carry out a trade sale.
Sonora Lithium Project, Mexico
Interest – 30% on 31/12/2023 and 30/06/2024
Cadence holds an interest in the Sonora Lithium Project through a 30% stake in the joint venture interests in Mexalit S.A. de CV (“Mexalit”) and Megalit S.A. de CV (“Megalit).
In April 2022 and May 2023, the Mexican Government made changes to its Mining Law, which included prohibiting lithium concessions, declaring lithium a strategic sector, and giving a state-owned entity exclusive rights for lithium mining operations. Despite existing concessions, including those held by Mexilit and Megalit, being supposedly unaffected, the General Directorate of Mines (“DGM”) started reviewing nine lithium concessions held by Mexican subsidiaries. Mexilit and Megalit submitted evidence of compliance with minimum investment obligations, but these concessions were still cancelled.
Ganfeng and Cadence believe the cancellations violate Mexican and international law and have filed administrative review recourses. Cadence also issued a Request for Consultations and Negotiations to the Government of Mexico under the United Kingdom-Mexico Bilateral Investment Treaty regarding the revocation of mining concessions for the Sonora Lithium Project.
In their Request, Cadence and REMML have identified various BIT obligations that Mexico has breached, including Mexico’s obligation not to unlawfully expropriate the investments of UK investors such as Cadence and REMML and its obligation to treat such investments fairly and equitably.
In accordance with Article 10 of the BIT, Cadence and REMML have requested consultations and negotiations with Mexico to resolve the dispute amicably. The BIT provides for disputes to be resolved by international arbitration if they cannot be resolved through consultation and negotiation.
The affected concessions include those granted to Mexilit S.A. de CV (“Mexilit”) and Minera Megalit S.A. de CV (“Megalit”), which are joint venture companies in which Cadence holds a 30% stake through REMML.
Public Investments
The public equity investment segment is composed of passive investment. 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.
The movement in public portfolio values during the year is summarised below.
| Commentary | £,000 | |
| Portfolio value on 31 December 2023 | 4,162 | |
| Disposal of public Investments during the year | Disposal of investments held in European Metals & Hastings Technologies | (1,321) |
| Realised and Unrealised loss on portfolio value for the year | Realised and unrealised loss on European Metals & unrealised loss on Evergreen due to decrease in equity price | (1,902) |
| Portfolio value on 30 June 2024 | 939 |
As of 30 June 2024, our public equity stakes consisted of the following:
| 30-Jun-24 | 31-Dec-23 | 30-Jun-23 | 31-Dec-22 | |
| Company | £’000 | £’000 | £’000 | £’000 |
| European Metals Holding Ltd | 359 | 2,339 | 5,207 | 4,882 |
| Evergreen Lithium Ltd | 567 | 1,481 | 2,738 | – |
| Hastings Technology Metals Ltd | – | 321 | 1,570 | – |
| Charger Metals NL | – | – | 187 | 301 |
| Eagle Mountain Mining Ltd | – | – | 20 | 37 |
| Miscellaneous | 13 | 21 | 17 | 24 |
| Total | 939 | 4,162 | 9,740 | 5,244 |
European Metals Holdings Limited (“European Metals”)
Interest – 7.0% at 31/12/2023 and 2.96% on 30/06/2024
European Metals owns 49% of Geomet s.r.o. with 51% owned by České Energetické Závody, a.s. (“CEZ”). Geomet s.r.o. owns 100% of the Cinovec lithium deposit, which hosts a globally significant hard-rock lithium deposit with a total Indicated Mineral Resource of 372.4Mt at 0.45% Li2O and an Inferred Mineral Resource of 323.5Mt at 0.39% Li2O. This is a combined resource of 7.22 million tonnes of lithium carbonate equivalent. The Cinovec lithium deposit contains a Probable Ore Reserve of 34.5Mt at 0.65% Li2O, which covers the first 20 years of mining at an output of 22,500tpa of battery-grade lithium carbonate.22,500tpa of Lithium Carbonate).
The Cinovec lithium project has achieved key milestones, including the successful production of lithium carbonate and lithium hydroxide from the pilot programme – both to battery grade, the granting of extensions to our exploration licenses, and the selection of a significantly superior site for the lithium processing plant. It’s important to note that there have been delays in the definitive feasibility study. However, EMH’s work on important processing enhancements is expected to improve the project’s economics significantly.
Evergreen Lithium Limited (“Evergreen”)
Interest – 8.74% at 31/12/2023 and 8.74% on 30/06/2024
In 2023, Evergreen was listed on the Australian Stock Exchange, and Cadence’s equity stake in Evergreen was reduced to 8.74% from 13.16% due to the IPO and associated fundraising. Further shares in Evergreen are due to Cadence upon achieving certain performance milestones.
Evergreen is the 100% owner of three exploration tenements, including the Bynoe Lithium Project, Fortune Lithium Project, and Kenny Lithium Project. The Bynoe Lithium Project, located contiguous to Core Lithium’s Finnis hard rock lithium project, is considered Evergreen’s flagship prospect, offering significant exploration potential.
During the period Evergreen continued its exploration of the Byone projects, the main highlights included approving the mine management plan, which enabled drilling to commence. This was announced in July 2024, with an auger sampling program drilling short holes over areas identified as high-priority targets. Samples generated from this program will be analysed at an offsite laboratory. Results from this work will be used in conjunction with surface soil sample results to target LCT pegmatites in the future. In addition, RAB/Air Core drilling began, testing geochemical, geophysical and other targets identified in the previous exploration programmes. This drilling programme has intersected shallow pegmatites along strike from Core Lithium’s BP33 deposit. Given the early success of the current air-core drill program, RC drill planning is currently underway. RC drilling will be used to test pegmatites at depth and along strike.
FINANCIAL RESULTS:
During the period, the Group made a loss before taxation of £2.53 million (6 months ended 30 June 2023: £1.95 million, year ended 31 December 2023: £3.02 million). There was a weighted basic loss per share of 1.392p (30 June 2023: 1.163p, 31 December 2023: 1.762p). The total assets of the group decreased from £19.97 million at 31 December 2022 to £17.79 million.
During the period, our net cash outflow from operating activities was £0.32 million, and we raised gross proceeds of £0.47m via the issue of shares and a further £1.33m from the sale of our investments. Most of the capital raised was reinvested (£1.01m), with £0.55m used to pay down existing debt. As a result, our net cash position was reduced from £0.22 million to £0.13 million.
Kiran Morzaria
Director
26 September 2024
| For further information contact:
|
|
| 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 |
|
| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
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 PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2024
| Notes | Unaudited Period ended 30 June 2024 | Unaudited Period ended 30 June 2023 | Audited Year ended 31 December 2023 | |||
| £’000 | £’000 | £’000 | ||||
| Income | – | |||||
| Unrealised loss on financial investments | (1,126) | (1,319) | (3,101) | |||
| Realised loss on financial investments | (776) | (213) | (2,793) | |||
| (1,902) | (1,532) | (5,894) | ||||
| Share based payments | – | (25) | (25) | |||
| Impairment of intangibles | – | – | (905) | |||
| Loan from subsidiary written off | – | – | 4,810 | |||
| Other administrative expenses | (630) | (768) | (1,302) | |||
| Total administrative expenses | (630) | (793) | 2,578 | |||
| Operating profit/(loss) | (2,532) | (2,325) | (3,316) | |||
| Foreign exchange (losses)/gains | (1) | 407 | 297 | |||
| Finance cost | – | (36) | – | |||
| Loss before taxation | (2,533) | (1,954) | (3,019) | |||
| Taxation | – | – | – | |||
| Loss attributable to the equity holders of the Company | (2,533) | (1,954) | (3,019) | |||
| Total comprehensive loss for the period, attributable to the equity holders of the Company | (2,533) | (1,954) | (3,019) | |||
| Loss per share | ||||||
| Basic (pence per share) | 3 | (1.392) | (1.163) | (1.762) | ||
| Diluted (pence per share) | 3 | n/a | n/a | n/a |
CADENCE MINERALS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2024
| Share capital | Share premium account | Share-based payment reserve | Investment in own shares | Retained earnings | Total equity | |
| £’000 | £’000 | £’000 | £’000 | £’000 | ||
| Balance at 1 January 2023 | 2,144 | 37,612 | 252 | (64) | (18,623) | 21,321 |
| Share based payments | – | – | 25 | – | – | 25 |
| Issue of share capital | 82 | 42 | – | – | 124 | |
| Transactions with owners | 82 | 42 | 25 | – | – | 149 |
| Loss for the period | – | – | – | (1,954) | (1,954) | |
| Total comprehensive loss for the period | – | – | – | (1,954) | (1,954) | |
| Balance at 30 June 2023 (unaudited) | 2,226 | 37,654 | 277 | (64) | (20,577) | 19,516 |
| Transfer on lapse of warrants | – | – | (19) | 19 | 0 | |
| Transactions with owners | – | 0 | (19) | 0 | 19 | 0 |
| Loss for the period | – | – | – | (1,065) | (1,065) | |
| Total comprehensive loss for the period | – | – | – | – | (1,065) | (1,065) |
| Balance at 31 December 2023 | 2,226 | 37,654 | 258 | (64) | (21,623) | 18,451 |
| Issue of share capital | 167 | 333 | – | – | 500 | |
| Costs of share issue | (35) | (35) | ||||
| Transactions with owners | 167 | 298 | 0 | 0 | 0 | 465 |
| Loss for the period | – | – | – | – | (2,533) | (2,533) |
| Total comprehensive loss for the period | – | – | – | – | (2,533) | (2,533) |
| Balance at 30 June 2024 (unaudited) | 2,393 | 37,952 | 258 | (64) | (24,156) | 16,383 |
CADENCE MINERALS PLC
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
| Unaudited | Unaudited | Audited | ||||
| 30 June 2024 | 30 June 2023 | 31 December 2023 | ||||
| Assets | Notes | £’000 | £’000 | £’000 | ||
| Non-current | ||||||
| Financial Assets | 11,857 | 10,530 | 11,660 | |||
| 11,857 | 10,530 | 11,660 | ||||
| Current assets | ||||||
| Trade and other receivables | 3,903 | 3,978 | 3,937 | |||
| Financial Assets | 1,901 | 10,702 | 4,162 | |||
| Cash and cash equivalents | 133 | 577 | 215 | |||
| Total current assets | 5,937 | 15,257 | 8,314 | |||
| Total assets | 17,794 | 25,787 | 19,974 | |||
| EQUITY AND LIABILITIES | ||||||
| Current liabilities | ||||||
| Trade and other payables | 561 | 348 | 288 | |||
| Borrowings | 850 | 565 | 933 | |||
| Total current liabilities | 1,411 | 913 | 1,221 | |||
| Liabilities due after one year | ||||||
| Borrowings | – | 611 | 302 | |||
| Amounts owed to subsidiaries | – | 4,747 | – | |||
| Total liabilities | 1,411 | 6,271 | 1,523 | |||
| Equity | ||||||
| Share capital | 4 | 2,393 | 2,226 | 2,226 | ||
| Share premium | 37,952 | 37,654 | 37,654 | |||
| Share based payment reserve | 258 | 277 | 258 | |||
| Investment in own shares | (64) | (64) | (64) | |||
| Retained earnings | (24,156) | (20,577) | (21,623) | |||
| Total equity attributable | ||||||
| to owners of the company | 16,383 | 19,516 | 18,451 | |||
| Total equity and liabilities | 17,794 | 25,787 | 19,974 | |||
CADENCE MINERALS PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD 30 JUNE 2024
| Unaudited Period ended | Unaudited Period ended | Audited Year ended | ||||
| 30 June 2024 | 30 June 2023 | 31 December 2023 | ||||
| £’000 | £’000 | £’000 | ||||
| Cash flows from operating activities | ||||||
| Operating loss | (2,532) | (2,325) | (3,316) | |||
| Net realised/unrealised loss on financial investments | 1,902 | 1,532 | 5,894 | |||
| Impairment of investments | – | 905 | ||||
| Write off of loan from subsidiary | – | (4,810) | ||||
| Equity settled share-based payments | – | 25 | 25 | |||
| (Increase)/decrease in trade and other receivables | 34 | (21) | 20 | |||
| Increase/(decrease) in trade and other payables | 273 | 31 | (29) | |||
| Net cash outflow from operating activities | (323) | (758) | (1,311) | |||
| Taxation | – | – | – | |||
| Cash flows from investing activities | ||||||
| Receipts on sale of current investments | 1,321 | 935 | 2,150 | |||
| Payments for non-current financial investments | (1,001) | (975) | (2,088) | |||
| Net cash inflow from investing activities | 320 | (40) | 62 | |||
| Cash flows from financing activities | ||||||
| Proceeds from issue of share capital | 500 | 124 | – | |||
| Share issue costs | (35) | – | – | |||
| Borrowings | – | 1,187 | 1,400 | |||
| Loan repayments | (557) | – | – | |||
| Finance cost | – | (12) | – | |||
| Net cash (outflow)/inflow from financing activities | (92) | 1,299 | 1,400 | |||
| Net increase/(decrease) in cash and cash equivalents | (95) | 501 | 151 | |||
| Foreign exchange movements on cash and cash equivalents | 13 | (34) | (46) | |||
| Cash and cash equivalents at beginning of period | 215 | 110 | 110 | |||
| Cash and cash equivalents at end of period | 133 | 577 | 215 |
Material non-cash transactions
There were no material non-cash transactions in the period to 30 June 2024.
During the period to 30 June 2023 the Company acquired 2,452,650 shares in Hastings Technology Metals Ltd from its wholly owned subsidiary Mojito Resources, at a cost of AUD$ 9m (£5.152m). This amount was not paid in cash but treated as a intercompany loan from Mojito Resources. This has been treated as a non-current liability.
NOTES TO THE INTERIM REPORT
FOR THE PERIOD ENDED 30 JUNE 2024
1 BASIS OF PREPARATION
The interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention. The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group’s statutory financial statements for the year ended 31 December 2023 have been delivered to the Registrar of Companies. The auditor’s report on those financial statements was unqualified.
The principal accounting policies of the Group are consistent with those detailed in the 31 December 2023 financial statements, which are prepared under the historical cost convention and in accordance with UK adopted International Accounting Standards (IAS).
GOING CONCERN
The Directors have prepared cash flow forecasts for the period ending 30 September 2025. The forecasts demonstrate that the Group has sufficient funds to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the accounts have been prepared on a going concern basis.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results
2 SEGMENTAL REPORTING
The Company operates a single primary activity to invest in businesses so as to generate a return for the shareholders.
3 EARNINGS PER SHARE
The calculation of the earnings per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.
| Unaudited | Unaudited | Audited | |||
| six months ended | six months ended | year ended | |||
| 30 June 2024 | 30 June 2023 | 31 December 2023 | |||
| £’000 | £’000 | £’000 | |||
| Profit/(loss) on ordinary activities after tax (£’000) | (2,533) | (1,954) | (3,019) | ||
| Weighted average number of shares for calculating basic profit/loss per share | 188,388,620 | 174,360,940 | 177,693,153 | ||
| Less: shares held by the Employee Benefit Trust (weighted average) | (6,380,000) | (6,380,000) | (6,380,000) | ||
| Weighted average number of shares for calculating basic (loss)/profit per share | 182,008,620 | 167,980,940 | 171,313,153 | ||
| Share options and warrants exercisable | n/a | n/a | n/a | ||
| Weighted average number of shares for calculating diluted profit per share | n/a | n/a | n/a | ||
| Basic profit/(loss) per share (pence) | (1.392) | (1.163) | (1.762) | ||
| Diluted profit per share (pence) | n/a | n/a | n/a |
4 FINANCIAL INVESTMENTS
| Financial assets at fair value through profit or loss: | |||||||
| £’000 | £’000 | £’000 | £’000 | ||||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Fair value at 31 December 2022 | 5,244 | – | 12,327 | 17,571 | |||
| Additions | 5,152 | – | 2,048 | 7,200 | |||
| Transfers on listings | 1,810 | – | (1,810) | – | |||
| Fair value changes | (3,101) | – | – | (3,101) | |||
| Impairment of assets | – | – | (905) | (905) | |||
| Loss on disposals | (2,793) | – | – | (2,793) | |||
| Disposal | (2,150) | – | – | (2,150) | |||
| Fair value at 31 December 2023 | 4,162 | – | 11,660 | 15,822 | |||
| Additions | – | – | 1,159 | 1,159 | |||
| Fair value changes | (1,126) | – | – | (1,126) | |||
| (Loss)/Gains on disposals | (776) | – | – | (776) | |||
| Disposal | (1,321) | – | – | (1,321) | |||
| Fair value at 30 June 2024 | 939 | – | 12,819 | 13,758 | |||
| Losses on investments held at fair value through profit or loss | |||||||
| Fair value loss on investments | (1,319) | – | – | (1,319) | |||
| Realised loss on disposal of investments | (213) | – | – | (213) | |||
| Net loss on investments held at fair value through profit or loss | (1,532) | – | – | (1,532) | |||
| Non-current | – | – | 10,530 | 10,530 | |||
| Current | 9,740 | – | 962 | 10,702 | |||
| 9,740 | – | 11,492 | 21,232 |
5 SHARE CAPITAL
| Unaudited | Unaudited | Audited | |||
| 30 June 2024 | 30 June 2023 | 31 December 2023 | |||
| £’000 | £’000 | £’000 | |||
| Allotted, issued and fully paid | |||||
| 173,619,050 deferred shares of 0.24p (30 June and 31 December 2023: 173,619,050) | 417 | 417 | 417 | ||
| 197,637,704 ordinary shares of 1p (30 June 2023 and 31 December 2023 180,971,037 ordinary shares of 1p) | 1,976 | 1,809 | 1,809 | ||
| 2,393 | 2,226 | 2,226 |
6 LOANS
BORROWINGS
During the year ended 31 December 2023, the Company entered into a Mezzanine Loan Facility to finance its investment in the Amapá Project.
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, drawn down in 2023, 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.
During the period to 30 June 2024 £557,000 ($698,000) of capital and interest was repaid in cash. During the year ended 31 December 2023, £1,622,000 ($2,000,000) less costs was drawn down. £124,000 ($153,000) was repaid through the issue of the Initial Issued Shares. The borrowing costs (and resulting fx) have been capitalised under IAS23, as the sole purpose of the loan was to finance the Amapá Project.
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 |
|
| 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 – Notice of AGM
Cadence Minerals (AIM: KDNC) is pleased to confirm that it has posted the notice of the 2024 AGM and forms of proxy to registered shareholders. The AGM will be held at 10 am 18 October 2024 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 Company is 10 a.m. on 16 October 2024 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/general-meetings/.
The result of the AGM will be announced shortly after its conclusion and published on the Company’s website.
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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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Zeus Capital Limited (NOMAD & Broker) |
+44 (0) 20 3829 5000 |
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James Joyce |
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Darshan Patel |
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Isaac Hooper |
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Fortified Securities – Joint Broker |
+44 (0) 20 3411 7773 |
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Guy Wheatley |
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Brand Communications |
+44 (0) 7976 431608 |
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Public & Investor Relations |
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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.
Cadence Minerals #KDNC – European Metals Holdings- Cinovec Lithium Project Update
Cadence Minerals (AIM: KDNC) is pleased to note the announcement by European Metals Holdings Limited (ASX & AIM: EMH) (“European Metals” or the “Company regarding the Cinovec Lithium Project (Cinovec). EMH advises that the timeline for the completion of the Definitive Feasibility Study (“DFS“) and therefore construction of the Cinovec lithium processing plant continue to be worked on.
Given the change to the location of the lithium processing plant from Dukla to Prunéřov, additional geotechnical work is currently underway to confirm the optimal construction method and layout at the new site. Results from this geotechnical work are expected to be available at the end of September. DRA Global is then expected to provide a detailed timeline and begin the DFS finalisation program of work.
EMH will provide a further update to the market once it has received a revised timeline for completion of the DFS.
The Project team continues to progress several DFS-related programs on the Front-End Comminution and Beneficiation circuit (“FECAB“) and Lithium Chemical Plant circuit (“LCP“) to improve the overall flowsheet which are expected to positively impact Project economics.
Process Flowsheet Improvements – FECAB
EMH previously announced changes to the FECAB process flowsheet from beneficiation based entirely on magnetic separation to a process incorporating both magnetic separation and flotation. This improvement yielded a total FECAB lithium recovery of >87%, with 7-8% lost to the fines fraction and the balance of 5-6% losses due to process inefficiency. By mass, the proportion of the ore recovered to concentrate achieved was 30% of the total feed and the grade of the concentrate entering the LCP was 1.198% lithium (2.58% Li2O).
To improve FECAB performance, targeting a higher-grade concentrate, additional flotation testwork has been carried out. Representative ore samples were utilised, milled to P80<150μm and tested without removing the <20μm slimes fraction before flotation.
Results, benefits and impacts of this testwork are:
· Potential for complete elimination of the magnetic separation step from the FECAB flowsheet;
· Flotation process without desliming has been successfully optimised, which improves the recovery of zinnwaldite from the <20μm fraction whilst not impacting reagent consumption or other process beneficiation performance factors;
· A capability to deliver overall FECAB lithium recovery improvements from >87% to >94.7%, proven on a repeated basis;
· Uplift in concentrate grade from 1.198% Li (2.58% Li2O) to produce almost pure zinnwaldite concentrate with average grade of 1.46% Li (3.14% Li2O);
· The grades of concentrate produced in the flotation testwork are the highest to date, based on the recoveries achieved and mass rejection (of gangue) of 80% on average;
· The flotation testwork program was carried out at neutral pH and there was no need for chemical addition to adjust pH;
· The above results are from repeated locked cycle testwork;
· The locked cycle testwork achieved optimisation of recirculation in the flotation circuit, such that the final circuit contained only a single recirculation stream;
· The improved lithium grade and purity of concentrate recovered are expected to significantly impact both the operating costs per tonne (“Opex/t”) of battery-grade end-product as well as the capital expenditure per tonne (“Capex/t”) for the LCP;
· The results of this recent testwork have translated into impacts on the DFS which include re-sizing of kilns for roasting the concentrate and reagent and energy consumption reductions for the same overall process outputs, with the intensive magnetic separation plant Capex/t and Opex/t eliminated;
· Expected economic improvements include a reduction in roasting reagents (gypsum, limestone and sodium sulphate) required for the same output;
· The purity of the flotation concentrate achieved further supports production of exceptionally clean battery-grade end products for Cinovec;
· A flotation-only process simplifies the FECAB operationally (in addition to reducing Capex/t and Opex/t);
· The measured Particle Size Distribution (“PSD”) of the flotation concentrate is close to the ideal PSD for kiln feed. As a result, the need for a concentrate regrind mill currently in the process flowsheet is being re-assessed.
The flotation testwork has yielded excellent results and the Project team is now considering the full ramifications in bulk materials handling, tailings storage and backfilling, should a positive decision be made to change the FECAB process flowsheet to 100% flotation beneficiation. EMH will provide an update when a decision has been made.
Process Flowsheet Improvements – Lithium Chemical Plant
The principal roasting reagents mixed with lithium-bearing ore (zinnwaldite) concentrate, as stated above, are gypsum, limestone and sodium sulphate. The LCP process produces a waste stream of mixed sulphate, including sodium sulphate, potassium sulphate, rubidium sulphate, with a residual component of lithium sulphate derived from lithium which is not converted into lithium phosphate during its first pass through the lithium phosphate reactor tank.
EMH has recently managed locked cycle tests that demonstrate the effects of replacing sodium sulphate roasting reagent entirely with the mixed sulphate waste stream, targeting reduced overall reagent consumption.
Nine locked cycles were performed with fully-representative zinnwaldite concentrate roasted in each test. This testwork was undertaken at Nagrom Laboratories in Perth, WA.
These tests have been successful, with the overall lithium recovery in the LCP circuit remaining in the previously announced range of 88-93%.
The recycling of this mixed sulphate waste stream is a key component of the patent pending for the Cinovec LCP process.
The benefits and impacts of this optimisation testwork of the LCP circuit are:
· Elimination of sodium sulphate as a roasting reagent, reducing Opex/t for the project;
· Lithium not recovered in its first pass through the lithium phosphate reactor tank circuit is reprocessed, enabling higher overall lithium recovery. Modelling, based on the results of cycles 5 and 6 of the 2022 Locked Cycle Test program assuming fresh, pure (>98%) sodium sulphate addition upfront, estimates the amount of lithium lost to the mixed sulphate waste stream as 1.2%. This is now available for recovery in the revised LCP circuit design; and
· Reduction in the overall mixed sulphate waste stream required to be onwards-treated has been achieved, further reducing Opex/t of the end-product.
The updated LCP circuit design with recycling of mixed sulphate into the roast mix results in recycling of approximately 50% of the total mixed sulphate produced. The remaining mixed sulphate will be reprocessed as waste.
Land Acquisition at Dukla Transport Hub
Geomet s.r.o., the Cinovec Project holding company, has acquired the land and buildings of the disused Lesní Brana railway station, proximate to the proposed Dukla transport hub. This site is expected to be cleared and used for the control room for rail operations in and out of the Dukla transport hub, which will handle run-of-mine crushed ore (<70mm) onto trains for transport to the Prunéřov lithium processing plant site and, in the reverse direction, handle backfill material to then be transported by conveyor to the mine portal area for use as mine backfill.
The DFS continues to work towards optimising and maximising the planned mine production and ore transfer by rail to the change of Cinovec processing plant site away from Dukla to Prunéřov. This has enabled the Project team to review maximising the mine outputs and ore transfer by rail utilising only a small proportion of the area available at Dukla and not disturbing existing industrial users at Dukla. This optimisation is not expected to result in an increase in the rail fleet as reagent deliveries are no longer required at the Dukla site.
Just Transition Fund
Representatives of Geomet met with the Regional Standing Conference (“RSK”), in the Czech Republic which is one of the bodies that approves and recommends Just Transition Fund (“JTF“) support,
Geomet has submitted an initial application for funding of a part of the project (called a “sub-project”), which initially included the preliminary mine portal area works – a box-cut (mine entrance), an exploration adit, work on a portal access road. These construction works are able to take place under the existing exploration licenses and not requiring an Environmental Impact Assessment (“EIA”). The total initial grant requested from the JTF has in turn been reduced from CZK 1.12 billion to CZK 0.8 billion (approximately EUR 31 million).
The RSK meeting has recommended the sub-project for JTF support. The next step will be the final funding approval by the Ministry of Environment.
Link here to view the full EMH announcement
Cinovec Lithium/Tin Project
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project. Geomet has been granted a preliminary mining permit by the Ministry of Environment and the Ministry of Industry. The company is owned 49% by EMH and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Measured Mineral Resource of 53.3Mt at 0.48% Li2O and 0.08% Sn, Indicated Mineral Resource of 360.2Mt at 0.44% Li2O and 0.05% Sn and an Inferred Mineral Resource of 294.7Mt at 0.39% Li2O and 0.05% Sn containing a combined 7.39 million tonnes Lithium Carbonate Equivalent and 335.1kt of tin.
Cadence Minerals holds approximately 2.52% per cent of the equity in European Metals Holdings.
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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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Zeus Capital Limited (NOMAD & Broker) |
+44 (0) 20 3829 5000 |
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James Joyce |
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Darshan Patel Isaac Hooper |
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Fortified Securities – Joint Broker |
+44 (0) 20 3411 7773 |
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Guy Wheatley |
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Brand Communications |
+44 (0) 7976 431608 |
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Public & Investor Relations |
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Alan Green |
Cadence Minerals #KDNC – Evergreen Lithium (ASX: EG1) Intercepts Pegmatites at Bynoe
Cadence Minerals (AIM: KDNC; OTC: KDNCY) is pleased to note that ASX listed Evergreen Lithium Limited (“Evergreen”) (ASX: EG1) in which Cadence has an 8.74% equity stake has announced progress from initial exploration activities at its highly prospective Bynoe Project, 50km south of Darwin and directly east of Core Lithium’s Finniss Mine in Australia’s Northern Territory.
Initial aircore drilling in the north of the Bynoe Project has intercepted pegmatitic intrusions in multiple locations. Logging of drill samples at the company’s Lunchbox and Frogmouth prospects has identified pegmatites close to surface.
Highlights:
- Initial aircore drill lines intercept pegmatites at first two prospects at the Bynoe Project, 50km south of Darwin and directly east of Core Lithium’s Finnis Mine.
- Early drilling at Bynoe provides evidence that Core Lithium’s mineralised pegmatite field continues into EverGreen Lithium’s Bynoe Project.
- With an extensive aircore drilling program ongoing at Bynoe, the Company hopes to build upon its early success by identifying additional pegmatites prospective for lithium-spodumene mineralisation.
- A follow-up deeper RC drilling program is being planned to test the newly identified pegmatites below the weathered zone.
Link to view the full Evergreen ASX announcement is available here
Evergreen Exploration Manager Andrew Harwood commented: “Intercepting a blind pegmatite that is not outcropping on your first day of drilling shows that we are at the start of something good. Achieving this early proof of concept gives us confidence in our approach for EverGreen Lithium’s ongoing exploration programs. The field team and drilling contractors have done a great job getting to this point and the program will move forward quickly from here.
“The current program’s objectives involve delineating prospective pegmatites beneath the thin cover units by testing priority geochemical and geophysical targets. Our team at Bynoe are excited by the early success and eagerly anticipate drill testing the numerous pegmatite targets in the coming weeks.
“We are now planning a follow-up reverse circulation (RC) program to test depth and strike extensions of the identified pegmatites, and to understand lithium potential beneath the near surface lithium depleted zone.”
Background to Cadence’s investment in Evergreen Lithium
In July 2022, Cadence Minerals received approximately 15.8 million shares in Evergreen Lithium (“Evergreen”) when Cadence sold its 31.5% stake in Lithium Technologies and Lithium Supplies (“LT and LS”) to Evergreen as announced on 27 June 2022.During 2023 Evergreen was listed on the Australian Stock Exchange (“ASX”). Before listing, Cadence’s equity stake in Evergreen was 13.16%; due to the IPO and associated fundraising, this was reduced to 8.74%.
A further AS$ 6.63 million (£3.80 million) shares in Evergreen are due to Cadence on achieving certain performance milestones by Evergreen. Further details of these milestones can be found in the Evergreen prospectus. Cadence’s shares are subject to a 2-year escrow agreement as determined by the listing rules of the ASX (expiring in May 2025).
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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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Zeus Capital Limited (NOMAD & Broker) |
+44 (0) 20 3829 5000 |
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James Joyce |
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Darshan Patel Isaac Hooper |
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Fortified Securities – Joint Broker |
+44 (0) 20 3411 7773 |
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Guy Wheatley |
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Brand Communications |
+44 (0) 7976 431608 |
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Public & Investor Relations |
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Alan Green |
Cadence Minerals #KDNC – Change of Nominated Adviser and Broker
The Company announces its Nominated Adviser and Broker has changed to Zeus Capital Limited with immediate effect.
This change follows completion of the acquisition by Zeus Capital Limited of the WH Ireland Capital Markets Division (from WH Ireland Limited), announced earlier today.
For further information please 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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Zeus Capital Limited (NOMAD & Broker) |
+44 (0) 20 3829 5000 |
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James Joyce |
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Darshan Patel Isaac Hooper |
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Fortified Securities – Joint Broker |
+44 (0) 20 3411 7773 |
|
Guy Wheatley |
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|
Brand Communications |
+44 (0) 7976 431608 |
|
Public & Investor Relations |
|
|
Alan Green |
Alan Green covers Cadence Minerals #KDNC, ECR Minerals #ECR & Helix Exploration #HEX on this week’s Stockbox Research Talks
Alan Green covers Cadence Minerals #KDNC, ECR Minerals #ECR & Helix Exploration #HEX on this week’s Stockbox Research Talks
Cadence Minerals #KDNC – Fundraise to raise £750,000 for further Amapa Project activities
Cadence Minerals (AIM: KDNC) announces that it has successfully raised, subject to Admission, £625,000 before expenses (the “Placing”) by the way of a placing arranged by Fortified Securities of 25,000,000 new ordinary shares (the “New Ordinary Shares”) in the capital of the Company at a price of 2.5 pence per Ordinary Share (the “Issue Price”).
In addition to the above subscription, Andrew Suckling, Kiran Morzaria, and Donald Strang (together, the “Subscriber Directors”) have also agreed to subscribe for an aggregate of 5,000,000 New Ordinary Shares at the Issue Price, raising gross proceeds of £125,000 (“Subscription”).
The Issue Price represents a discount of approximately 18 per cent to the closing price of 3.05 pence per ordinary share on 11 July 2024, being the latest practicable business day prior to the publication of this Announcement.
Use of Funds
The net proceeds of the fundraise will be used to fund Cadence’s investment in the Amapá Iron Ore Project in Brazil (“Amapá”, “Project” or “Amapá Project”), specifically:
- The continued testing of the 67% Fe “Green Iron” product flow sheet, to a PFS level or accuracy.
- Prepare and publish a revised PFS economic model should the 67% flow sheet be successful that reflects the increase pricing anticipated from the product and any change in capital or operating expenditure in the revised flowsheet.
- General working capital at the Amapá Project and ongoing funding for the licensing for the tailing storage facility.
Related Party Transactions
As the Directors of the Company, being the Subscribing Directors, are considered to be “related parties” as defined under the AIM Rules, their participation in the Subscription constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules.
| Director | Subscription Amount | No. of New Ordinary Shares subscribed for | Resulting shareholding in the Company | % shareholding in the Company’s issued share capital as enlarged by the Placing |
| Andrew Suckling
(Non-Executive Chair) |
£40,000 | 1,600,000 | 1,981,602 | 0.87% |
| Kiran Morzaria
(Chief Executive Officer) |
£45,000 | 1,800,000 | 3,373,240 | 1.48% |
| Donald Strang
(Finance Director) |
£40,000 | 1,600,000 | 2,557,545 | 1.12% |
| Adrian Fairbourn
(Non-Executive Director) |
Nil | Nil | 731,005 | 0.32% |
| Total | £125,000 | 5,000,000 | 8,643,392 | 3.79% |
Adrian Fairbourn, being a Director of the Company independent of the fundraise, having consulted with Cadence Mineral’s Nominated Adviser, WH Ireland Limited, consider the terms of the fundraise to be fair and reasonable insofar as the Company’s shareholders are concerned.
Application will be made for the admission to trading on the AIM market (“AIM”) of London Stock Exchange plc (“LSE”) for the New Ordinary Shares (“Admission”). Admission is expected to occur at 8.00 a.m. on or around 19 July 2024. The New Ordinary Shares will represent approximately 13.2 per cent. of the Company’s issued share capital immediately following Admission.
Following Admission, the Company’s issued and fully paid share capital will consist of 227,637,704 Ordinary Shares, all of which carry one voting right per share. The Company does not hold any Ordinary Shares in treasury. The figure of 227,637,704 Ordinary Shares may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.
The New Ordinary Shares will be issued fully paid and will rank pari passu in all respects with the Company’s existing Ordinary Shares.
| 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
Isaac Hooper |
|
| Fortified Securities – Joint Broker | +44 (0) 20 3411 7773 |
| Guy Wheatley | |
| Brand Communications | +44 (0) 7976 431608 |
| Public & Investor Relations | |
| Alan Green |
In accordance with Article 19 of the UK Market Abuse Regulation, detailed information is set out below.
| 1 | Details of the person discharging managerial responsibilities/person closely associated | ||||
| a) | Name: | Andrew Suckling | |||
| 2 | Reason for the notification | ||||
| a) | Position/Status: | Non-Executive Chair | |||
| b) | Initial Notification/Amendment: | Initial Notification | |||
| 3 | Details of the issuer, emission allowance market participation, auction platform, auctioneer or auction monitor | ||||
| a) | Name: | Cadence Minerals plc | |||
| b) | LEI: |
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|||
| 4. | Details of 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:
Identification code: |
Ordinary shares of £0.01
ISIN: GB00BJP0B151 |
|||
| b) | Nature of the transaction: | Purchase of Shares | |||
| c) | Price(s) and volume(s): | Price(s) | Volume(s) | ||
| 2.5p | 1,600,000 | ||||
| d) | Aggregated volume:
Price: |
1,600,000
£40,000 |
|||
| e) | Date of the Transaction: | 11 July 2024 | |||
| f) | Place of the Transaction: | London Stock Exchange | |||
| 1 | Details of the person discharging managerial responsibilities/person closely associated | ||||
| a) | Name: | Kiran Morzaria | |||
| 2 | Reason for the notification | ||||
| a) | Position/Status: | Chief Executive Officer | |||
| b) | Initial Notification/Amendment: | Initial Notification | |||
| 3 | Details of the issuer, emission allowance market participation, auction platform, auctioneer or auction monitor | ||||
| a) | Name: | Cadence Minerals plc | |||
| b) | LEI: |
|
|||
| 4. | Details of 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:
Identification code: |
Ordinary shares of £0.01
ISIN: GB00BJP0B151 |
|||
| b) | Nature of the transaction: | Purchase of Shares | |||
| c) | Price(s) and volume(s): | Price(s) | Volume(s) | ||
| 2.5p | 1,800,000 | ||||
| d) | Aggregated volume:
Price: |
1,800,000
£45,000 |
|||
| e) | Date of the Transaction: | 11 July 2024 | |||
| f) | Place of the Transaction: | London Stock Exchange | |||
| 1 | Details of the person discharging managerial responsibilities/person closely associated | ||||
| a) | Name: | Donald Strang | |||
| 2 | Reason for the notification | ||||
| a) | Position/Status: | Finance Director | |||
| b) | Initial Notification/Amendment: | Initial Notification | |||
| 3 | Details of the issuer, emission allowance market participation, auction platform, auctioneer or auction monitor | ||||
| a) | Name: | Cadence Minerals plc | |||
| b) | LEI: |
|
|||
| 4. | Details of 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:
Identification code: |
Ordinary shares of £0.01
ISIN: GB00BJP0B151 |
|||
| b) | Nature of the transaction: | Purchase of Shares | |||
| c) | Price(s) and volume(s): | Price(s) | Volume(s) | ||
| 2.5p | 1,600,000 | ||||
| d) | Aggregated volume:
Price: |
1,600,000
£40,000 |
|||
| e) | Date of the Transaction: | 11 July 2024 | |||
| f) | Place of the Transaction: | London Stock Exchange | |||