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Cadence Minerals plc (AIM:KDNC) is pleased to announce its interim results for the six months ended 30 June 2025.

Highlights

·      Robust economics confirmed: Updated Pre-Feasibility Study (December 2024) delivered a post-tax NPV of US$1.97 billion, a 42% IRR, and forecast average free cash flow of US$342 million per year over a 15-year mine life.

·      Early cashflow catalyst underway: Staged development pathway launched with the recommissioning of the Azteca Plant – targeting approximately 380,000 tonnes per annum of 65% Fe concentrate, with only US$3.5 million pre-production capex.

·      Funding secured with limited dilution: Heads of Terms signed for a US$4.6 million prepayment offtake facility with a global trading partner. Cadence will contribute 10-15% of the prepay, targeting a circa 70% IRR on its share.

·      Competitive cost base: Mining costs across the Amapá Project reduced by 36.7% to US$11.17/dmt, lowering overall FOB costs to US$27.28/dry metric tonnes (“dmt”) and cost and freight (“CFR”) costs to US$55.46/dmt – positioning Amapá amongst the lowest-cost global producers.

·      Clear near-term catalysts: Licence issuance, Azteca restart, and reinvestment of free cashflow into DFS and early works provide a de-risked bridge to the full 5.5 million tonnes per annum (“Mtpa”) DR-grade project.

Cadence has entered a transformational phase. In just six months we have moved from project optimisation to a clear, de-risked pathway that can deliver cashflow, growth, and attractive returns for shareholders.

Our strategy is deliberately phased. By restarting the Azteca Plant with modest upfront capital, we can generate near-term revenue, reinforce our licence to operate, and showcase the quality of Amapá’s product to the market. At the same time, we are laying the foundations for the full 5.5 Mtpa operation – a low-cost, DR-grade project with a US$1.97 billion NPV.

The conditional funding agreement signed with a global trading group highlights confidence in Amapá’s robust economics while reducing dilution for shareholders. Subject to final contracts and assay confirmation, funding for the Azteca Plant will be structured through an offtake arrangement. The offtaker is expected to provide the majority of capital, with Cadence contributing only 10-15%. Both parties will fund their share upon execution. 

Cadence’s immediate priorities are to finalise and the complete the offtake agreement. These milestones set in motion a clear sequence: licensing, construction, recommissioning, first production and cashflow. This phased approach is designed to minimise upfront equity dilution, rapidly demonstrate production capability, and create early revenues that can be reinvested to drive long-term growth and shareholder value at Amapá. 

Outlook

Cadence’s flagship Amapá Project is advancing rapidly under a disciplined, staged development plan. With licences approaching approval and funding secured through an innovative offtake structure, Amapá is positioned to transition from developer to producer in the near term.

The Board believes Cadence remains deeply undervalued relative to its asset base. With an equity stake of approximately 35% in a project carrying a US$1.97 billion NPV, and near-term cashflow from Azteca, the Company has a clear bridge from today’s modest market capitalisation to a substantially higher valuation as milestones are achieved. 

INVESTMENT REVIEW

Cadence Minerals follows a two-pronged investment strategy, focusing on private investments where it can add value through active participation, and public equity investments that offer exposure to assets with growth potential.

PRIVATE INVESTMENTS, ACTIVE

The Amapá Iron Ore Project, Brazil
Interest – 35.7% at 30/06/2025

The Amapá Project is a fully integrated iron ore mine with associated rail, port, and beneficiation facilities. The Project commenced operations in 2007, producing 6.1 million tonnes of concentrate in 2012, before suspension in 2014 following a port geotechnical failure. 

Investment

In 2019, Cadence entered into a binding investment agreement to acquire up to 27% of Amapá, with the right to increase to 49%. By June 2025, Cadence had invested approximately US$15.5 million for a 35.7% interest in the Project. 

Operations Review

During the reporting period, Cadence and its partners made substantial progress on the staged development pathway: 

·      Azteca Plant Restart: Heads of Terms signed with an international offtaker for a US$4.6 million prepayment facility to finance licensing, refurbishment, and restart. The plant is expected to produce approximately 380,000 tpa of 65% Fe concentrate, generating circa US$32 million free cash flow over three years, with first shipments forecast within months of licence approval. Cadence will contribute approximately 10-15% of funding, with the balance provided by the offtaker.

·      Cost Optimisation for full Amapá Project: Mining contract re-quotes lowered mining costs by 37%, reducing overall FOB costs to US$27.28/dmt and CFR costs to US$55.46/dmt, positioning Amapá among the lowest-cost producers globally.

·      Environmental Licensing: By June 2025, the vast majority of requirements for mine had been completed. Outstanding supplementary studies (archaeological and water/sewage systems) are expected to conclude prior to the Azteca Plant restart. 

Updated Pre-Feasibility Study (PFS)

The December 2024 optimisation of the Pre-Feasibility Study (“PFS”) reaffirmed Amapá’s potential to deliver 5.5 Mtpa of 67.5% Fe DR-grade concentrate with improved economics. 

As part of this work, engineering consultants identified higher plant availability, enabling a greater annual run-of-mine feed rate. This prompted a re-examination of the mine plan and associated disciplines to further optimise project returns. 

The revised schedule now supports a 15-year mine life at a 25% Fe cut-off, with 13-14 Mtpa of ore delivered to the plant and a low life-of-mine strip ratio of 0.4:1 (waste: ore). This favourable ratio underpins the Project’s robust cost profile and positions it firmly within the lower quartile of the global cost curve[1]. 

An updated financial model was prepared to incorporate the new mine plan, reduced capital expenditure, and materially lower operating costs secured through re-quoted mining contracts. All other assumptions were retained from the December 2024 PFS. While the model assumes 100% equity funding for presentation purposes, actual financing will comprise a mix of debt and equity. The results confirm a materially stronger economic case for Amapá, as outlined in Table 1.1. 

Table 1.1 Key Project Metrics (100% Project basis)

Project Permitting

The Amapá Project continues to benefit from its prior operational history, enabling the Amapá State Environmental Agency (“SEMA”) to endorse an expedited licensing pathway. Ordinarily, a licensing cycle can take up to five years; however, SEMA has agreed to a compressed process based on previously approved studies, existing environmental data, and agreed Terms of Reference. 

By mid-2025, material progress had been made across all three-installation licence (“LI”) applications:

·      Mine LI: Largely complete, with only a supplementary archaeological survey and final water and sewage system designs outstanding.

·      Railway LI: Substantially advanced, requiring only final technical steps and community engagement programmes.

·      Port LI: The most complex due to the historic geotechnical failure; additional technical studies have been requested, although both state and federal authorities remain supportive. 

In parallel, work to recommission the Tailings Storage Facility (“TSF”) is progressing. A LIDAR survey is under way to finalise the dam break study, after which remote monitoring and community early-warning systems will be installed as part of the Azteca capital programme.

The Mine LI and TSF approvals remain the critical path items for the Azteca Plant restart and will be financed initially through the prepay offtake agreement. 

Secured Bank Settlement Iron Ore Shipments

An in-principal settlement with secured bank creditors was agreed in early 2024. Finalisation has been delayed by approvals and pricing conditions, but management remains confident in concluding the process as iron ore market conditions improve. 

Development Plan

Cadence and its partners remain committed to a phased development strategy: 

·      Near-term:  Cadence funding to meet development costs for Amapá and Azteca, finalisation of the Azteca offtake agreement, completion of final licences, and restart of the Azteca Plant, generating cash flow within months of licence approval.

·      Medium-term: Reinvest free cash flow into working capital, the Definitive Feasibility Study, and early works.

·      Long-term: Full recommissioning of the mine, beneficiation plant, railway, and port to deliver 5.5 Mtpa of DR-grade concentrate. Discussions with potential joint venture and strategic partners are ongoing to fund and de-risk this phase of development. 

PRIVATE INVESTMENTS, PASSIVE

Sonora Lithium Project, Mexico
Interest – 30% at 30/06/2025

Cadence holds a 30% interest in the joint venture companies Mexalit S.A. de C.V. and Megalit S.A. de C.V., alongside majority partner Ganfeng Lithium Group, in the Sonora Lithium Project, Mexico. The concessions historically comprised nine licence areas, including El Sauz, Fleur, Buenavista, and San Gabriel, with Ganfeng developing plans for an open pit mine and lithium hydroxide processing facility. 

In 2022 and 2023, Mexico amended its Mining Law to classify lithium as a strategic resource reserved for the state. Despite expectations that pre-existing concessions would remain valid, in August 2023 the General Directorate of Mines cancelled nine concessions, including those held by Mexalit and Megalit, citing alleged non-compliance with investment obligations. Cadence and Ganfeng strongly refute these claims, having demonstrated that required thresholds were met and exceeded.

In May 2024, Ganfeng initiated arbitration before the International Centre for Settlement of Investment Disputes (ICSID), challenging the cancellations and broader legislative measures as violations of international law. In parallel, Cadence has decided to pursue its own international arbitration under the UK-Mexico Bilateral Investment Treaty, ensuring independent protection of its legal and economic rights.

Cadence believes the actions of the Mexican authorities amount to unlawful expropriation, denial of fair and equitable treatment, and breaches of due process. The Company remains fully committed to safeguarding its 30% interest in Sonora and to pursuing all available remedies to protect shareholder value. 

PUBLIC INVESTMENTS

Evergreen Lithium Limited (ASX: EG1)
Interest – 5.1% at 30/06/2025

During the six months to June 2025, Evergreen pivoted its exploration strategy following mixed results at its Bynoe Lithium Project in the Northern Territory. While drilling confirmed pegmatite bodies, assays did not identify commercial lithium mineralisation, leading to a $12.5m impairment and a decision to limit further lithium exploration at Bynoe. Exploration did, however, highlight gold-bearing structures, which will be the focus of follow-up work.

In May 2025 Evergreen completed the acquisition of the Leonora Goldfields Project in Western Australia, containing a JORC-compliant 63,000oz inferred resource. Initial mapping and site work are defining drill targets with the aim of expanding the resource base, firmly repositioning Evergreen toward the gold sector. Subsequent to the period end Cadence disposed of its interest in Evergreen Lithium.

FINANCIAL RESULTS

During the period the Group made a loss before taxation of £0.841 million (6 months ended 30 June 2024: £2.535 million, year ended 31 December 2024: £3.325 million). There was a weighted basic loss per share of 0.290p (30 June 2024: 1.392p, 31 December 2024: 1.651p).  The total assets of the group decreased from £18.45 million at 31 December 2024 to £17.66 million. During the period our net cash outflow from operating activities was £0.267 million, gross proceeds of £0.121m were raised through loans and our net cash position was down £0.65 million at £0.003 million.

For further information:

Link here for full financial statements