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Cadence Minerals #KDNC – Investment Update

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

Highlights:

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

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

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

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

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

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

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

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

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

European Metals Holdings (“EMH”)

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

Highlights

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

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

Other Investments

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

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

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

The full announcement concerning the Yangibana sale is available here

For further information:

 

Cadence Minerals plc +44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
 

WH Ireland Limited (NOMAD & Broker)

 

+44 (0) 207 220 1666

James Joyce
Darshan Patel

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement. 

Forward-Looking Statements

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as “believe” “could” “should” “envisage” “estimate” “intend” “may” “plan” “will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance, future capital and other expenditures (including the amount, nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

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

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

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

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that DEV Mineração S/A (“DEV”) has completed a new Mineral Resource Estimate (“MRE”) in compliance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code, 2012”) for the Amapá Iron Ore Project Brazil.

Highlights:

  • Substantial increase in total Measured, Indicated and Inferred Mineral Resources, to 276.24 Million Tonnes (“Mt”) grading 38.33% Fe
  • New Measured Resource of 55.33 Mt grading 26% Fe
  • Measured and Indicated Resource increase to 229.48 Mt at 38.76% Fe, from 176.7 Mt at 39.75% Fe[1] , reported within an optimised pit shell and using a cut-off grade of 25% Fe.
  • Inferred Mineral Resource increased to 46.76 Mt at 36.20% Fe, from 8.7Mt at 36.9% Fe, reported within an optimised pit shell and using a cut-off grade of 25% Fe.

Cadence CEO Kiran Morzaria commented:

“The main aim of our new mineral resource statement was to provide a sound basis for pre-feasibility studies. In particular, to convert a significant portion of the indicated mineral resource into the measured category. The results reported today have achieved this goal and more.

The results clearly indicate the robustness and consistency of the Amapá resource. 

As we move closer to the next stage of development, this higher degree of certainty in our mineral resource estimate provides more funding options for the Project. The new measured resource and the overall increase in the mineral resource provides a sound basis for an initial 15-year mine life, with the potential to expand this further by upgrading the 46.76 Mt of inferred resources.” 

Assumptions and Method of MRE

Prominas Mining Ltd (“Prominas”) was commissioned by DEV Mineração S/A (“DEV”) to complete a JORC Code (2012) compliant MRE on the 100% owned mineral assets of DEV comprising the Amapá Iron Ore Deposit (“Amapá” or the “Project”) located in Amapá State, Brazil. DEV holds the mining rights to the Project, and Cadence, via a joint venture company, owns 27% of DEV. The classification of Mineral Resources was considered appropriate on the basis of geological confidence, drill spacing, sample interval, QAQC and estimation performance.

Before this MRE, the most recent MRE on the Amapá Project was completed in 2020 by Cadence (“2020 MRE”). The 2020 MRE was estimated following the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) “Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines” (CIM, 2019). The 2020 MRE was limited to the Friable Hematite, Friable Itabirite and Friable Altered Itabirite material types. While the current MRE included these material types plus Colluvium and Canga material within the resource statement. This inclusion of Colluvium and Canga into the MRE was deemed appropriate as it was used as ore in historic production. The inclusion of Colluvium and Canga in the MRE represents the majority of the increase in the current MRE.

The geologic units that underlie the region consist of Archean basement rocks, TTG terrains (Guianense Complex, Tumucumaque Complex and Água Fria Metatonalite), discordantly overlaid by Paleoproterozoic greenstone belts (Vila Nova Group), in turn, overlain by Cenozoic lateritic deposits and Quaternary alluvial materials. In the Amapá System area, the iron ore (oxide and silicate facies itabirites), calc-silicate and carbonatic rocks occur in two regions. The first is a synform (locally named APW/APS) above the unit of metabasic rocks (mainly amphibolites) and quartz mica schist biotite and muscovite-bearing schist, where the mine is located. The second is Dragão, a mineralised body located 3.5km to NE with orientation NW/SE, assumed as a potential resource and not included in this mineral resources estimate.

Mineralisation extends approximately 6.5km in strike length, 1.5km in width, and exists in some areas to more than 100m in depth. Geological processes have weathered this proto-resource, the hard itabirite (ITC), actually considered waste, transforming part of the volume into mineral resources, the soft itabirite (ITB) illustrated in Figure 1 -Amapá Iron Ore Mineralisation here

A 3D geological model was built by an implicit modelling method based on interpreted geological domains using the drillhole database and study of the old sections provided by DEV, then used to flag the sample data for statistical analysis and to limit the resource estimation. For this study, statistical and geostatistical analysis was carried out on drilling data composited to 4 m downhole for APW/APS only. This included variography to model spatial continuity relationships in the geological domains.

Geostatistical analysis and interpolation were undertaken using MinePlan© proprietary software. The Ordinary Kriging interpolation method was used for the estimation of Fe, Al2O3, SiO2, P, and Mn, using variogram parameters defined from the geostatistical analysis for the APW/APS domains.

Wet Bulk density values for the Amapá deposit were assigned based on data provided by DEV. The density values were assigned to 15 lithologies based on almost 678 density samples for friable and compact material collected from 2006 to 2012.

Mineral Resource Statement

The MRE has been reported at a cut-off grade of 25% Fe constrained by a resource open pit and the topography dated April 2014 (grey surface in Figure 1 here), in line with the Reasonable Prospects For Eventual Economic Extraction (RPEEE) principle. The MRE has been estimated, considering a product revenue of US$ 120/t. The geotechnical parameters, metallurgical recovery and updated mining costs were all provided by DEV.

Table 1:      Gross and attributable Mineral Resources for the Amapá Iron Ore Project at a Cut-Off Grade reported within an optimised pit and above a cut-off grade of 25% Fe

Classification Material Tonnage (Mt) Attributable
Tonnage
(Mt)
Fe

(%)

SiO2(%) Al2O3(%) P

 (%)

Mn (%)
Measured Friable Altered Itabirite 33.31 8.99 38.47 30.42 7.22 0.170 1.19
Friable Itabirite 14.65 3.96 39.55 36.50 2.81 0.086 0.88
Friable Haematite 0.69 0.19 62.63 4.32 2.20 0.226 0.38
Colluvium 5.84 1.58 38.80 21.66 11.89 0.177 0.70
Canga 0.84 0.23 50.03 5.68 10.60 0.971 0.18
Sub-total 55.33 14.94 39.26 30.40 6.54 0.161 1.03
Indicated Friable Altered Itabirite 66.43 17.94 37.41 32.11 6.73 0.173 1.29
Friable Itabirite 37.14 10.03 39.73 35.73 2.91 0.103 0.92
Friable Haematite 1.5 0.41 57.53 12.85 2.18 0.113 0.43
Colluvium 64.22 17.34 37.98 23.11 11.86 0.140 0.58
Canga 4.86 1.31 48.81 8.98 10.08 0.579 0.21
Sub-total 174.15 47.02 38.60 28.75 7.86 0.156 0.91
Mea. + Ind. Friable Altered Itabirite 99.74 26.93 37.76 31.55 6.89 0.172 1.26
Friable Itabirite 51.79 13.98 39.68 35.95 2.88 0.098 0.91
Friable Haematite 2.19 0.59 59.14 10.16 2.19 0.149 0.41
Colluvium 70.06 18.92 38.05 22.99 11.86 0.143 0.59
Canga 5.7 1.54 48.99 8.49 10.16 0.637 0.21
Sub-total 229.48 61.96 38.76 29.15 7.54 0.157 0.94
Inferred Friable Altered Itabirite 11.27 3.04 37.01 31.98 6.40 0.190 1.67
Friable Itabirite 3.09 0.83 38.60 35.35 3.28 0.144 1.41
Friable Haematite 0.53 0.14 50.06 21.36 2.88 0.094 0.85
Colluvium 30.21 8.16 34.80 26.20 12.92 0.107 0.53
Canga 1.66 0.45 47.19 11.60 9.98 0.381 0.27
Sub-total 46.76 12.63 36.20 27.62 10.49 0.139 0.86
TOTAL 276.24 74.58 38.33 28.89 8.04 0.154 0.93

 

Notes:

(1) The Mineral Resource is considered to have reasonable prospects for eventual economic extraction based on an optimised pit shell

(2) Cut-off grade of 25% Fe applied

(3) Tonnages are reported as wet tonnes

(4) Mineral Resources are not reserves until they have demonstrated economic viability based on a Feasibility Study or Pre-Feasibility Study

(5) The Mineral Resource Estimate has an effective date of 31 August 2022

(6) Mineral Resources have been classified in accordance with the Australian Code for Reporting of Exploration Results. Mineral Resources and Ore Reserves (JORC Code 2012)

(7) The attributable tonnes represent the part of the Mineral Resource that will be attributable to Cadence Minerals’ 27% interest in the Project

(8) The operator is DEV

A 3D schematic model of the Amapá Mineral Resource Estimate is available here

Prominas notes that the Mineral Resource has a reasonable prospect for eventual economic extraction but is not currently considered Ore Reserves. Ore Reserves are estimates of the tonnage and grade or quality of material contained in a Mineral Resource that can be economically mined and processed. To be considered an Ore Reserve, modifying factors must be applied to the MRE as part of the preparation of a Pre-Feasibility or Feasibility Study. The estimated amount of saleable material contained in the final product must demonstrate a positive net present value using an appropriate discount rate and must demonstrate that eventual extraction could be reasonably justified.

Prominas are not aware of any factors (environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors) that have materially affected the Mineral Resource Estimate. The data used for the MRE update were drill hole databases with proper validations, topographic surveys and the previous Mineral Resource models provided by DEV with the work undertaken by Prominas, which included several site visits during 2021.

As required per the JORC Code 2012. Table 1 needed for the reporting of MREs is available here

Competent Person’s Statement

The information that relates to Mineral Resources is based on information compiled by Geraldo Majella, who is an associate of Prominas and a Member of the Australian Institute of Geoscientists (AIG). Geraldo Majella has sufficient relevant experience to the style of mineralisation and type of deposit under consideration and to the activity for which he is undertaking to qualify as a Competent Person as defined in the JORC Code (2012). Geraldo Majella consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

Kiran Morzaria has also reviewed and approved the technical information in his capacity as a qualified person under the AIM Rules.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 

Forward-Looking Statements

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance, future capital and other expenditures (including the amount, nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

Glossary

 

Al2O3 Aluminium oxide is a chemical compound of aluminium and oxygen.

 

Block model A three-dimensional electronic model in which geological characteristics and qualities are housed.
Canga An iron-rich rock formed where material weathered from an original iron ore deposit has been cemented by iron minerals.
Colluvium Loose. unconsolidated material that accumulates above the weathering iron ore bodies.
Core A cylindrical section of a naturally occurring substance. Most core samples are obtained by drilling with special drills into the substance, such as sediment or rock, with a hollow steel tube, called a core drill. The hole made for the core sample is called the “core hole.”
Cut-off grade The lowest grade of mineralised material that qualifies as ore in a given deposit or rock of the lowest assay included in an ore estimate.
Drillhole A drill hole formed by the act or process of drilling boreholes using bits asthe rock-cutting tool. The bits are rotated by various types and sizes of mechanisms motivated by steam, internal-combustion, hydraulic, compressed air, or electric engines or motors.
Fe Chemical symbol for iron. It is a metal that belongs to the first transition series and group 8 of the periodic table. It is by mass the most common element on Earth, right in front of oxygen (32.1% and 30.1%. respectively), forming much of Earth’s outer and inner core. It is the fourth most common element in the Earth’s crust.
Feasibility study This study is the most detailed and will determine definitively whether to proceed with the Project. A detailed feasibility study will be the basis for capital appropriation and will provide the budget figures for the Project. Detailed feasibility studies require a significant amount of formal engineering work, are accurate to within 10-15% and can cost between ½-1½% of the total estimated project cost.
Itabirite Itabirite is a banded quartz hematite schist, very similar to banded iron formation in appearance and composition. Friable Itabirite is extensively weathered leading to disaggregation of the individual mineral grains comprising the rock;
Haematite An iron oxide mineral with the chemical formula Fe2O3;
Grade Relative quantity or the percentage of ore mineral or metal content in an ore body;
Indicated Mineral Resources That part of a Mineral Resource for which tonnage, densities, shape,physical characteristics, grade, and mineral content can be estimated with a reasonable level of confidence. It is based on exploration. sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed;
Inferred Mineral Resources That part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes which may be limited or of uncertain quality and reliability;
Interpolation Estimation of a statistical value from its mathematical or graphical position intermediate in a series of determined points;
Kt Thousand tonnes;
Lithologies The lithology of a rock unit is a description of its physical characteristics visible at outcrop, in hand or core samples, or with low magnification microscopy. Physical characteristics include colour, texture, grain size, and composition;
Measured Mineral Resources The part of a Mineral Resource for which tonnage, densities, shape,physical characteristics, grade, and mineral content can be estimated with a high level of confidence.
Mineral Reserves The economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out and include consideration of and modification by realistically assumed mining, metallurgical, economic,marketing, legal, environmental, social, and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Ore Reserves are subdivided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves.
Mineral Resource A concentration or occurrence of material of intrinsic economic interest in or on the Earth’s crust in such form, quality, and quantity that there are reasonable prospects for eventual economic extraction. The location,quantity, grade, geological characteristics, and continuity of a Mineral Resource are known, estimated, or interpreted from specific geological evidence and knowledge. Mineral Resources are subdivided, in order of increasing geological confidence into Inferred, Indicated and Measured categories.
Mn Chemical symbol for Manganese. It has an atomic number 25. It is not found as a free element in nature; it is often found in minerals in combination with iron.
Implicit modelling Implicit modelling is generated by computer algorithms directly from a combination of measured data and user interpretation. The modelling requires a geologist’s insight, but this is made in the form of trends,stratigraphic sequences, and other geologically meaningful terms. This approach is faster, more flexible, and fundamentally better suited to modelling geology.
Modifying factors The term ‘modifying factors’ is defined to include mining, metallurgical,economic, marketing, legal, environmental, social and governmental considerations.
Net present value This is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyse the profitability of a projected investment or Project.
Open pit An excavation or cut made at the surface of the ground for the purpose of extracting ore and which is open to the surface for the duration of the mine’s life
Ordinary kriging In the estimation of mineral resources by geostatistical methods, the use of a weighted moving-average approach both to account for the estimated values of spatially distributed variables, and to assess the probable error associated with the estimates.
P The chemical symbol for Phosphorus with atomic number 15.
Pit Optimisation A process whereby a series of optimised shells for open pits are generated each corresponding to a specific commodity price assumption.
Pit shell A design of a open-pit obtained from the process of open-pit optimisation
Pre Feasibility study Is more detailed than a Scoping Study. A Prefeasibility study is used in determining whether to proceed with a detailed feasibility study and as a “reality check” to determine areas within the Project that require more attention. Pre-Feasibility studies are done by factoring known unit costsand by estimating gross dimensions or quantities once conceptual or preliminary engineering and mine design has been completed. Pre-Feasibility studies have an accuracy within 20-30%.
Scoping study An order of magnitude study is an initial financial appraisal of a mineral resource. Depending on the size of the Project, an order of magnitude study may be carried out. It will involve a preliminary mine plan and is the basis for determining whether to proceed with more detailed engineering work. Order-of-magnitude studies are developed by copying plans and factoring known costs from existing projects completed elsewhere and are accurate to within 40–50%;
SiO2 Silicon dioxide, also known as silica, is an oxide of silicon most commonly found in nature as quartz and in various living organisms. In many parts of the world, silica is the major constituent of sand.
Strike This is the direction of the line formed by the intersection of a fault, bed, or other planar feature and a horizontal plane. Strike indicates the attitude or position of linear structural features such as faults, beds, joints, and folds.
t Tonnes

– Ends –

For further information:

 

Cadence Minerals plc +44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker) +44 (0) 207 220 1666
James Joyce
Darshan Patel

[1] Cadence Minerals 2 November 2020 Update Mineral Resource Estimate – Amapa Iron Ore, Available at https://www.londonstockexchange.com/news-article/KDNC/updated-mineral-resource-estimate-amapa-iron-ore/14739627.

Cadence Minerals #KDNC – Director Share Purchases

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

Director

Position

Number of ordinary shares acquired

Price paid per share (£)

Kiran Morzaria

Director & CEO

100,558

0.099

 

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

 

Director

Position

Total holding of ordinary shares

Kiran Morzaria

Director & CEO

1,426,980

Donald Strang

Finance Director

957,545

Andrew Suckling

Non-Executive Chairman

381,602

Adrian Fairbourn

Non-Executive Director

731,005

 

– Ends –

Cadence Minerals plc

                                                        +44 (0) 20 3582 6636

Andrew Suckling

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)

                                                     +44 (0) 207 220 1666

James Joyce

Darshan Patel

 

 

 

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

1

Details of the person discharging managerial responsibilities/person closely associated

a)

Name

Kiran Morzaria

2

Reason for the notification

a)

Position/status

Director & CEO

b)

Initial notification/ Amendment

Initial notification

3

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

a)

Name

Cadence Minerals PLC

b)

LEI

213800TUZWG9C2GRNO58

4

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

a)

Description of the financial instrument, type of instrument

 

Identification code

Ordinary Share

 

 

GB00B067JC96

b)

Nature of the transaction

Share Purchase, Share Incentive Scheme

c)

Price(s) and volume(s)

Price(s)

Volume(s)

£0.099

100,558

d)

Aggregated information

–      Aggregated volume

–      Price

 

100,558

£0.099

 

e)

Date of the transaction

11/07/2022

f)

Place of the transaction

XLON, AIM

 

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

Cadence Minerals #KDNC Completes sale of 31.5% Equity Stake in Lithium Technologies and Lithium Supplies. Plus Amapa Project Update

Cadence is pleased to announce that further to its announcement of 30 March 2022, the Company has completed the sale of its 31.5% stake in in Lithium Technologies and Lithium Supplies (“LT and LS”) to Evergreen PTY Ltd (“Evergreen”). Evergreen is a unlisted Australian company which is intending to list on the Australian stock exchange.

Highlights:

  • Cadence and all LT and LS shareholders have completed the sale of 100% of LT and LS for up to A$21.05 million (£12.08 million)
  • Cadence owns 31.5% of LT and LS and has received AS$3.16 million (£1.81 million) in Evergreen shares.
  • Subject to Evergreen achieving performance benchmarks Cadence would receive a total consideration of A$6.63 million (£3.80 million)
  • Evergreen will spend a minimum of A$4 million over the next three years on the exploration of the prospective Litchfield lithium prospect (“Litchfield”) in Northern Australia.

Cadence CEO Kiran Morzaria commented: “On behalf of the Cadence board and other LT and LS shareholders, we are pleased to report the completion of the sale of our investment in LT and LS”

“Recent exploration and sampling work at the Litchfield project, along with the project’s proximity to Core Lithium’s assets have led us to believe that Litchfield has considerable potential to host lithium mineralisation.”

“For Cadence, this transaction provides an excellent opportunity to retain exposure to the booming hard rock lithium market in Australia. The consideration is being paid entirely in shares, and given that Evergreen intends to list on the Australian Stock Exchange, we will potentially have exposure to any future upside. Hard rock lithium assets have seen excellent returns of late, plus we also have a commitment that Evergreen will spend at least A$ 4 million to explore the primary assets.”

Background to Transaction

The consideration for LT and LS is up to A$ 21.05 million (£11.82 million). Cadence has 31.5% of LT and LS and will receive up to A$ 6.63 (£3.80 million).

Evergreen is unlisted public company in Australia which has been spedifically incorporaed for the acquistion of lithium assets. The acqusition of LT and LS is its first acquistion. It raised AS$ 6 million to pursue this strategy. Evergreen now plans to list on the Australian Stock Exchange.

During the completion process and in consultation with the applicable regulatory bodies, Evergreen was restricted from offering cash consideration, therefore the consideration will be entirely settled in Evergreen shares.

As such the consideration that has been paid is AS$3.16 million (£1.81 million) in Evergreen shares, or  15,830,136 shares at A$0.20 per share which represents 13.16% of Evergreen.

Once the performance milestones are achieved (which can be found here), the consideration would also be paid in Evergreen shares, of which Cadence would receive an additional AS$3.47 million (£1.99 million). The pricing of Evergreen sahres associated with this consideration is based on a defined pricing mechanism linked to the VWAP and date at which the preformance milestones are achieved.

If the preformance targets are met the total consideration for Cadence’s equity stake in LT and LS would be AS$6.63 million (£3.80 million).

LT and LS, through their subsidiaries, are the holders of two exploration licenses in the Northern Territory, one granted and one in the application phase. LT and LS further hold seven exploration license applications in Argentina.

All of the licenses and applications target potential hard rock lithium deposits. The most significant of these is the Litchfield lithium prospect, which is contiguous to Core Lithium’s (ASX: CXO) strategic Finniss Lithium Project (JORC compliant ore reserves: 7.4Mt @ 1.3% Li2O).

The Buyer has committed to spending at least A$4 million on the exploration of Litchfield during the three years post the completion of the sale. Should the milestones not be achieved during this period, the respective consideration will not be payable.

The net loss of LT and LS were A$1,560 and A$1,306, respectively, for the year ended 30 June 2021. As such, the net loss attributable to the Company (being 31.5% of LT and LS) was A$903 (£516). As of 31 December 2021, the total carrying values of LT and LS in the Company’s balance sheet was approximately £803,000. Therefore based on the current share price of Evergreen, the initial profits on the sale of our equity in LT &LS is £1.01 million, with the potential for this to increase to £2.99 million should the performance milestones be achieved.

In relation to the equity in Evergreen received for the consideration, the Company will be bound by an escrow agreement with the Buyer as per the regulatory authorities in Australia, which could be upto 2 years  . It will be in the form and substance consistent with the ASX Listing Rules. After the lapse of the escrow arrangement, Cadence will retain or dispose of these shares as per our investment strategy, which is available here.

Amapa Project Update

Operations at the Amapa Iron Project continue to focus on delivering the Pre Feasibility Study (“PFS”). Over the last month, all the significant contractors were at Amapa to review and analyse their respective engineering areas. Wardell Armstrong International were also on-site as part of their role in the publication of the PFS. We expect to publish a Maiden Ore Reserve on the Amapa Iron Ore mine followed by the PFS.

Elsewhere the Amapa Project has been focussing on the relevant environmental permitting, compliance with Brazilian legislation in relation to Tailing Storage Facilities and implementing the policies, structures and controls required for a developing company. All of these should stand us in good stead when we move past the PFS stage.

– Ends –

Cadence Minerals plc                                         +44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
Darshan Patel

 Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

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 Cadence Minerals Plc’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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.

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

Cadence Minerals #KDNC Agrees To Sell its Yangibana Joint Venture Interest to Hastings Technology Metals

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that it has entered into a binding agreement to sell its working interests in the Yangibana Rare Earths project (“Yangibana Project”) tenements to Hastings Technology Metals (ASX: HAS) (“Hastings”). Cadence’s 30% interest in tenements covers a small portion of Yangibana and potentially represents one year of the 16-year mine life.

Highlights: 

  • Cadence has agreed to sell its 30% working interest in the Yangibana Project tenements to the operator and owner of the remainder of the Yangibana Project, Hastings, for A$9 million (£5.1 million)
  • The sale is to be satisfied by the issue of fully paid ordinary Hastings shares
  • This transaction provides Cadence with equity exposure to 100% of the Yangibana Project via its equity holding in Hastings.
  • The NPV of the Yangibana Project is currently AS$ 1 billion

Background

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

As a consequence of the acquisition, Cadence will become a shareholder of Hastings. Hastings is developing the Yangibana Project. The Yangibana Project is a significant Australian Rare Earths Project, containing substantial Neodymium and Praseodymium resources.

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

Hastings has commence site construction and is planning to commence commissioning of the beneficiation plant in late 2023, with the delivery of maiden production to key customers in 2024.

In February of this year, Hastings published a revised NPV calculation, which increased the NPV by 84% to AS$ 1 billion. Hasting’s current market capitalisation is circa A$ 415 million. Also, in February, the Australian Government’s Northern Australia Infrastructure Facility (NAIF) approved a $140 million loan facility to Hastings and Yangibana, making it the first Australian rare earth project to receive NAIF funding. The Financial Times also commented on the story. The link can be found here: https://www.ft.com/content/552274c4-221a-49ac-91dd-562c51655e76

Cadence CEO Kiran Morzaria commented: “The sale of our 30% interest in a part of the Yangibana Rare Earths Project provides Cadence with an excellent return on its initial investment and equity exposure to the entire project. Yangibana’s importance as a key REE resource today cannot be overstated.”

We look forward to reporting on Hastings development and progress towards production as construction on the mine commences.”

Commercial Terms

The following represent the key binding commercial terms for Hastings to acquire the 30% working interest in certain tenements and general-purpose licences held by Cadence Minerals Plc through its subsidiary Mojito Resources Limited:

  • Consideration – A$9 million to be settled by the issue of fully paid ordinary shares in Hastings Technology Metals Ltd (herein referred to as “Consideration Shares”).
  • Issue price – equal to the volume-weighted average price (VWAP) of the Hastings shares in the 30 trading days before settlement.
  • Escrow – the Consideration Shares will be subject to a voluntary escrow for up to 12 months from issue
  • Conditions precedent limited to execution of documents to give effect to the binding term sheet, Hastings having issued and applied to the ASX for the quotation of the Considerations Shares and any necessary approvals being received.
  • Settlement to occur five days after conditions precedent have been met.
  • Conditions precedent to be completed within 180 days; otherwise, either party may terminate the binding term sheet.
  • General representations, warranties and indemnities for an agreement of this nature.

The net loss attributable to our 30% holdings in the tenements for 31 December 2021 is nil. As such, the net loss attributable to the Company is also nil. As of 31 December 2021, the total carrying values of the tenements in the Company’s balance sheet was approximately £905,000. Based on the transaction announced, the initial profits on the sale of our interest is approximately £4.2 million.

As outlined above, the Consideration Shares will be subject to a voluntary escrow of up to 12 months from issue. During that time, the price of Hastings public equity may vary and result in either higher or lower profitability. After the lapse of the escrow arrangement, Cadence will retain or dispose of these shares as per our investment strategy, which is available here.

Q&A with Vox Markets

CEO Kiran Morzaria will be recording an investor presentation and Q&A with Vox Markets, which will be released on Friday, 1 July 2022.

Shareholders and investors are invited to submit their questions to Katrina Perez at Vox Markets via her email at kperez@voxmarkets.co.uk.  The questions should arrive no later than 6 pm on  Wednesday, 29 June 2022. Any that arrive after the deadline will not be included in the Q&A.

– Ends –

For further information:

Cadence Minerals plc                                                       +44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
Darshan Patel

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

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

Cadence Minerals #KDNC – Annual Results for the year ended 31 December 2021

Cadence Minerals (AIM/NEX: KDNC) is pleased to announce its final results for the year ended 31 December 2021. The full Annual Report and Audited Financial Statements will be made available on the Company’s website at https://www.cadenceminerals.com/  and will be posted to shareholders on the 30 June 2022

CHAIRMAN’S STATEMENT

I am pleased to present the Company’s Annual Results for the year ended 31 December 2021.

Maintaining a balanced perspective on the macro picture has become increasingly difficult, with unexpected factors such as Russia’s invasion of Ukraine creating a supply and price squeeze for many commodities. As I review the year and reflect on global events, and again on events more specific to our company outlook, it is remarkable how the macro backdrop has changed in totally unexpected ways. Previously unprecedented levels of economic stimulus have now been overtaken by inflation and interest rate hikes, while the shift towards globalisation has slowed down with the prospect of a localised war in Ukraine becoming more entrenched and widespread.

On behalf of the Board of Directors (Board) and management, I would like to thank all of our advisors, consultants and service providers and especially our shareholders for their support throughout the year. The Board and company have resumed pre pandemic work schedules and trips to visit site and project operational hubs, along with viewing potential investment opportunities and attending industry conferences. The opportunity to travel freely, to reconnect with people in person and to see projects in transition has truly been a highlight. 

Our portfolio companies have continued to progress and have in many cases delivered landmark achievements. In no order of priority, the Board congratulates Macarthur Minerals on completing the Bankable Feasibility Study and moving significantly closer to operational success. European Metal Holdings has painstakingly continued to complete reviews and studies that highlight its low carbon footprint while it evolves into the largest hard rock lithium producer in Europe. As I have already stated, we continue to look for opportunities to unlock and discover value across our whole portfolio. Given the increased underlying prices of Lithium and Rare Earths we expect to be able to take advantage of these opportunities in the coming year. Recent announcements from the current Mexican Government over potentially controlling the nation’s domestic Lithium supply have in no way put paid to our hopes that Bacanora’s JV with Gangfeng will prove to be a success. 

Of course, the highlight of the year was the formalising and successful settlement of the ‘pending’ investment into the Company’s flagship Iron Ore Project at Amapa, Brazil. This process triggered the release of escrow funds to realise our investment, which then became a physical manifestation of the same when Iron Ore shipments commenced from the Stockpile at the Port of Santana. I write this after returning from a truly inspirational visit to see the project operations, and after viewing the port, railway and mine assets in Macapa (the Amapa system). Our investment there has also precipitated a transformation in the area’s infrastructure, which will in time make a difference to the standard of living for the local people. Although this process has only just begun, early findings from our commissioned studies and reports are increasingly positive, giving the Board every confidence that our investment there will be a great and lasting success.

On a practical level, challenges still persist today, with global disruption to shipping and freight rates, along with increased costs associated with the capital and equipment required to bring projects into production. While Cadence is not alone in facing these challenges, your Board firmly believes we remain well positioned in the underlying commodity markets that reflect the Cadence portfolio. China continues to be the dominant focus of so much global supply and demand analysis, and with the prolonged lockdowns many commentators have expressed concern about economic expansion in the region. Initial analysis still suggests that economic stimulus and infrastructure spending will continue, and this, together with the Biden $1 trillion infrastructure bill passed in November, will help sustain steel demand and therefore continue to support the demand for Iron ore, a key focus for Cadence. 

As the impact of the pandemic begins to recede, we face new challenges of higher interest rates and inflation. For Cadence, sustained higher commodity prices especially those of Lithium and Iron Ore has remained one of the great positives across our portfolio, and together with the successful settlement and initial investment into the Amapa project, your Board believes we continue to be well placed to meet these challenges, both present and future. 

In closing, I would like to personally thank my fellow Board members, staff and partners in the wider Cadence Community and of course all Shareholders for their continued encouragement and confidence in the Company.

Andrew Suckling

Non-Executive Chairman

CHIEF EXECUTIVE OFFICER’S COMMENTARY

I am pleased to present Annual Results for the year ended 31 December 2021, a full review of business activities during the year is provided within the Strategic Report.

The results presented for the period ended 31 December 2021 reflect a historical position in terms of the Company’s progress and financial position, therefore we have included additional information on key post-year-end events in the Strategic Report.

Cadence has continued to pursue its strategic objectives despite the continued volatility in 2021 because we think that assets that are undervalued, de-risked, or have strategic advantages will outperform their peers in the long run. This plan yielded fruit in 2021, with the Company continuing to report profitable returns on its public investments and significant operation progress being made across its core investments.

The relaxation of Covid-19 restrictions, combined with the implementation of mass vaccination programmes and significant levels of monetary and fiscal stimulus by many governments around the world, resulted in a rapid resurgence of global economic activity in 2021: the IMF estimates 5.9 percent global growth for the year. The magnitude of this economic recovery was most pronounced in Europe and the United States, where, after contractions of 6.3 percent and 3.4 percent in 2020, annual growth rates of 5 percent and 6 percent, respectively, returned in 2021. Such rapid economic expansion was also observed in major emerging markets, with China growing by 8 percent and India growing by 9.5 percent.

However, the pace of recovery slowed in the second half of the year. Higher inflation emerged as part of the recovery, exacerbated by persistent pandemic-induced bottlenecks in global supply chains. Domestic inflationary pressures, currency movements, and the prospect of further US monetary tightening have necessitated more significant monetary policy responses in some emerging markets, including Brazil, where interest rates have been raised by 500 basis points since August in an effort to stem the tide of capital outflows, which has pushed the economy into recession

The impact of the various global fiscal stimuli has meant that the mining industry is facing the consequences of global commodity cost inflation, which is causing supply chain disruptions, consumer inflation, and large variations in energy costs and capital costs.

Overall, a progressive recovery from Covid-19 has resulted in positive demand growth, with supply gradually adjusting to match this increasing demand. This has proven beneficial in practically all of the exploration and development assets Cadence has invested in, in particular lithium and iron ore. Which by the end of the year hadincreased by 485% and 47% respectively in price.

Iron Ore tracked economic progress and were affected by geopolitical shifts throughout the year. Global crude steel production is expected to have climbed by 4.3 percent in 2021, setting a new high. Europe and the Americas experienced the most rapid increase. In China, the world’s largest steel producer, output reached a new high in May before declining economic mood and a faltering real estate sector weighed on output. Iron ore prices reached a new high in May, fuelled by China’s robust growth earlier in the year, to which supply struggled to respond. Prices averaged $160/tonne for the entire year, the highest level since 2011.

The buoyancy of the lithium price has been driven by the market tightening as the electric vehicle revolution accelerates. Demand has eroded the oversupply seen in 2019 and 2020. This market tightness is projected to persist, with Credit Suisse predicting that lithium demand might triple by 2025 from current levels, and that supply would be stretched to meet that demand, with higher prices required to incentivise the necessary supply response 

As a result of this substantial shift in consumer behaviour, demand for lithium is expected to climb by 30 percent to 675,000 tonnes LCE in 2023, up from 2021 levels. Global battery consumption is predicted to climb 14-fold by 2030, with Statista projecting 1.8 million tonnes of lithium demand by 2030.

Despite the strong market fundamentals, lithium production is expected to be 441,000 tonnes LCE in 2021, down from 464,000 tonnes in 2020. However, lithium output is predicted to increase at a 13.4 percent CAGR to 679,000 tonnes in 2023. According to Macquarie, the deficit this year will be 2,900 tonnes of LCE, rising to 20,200 tonnes in 2022 and 61,000 tonnes in 2023.

Our portfolio has been focused on two main investments, and the first is the private Amapa Iron Ore Project. The key outstanding item for Cadence to complete its initial US$2.5 million (20%) investment in the Amapa Project was the execution of a settlement agreement with the secured bank creditors. This was achieved at the end of the year, with Cadence vesting its 20% in February 2022 and subsequently increasing its stake to 27% in March 2022.

DEV Mineração S.A’s (“DEV”) the owner of the Amapa Project also began shipping of its 58% iron ore stockpiles during the years it shipped some 143,000 wet tonnes. The majority net proceeds of these sales is being paid to the secured bank creditors as part of the settlement agreement. 

Operationally DEV progress has been solid, with DEV continuing to invest in the project with the priorities on the completion of a Pre-feasibility Study (‘PFS’) and the rehabilitation of the tailings dams at the Amapa Iron Ore Mine.

As we have mentioned on numerous occasions, the opportunity to invest in such a project is rare within our industry, and we believe this project provides us with a potentially transformative asset for our Company. The Amapa Project gives Cadence the potential for an exceptional return on investment in the run-up to full production and an opportunity to become a significant shareholder in a mid-tier iron ore producer. 

The second of our key investments is European Metals Holdings (“EMH”), whose strategy is to become a Czech based lithium and tin producer. During the year, EMH’s Cinovec Project has been significantly de-risked and is moving rapidly towards a final investment decision.

The progress and performance of our investment portfolio was well reflected in our share price performance during the year, which increased from around 15 pence to 28 pence. This was clearly driven by the agreement reached with the Amapa Iron Project’s secured bank creditors at the end of 2021.

During the year, we saw prices of up to 31 pence, which was driven by an increase in iron ore prices that reached US$220 per tonne in August, but prices then fell to US$90 by November 2021, which was reflected in our share price, which reached 17 pence in October 2022. Cadence’s share price has increased by more than 314 percent over the last two years, representing significant growth.

However, 2022 has been a very different story, with inflationary pressures affecting the entire equity market (the SP 500 is down some 20 percent this year). Cadence’s share price performance in 2022 reflects the performance of our equity investments, such as European Metals Holdings and other higher risk assets. This is despite our portfolio continuing to make solid operational progress and being fundamentally the same investments that drove our share price increases in 2020 and 2021.

During 2022, our priorities on the Amapa Iron Ore Project will be the publication of a maiden Ore Reserve Estimate, followed by the release of a PFS on the project. We will also plan to increase our stake in the asset. In addition, we anticipate that our investment in Lithium Technologies and Lithium Supplies will have listed during 2022, and we are hoping to crystallise some additional value from our other privately held investments. 

I would like to express my gratitude to the Cadence team and our investee companies, who have all worked tirelessly to bring the Company and its investment to their current position. We believe that concentrating risk across a few important investments and commodities will pay off. 

Kiran Morzaria

Chief Executive Officer

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 equity model and in public equity. In both investment classes, we take either an active or passive role. We have reported in these segments below.

PRIVATE INVESTMENTS, ACTIVE

The Amapa Iron Ore Project, Brazil
Interest – 20 % at 31/12/2022 increased to 27% by 31/05/2022
 

The Amapa Project is a large-scale iron open pit ore mine with associated rail, port and beneficiation facilities that commenced operations in December 2007. Production increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012, respectively. Before its sale in 2012, Anglo American valued its 70% stake in the Amapa Project at US$462m (100% US $660m).

In 2019 Cadence entered into a binding investment agreement to invest in and acquire up to 27% in the Amapa iron ore mine, beneficiation plant, railway and private port owned by DEV (“The Agreement”). The Agreement also gave Cadence a first right of refusal to increase its stake to 49%.

To acquire its 27% interest, Cadence will invest US$6 million over two stages in a joint venture company. The first stage is for 20% of the JV, the consideration for which is US$2.5 million. The second stage of investment is for a further 7% of JV for a consideration of US$3.5 million.

Vesting of Equity Interest in the Amapa Project

During the year, the key target for Cadence was to vest its first 20% in the Amapa Project. This required DEV and the investors (Cadence and Indo Sino via our joint venture company) to reach a settlement agreement (“Settlement Agreement”) with the secured bank creditors.

This was achieved on the 29 December 2021, when all the parties entered into a binding Settlement Agreement. The original credit facility provided to DEV by the secured creditors had a principle amount outstanding amount of US$135 million. The Settlement Agreement settles all of the principal amount plus all interest, default interest, outstanding costs and fees (“Settlement Amount”).

As a result of the Settlement Agreement and the Judicial Restructuring Plan approved in August 2019, the total principal amounts owed to the secured and unsecured creditors in classes I to IV of DEV have been reduced from approximately US$231 million to approximately US$103 million or approximately 45% of the original value.

The Settlement Amount will be paid over two years from the effective date of the Settlement Agreement, and it is to be satisfied by the net profits from the sale of DEV’s iron ore stockpiles. The unsecured creditors will be paid from DEV’s free cash flow over a period of nine years. Under the Settlement Agreement, DEV remains the obligor with the Secured Creditors having no recourse of repayment of the Settlement Amount to either Cadence or Indo Sino. The Settlement Agreement will remain secured over all of DEV’s equity and assets. 

Although the Settlement Agreement was executed within the year, the required contractual and regulatory documentation was completed post year end and Cadence vested its 20% interest in February 2022 and its 27% in March 2022. 

Iron Ore Shipments

During the year the Commercial Court of São Paulo (“the Court”) ruled that DEV could commence the shipment of the iron ore stockpiles situated at DEV’s wholly-owned port in Santana, Amapa, Brazil. DEV was initially to export sufficient iron ore to realise a US$10 million of iron ore (after the deductions of all logistical, regulatory, shipping and sale costs) from the Amapa stockpiles at the port. 

By the end of May 2021 DEV had shipped three cargoes totalling approximately 143,500 wet tonnes of 58% sinter feed iron ore. After all costs these sales netted DEV circa US$8 million. In July 2022, the Court permitted the export a further US$10 million of iron ore (after the deductions of all logistical, regulatory, shipping and sale costs). However, with the 58% iron ore pricing decreasing some 40% from May to August 2021 and shipping pricing remaining strong during the period DEV determined that there was a substantial risk to profitably by continuing to ship while shipping prices remained at high levels (US$ 80 – US$90 per wet tonne)

Once the Settlement Agreement had been completed in February 2022, DEV has been free to ship from its stockpiles and is not restricted by the Court permissions outlined above. Subsequent to the year end DEV shipped a further 48,492 wet tonnes of 58% iron ore sinter fines, DEV expect to receive circa US$ 900k for this shipment.  Shipping prices have continued to increase during 2022, driven by higher diesel prices and limited availability of vessels. This combined with iron price volatility has meant that DEV is currently not shipping form its stockpiles.

The vast majority of the net proceeds from the sales of the Iron Ore has been paid to the secured bank creditors as part of the Settlement Agreement. The remainder of the funds have been applied to DEV operations.

Operations Review

The operational focus for the year at the Amapa Project has  been the start the rehabilitation process of the project. This has primarily focused on tailing dam maintenance. DEV has employed a civil engineer and two geotechnical consulting firms to advance the work programme, including monitoring, geotechnical stability testing and statutory reporting. The end goal is to ensure that the current dams will be suitable for future operations amid Brazil’s more stringent regulatory environment.

In addition, DEV also began early rehabilitation of light infrastructure, the regularising the statutory reporting with the federal mining authority and state environmental authorities.

The other important focus for DEV and Cadence was to start the PFS. This began in 2021 with DEV appointing several internationally accredited engineering and consulting firms to carry out  the PFS. At the time of writing The PFS is progressing as expected, with the consulting engineers for the mine operations, ore reserve estimation, metallurgy, processing, infrastructure and shipping having submitted their draft reports. 

The PFS contemplates refurbishing and rehabilitating the existing port, rail and plant with modifications being made to the beneficiation plant to achieve a larger portion of 65% iron concentrate (4.9 Mt). The PFS is based on producing 5.3 Mt of iron ore concentrate per annum.

The Amapa Project’s Current Development Plan

The PFS, once complete will outline more fully the development timelines, capital required to achieve the stated project aims. Subsequent to the publication of an economic PFS we expect the DEV will seek to commission a Definitive Study (“DFS”). The DFS is required to seek project debt and equity finance which will be sought once the DFS is complete.

Cadence and its joint venture partners are having early discussions with potential debt providers and corporate financiers, which we will advance once the PFS is complete. On completion of the DFS and securing debt and equity financing project construction will commence.

Lithium Technologies Pty Ltd & Lithium Suppliers Pty Ltd (“LT” & “LS”)
Interest – 31.5% at 31/12/2022 and 31/05/2022
 

In December 2017, Cadence Minerals announced that it had executed binding investment agreements to acquire up to 100% LT & LS, which was subsequently varied to acquire three prospective assets in Australia that are in regions with proven high-grade lithium mineralisation.

LT and LS, through their subsidiaries, are the holders of two prospective exploration licenses and one exploration application in Australia and a further seven exploration license applications in Argentina.

All of the licenses and applications target prospective hard rock lithium deposits. The most significant of these is the Litchfield lithium prospect, which is contiguous to Core Lithium’s (ASX: CXO) strategic Finniss Lithium Project (JORC compliant ore reserves: 7.4Mt @ 1.3% Li2O)2.

During the year we saw a renewed interest in hard rock lithium projects in Australia. As such we increased our investment to 31.5% into LT & LS which funded operations on the Litchfield exploration license.

Satellite imagery verified the geology along the Litchfield exploration license north-west boundary is comparable to Core Lithium Ground. LT & LS’s geological consultant conducted intensive surface sampling across four target areas within the NW quadrant, taking 657 samples to determine the potential for contiguous mineralisation. The sampled areas mostly comprised metamorphic rocks linked to the Burrell Creek formation – a host rock for the regional occurrences of pegmatites. The samples results were returned in 2022, these results confirmed LT & LS’s view that the areas adjacent to Core Lithium boundary are prospective for lithium pegmatites.

Subsequent to the year end Cadence and the remaining shareholders entered into a conditional sale of 100% of LT and LS.  The consideration for LT and LS is up to A$ 21.05 million (£11.82 million). Cadence has 31.5% of LT and LS and would receive up to A$ 6.63 (£3.72 million). The Buyer is a public, unlisted company in Australia (“Buyer”). 

The acquisition of LT and LS has several conditions precedent, including the completion of due diligence and the relevant regulatory approval. Assuming this is successful, the Buyer will acquire 100% of LT and LS  through a mixture of cash and shares partially paid on completion of the sale of LT and LS and the remainder paid on the achievement of key performance milestones. 

The Buyer has committed to spending at least A$4 million on the exploration of Litchfield during the three years post the completion of the sale. Should the milestones not be achieved during this period, the respective consideration will not be payable.

The proceeds received by the Company will be used for reinvestment as per our investment strategy. In relation to the shares received as part of the consideration, the Company will be bound by an escrow agreement with the Buyer as per the regulatory authorities in Australia and will be in the form and substance consistent with the ASX Listing Rules. After the lapse of the escrow arrangement, Cadence will retain or dispose of these shares as per our investment strategy. 

PRIVATE INVESTMENTS, PASSIVE

Sonora Lithium Project, Mexico
Interest – 30% at 31/12/2021 and 31/05/2022

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

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

The Sonora Project holds one of the world’s larger lithium resources and benefits from being both high grade and scalable. The polylithionite mineralisation is hosted within shallow dipping sequences, outcropping on the surface.  A Mineral Resource estimate was prepared by SRK Consulting (UK) Limited (‘SRK’) in accordance with NI 43-101. The current lithium resources and reserves for the Sonora Lithium Project and the attributable amounts to Cadence are available on our website here: https://www.cadenceminerals.com/projects/sonora-lithium-project/.

A feasibility study report was published in January 2018, which confirmed the positive economics and favourable operating costs of a 35,000 tonnes per annum battery-grade lithium carbonate operation. Thefeasibility study report estimates a pre-tax project net present value of US$1.253 billion at an 8% discount rate and an Internal Rate of Return of 26.1%, and Life of Mine operating costs of US$3,910/t of lithium carbonate.It should be noted that under the published feasibility study, the concession owned by Mexalit will be mined starting in year 9 of the mine plan cease at the end of the mine life in year 19, and as such, assuming Cadence retains its position, any net realisable economic benefit to Cadence would only accrue at this time.

The full report can be found here: https://www.bacanoralithium.com/pdfs/Bacanora-FS-Technical-Report-25-01-2018.pdf

Summary of Activities

The most significant development for the Sonora Lithium project both during 2021 and 2022, was that Ganfeng completed the acquisition of the Sonora Lithium Project.

Although this does not directly affect the terms of our Joint Venture, having Gangfeng as a partner in the development of this project is highly encouraging , given that Gangfeng’s involvement in the development of the project to date and their extensive experience in the lithium market holding company is the world’s third-largest and China’s largest lithium compounds producer and the world’s largest lithium metals producer in terms of production capacity.

Whilst COVID-19 has impacted the progress on the Sonora Lithium Project, work to complete the front-end engineering design (“FEED”) has continued throughout the period.  Ganfeng is currently appointing a Chinese Design Institute to complete the FEED with initial site layouts scheduled for Q2 2022. Ganfeng is continuing to work with its equipment suppliers and, along with the Company, is maintaining its previously advised project delivery schedule with first lithium production in H2 2024.

Rescue and removal of surface vegetation and topsoil in the area required for the construction of the lithium

processing plant have been completed. Plant site location survey, geotechnical, and hydrogeological works

have also been completed. Works to build the construction road and early work camp have commenced. Site works for bulk earthworks are expected to commence in late 2022.

On September 30, 2021, Mexican politicians from the MORENA party tabled a draught bill to reform Mexico’s energy sector, including statements that lithium would be included among the minerals considered strategic for the energy transition and that no new concessions for lithium exploitation by private companies could be granted. Subsequent to the year end the Mexican senate elevated lithium deposits to the category of “strategic minerals”, declaring the exploration, exploitation, and use of lithium to be the exclusive right of the state.

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

Yangibana Project, Australia
Interest – 30% at 31/12/2022 and 31/05/2022
 

The Yangibana Project is a significant Australian Rare Earths Project, containing substantial Neodymium and Praseodymium resources. The Project currently covers approximately 650 square kilometres. The Project is located in the Gascoyne region of Western Australia, some 250 kilometres northeast of Carnarvon. 

Cadence holds interests in tenements covering some of the prospective Gifford Creek Ferrocarbonatite Complex. Through wholly-owned subsidiaries, Cadence holds:

·      30% interest in 3 Mining Leases, 6 Exploration Licences, and 2 General Purpose Leases;

·      3 Mining Licenses Include:M09/159,M09/161,M09/163;

·      6 Exploration Licenses Included: E09/1043, E09/1049, E09/1703, E09/1704, E09/1705, E09/1706;

·      2 General Purpose Leases: G09/11, G09/13.

The tenements in which Cadence holds a 30% interest are in joint-venture with Australian listed Hastings Technology Metals (“Hastings”), and Hastings carries all costs up to the decision to commission a bankable feasibility study.

A definitive feasibility study published in 2017, modelled two production scenarios the second of which had included within it 808,000 tonnes of plant feed from one of our joint venture areas (Yangibana) in year 6. This production target and additional production target from the definitive feasibility study indicates that 11% of the plant feed will come from our joint venture area[*].

The economic model contemplated by Hastings assumes Cadence through its subsidiary will participate in the and mining of the deposits held 70% by Hastings and 30% by Cadence. Assuming there is a development of the mine by the joint venture a new Mining Joint Venture Agreement will need to be agreed and put in place to replace the existing joint venture documentation and regulate the arrangements between the participants for the mine development. No costs or revenue ascribed to 30% interest in the deposits held by Cadence were reported in the financial modelling published by Hastings.

Although Hastings Technology Minerals has progressed the development of the Yangibana Rare Earth project, most of this has been in relation to its wholly owned assets, with the only a change being reassessment of our joint venture mineral resources and reserves occurring in July 2021. There was no material difference in the recalculation of our portion of the resource and reserves; an updated summary can be found on our website here:https://www.cadenceminerals.com/projects/yangibana-rare-earth-project-2/. 

PUBLIC EQUITY

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

During the period, our public equity investments generated an unrealised profit of £0.57 million (2020:  £10.24 million) and a realised gain of £0.59 million (2020: £0.07 million). The majority of these profits were derived from the sale of European Metals Holdings shares. The total unrealised gains on our equity portfolio as at the end of 31 December 2021 was £9.27 million.

As of 31 December 2021, our public equity stakes consisted of the following

 

Company

Business Summary

Year ended 31 Dec 2021

£,000

Year ended 31 Dec 2020

£,000

Cumulative Total Return Since Inception

Active / Passive

European Metals Holding Limited

Lithium mine development

11,287

13,426

461%

Active

Charger Metals NL

 

Lithium exploration

342

22%

Passive

Macarthur Minerals Limited

Iron Ore mine development

181

329

118%

Passive

Eagle Mountain Mining Limited

Copper exploration

122

-42%

Passive

Mont Royal Resources Limited

Gold and Copper exploration

35

-6%

Passive

Miscellaneous

 

Various

7

6

-86%

Passive

Total

 

11,974

13,761

 

 

 

 

PUBLIC EQUITY (ACTIVE)

European Metals Holdings Limited (“European Metals”)
Interest – 8.1% at 31/12/2021 and 31/05/2022

Cadence has held an investment in European Metals since June 2015. As of year-end, Cadence held 8.1% in European Metals.

European Metals owns 49% of Geomet s.r.o. with 51% owned by CEZ. CEZ is a significant energy group listed on various European Exchanges. Geomet s.r.o. owns 100% of Cinovec which hosts a globally significant hard-rock lithium deposit with a total Indicated Mineral Resource of 372.4Mt at 0.45% Li2O and 0.04% Sn and an Inferred Mineral Resource of 323.5Mt at 0.39% Li2O and 0.04% Sn containing a combined 7.22 million tonnes Lithium Carbonate Equivalent and 263kt of tin, as reported to ASX on 28 November 2017 (Further Increase in Indicated Resource at Cinovec South).

An initial Probable Ore Reserve of 34.5Mt at 0.65% Li2O and 0.09% Sn reported on 4 July 2017 (Cinovec Maiden Ore Reserve) has been declared to cover the first 20 years’ mining at an output of 22,500tpa of battery-grade lithium carbonate reported on 11 July 2018 (Cinovec Production Modelled to Increase to 22,500tpa of Lithium Carbonate). 

This makes Cinovec the largest hard-rock lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally significant tin resource. In June 2019 EMH completed an updated Preliminary Feasibility Study, conducted by specialist independent consultants, which indicated a return post tax NPV of USD1.108B and a post-tax IRR of 28.8%. Subsequent to the year end, in January 2022 EMH updated the 2019 PFS, which indicated a post tax NPV of US$1.938Bn and a post-tax IRR of 36.3%.

The study confirmed that the Cinovec Project is a potential low operating cost producer of battery grade lithium hydroxide or battery grade lithium carbonate as markets demand. It confirmed the deposit is amenable to bulk underground mining. Metallurgical test-work has produced both battery grade lithium hydroxide and battery grade lithium carbonate in addition to high-grade tin concentrate.

The Definitive Feasibility Study continues, albeit with some minor delays related primarily to Covid-19 and the effect that has had on logistics globally. Whilst the project had no direct Covid-19 related issues at site, moving samples and our people has been problematic at times. We don’t anticipate any escalation in this.

Apart from these delays, we have made steady progress of the Cinovec Project with positive developments in the areas of our locked cycle testwork, permitting advancement and Measured Resource drilling programme. 

The Project has been significantly de-risked and at the time of this report is moving rapidly towards a final investment decision. 

The Project Company appointed SMS group, a German-based world-leading engineering firm, as the lead engineer for the minerals processing and lithium battery-grade chemicals production at Cinovec. This marks the beginning of the formal Front-End Engineering Design study as the major component of the ongoing Definitive Feasibility Study. This detailed engineering contract, along with advances in permitting and offtake discussions, moves us closer to the development of Europe’s largest hard rock lithium resource for the benefit of all stakeholders. 

FINANCIAL REVIEW

Total comprehensive income for the year attributable to equity holders was a loss of £0.14m (2020: profit of £7.82m). This decrease in profitability from the previous year of approximately £7.96m is mainly due to the reduced amount of realised and unrealised profits and losses for the year of approximately £1.2m (2020: £10.4m) relating to our share investment portfolio (listed financial investments) held during the period. Administrative expenses were up £0.36m from £1.44m to £1.80m, but foreign exchange gains were up £1.28m from a loss £0.82m to a gain of £0.46m.

Basic negative earnings per share was 0.102p (2020: positive earnings per share of 6.897p). 

The net assets of the Group at the end of the period were £22.15 million (2020: £22.09 million). This increase of approximately £0.06m reflects the losses and shares issued in the year.

Cadence Minerals #KDNC – Fourth Amapa Iron Ore Shipment Completed and En Route

Further to the announcement made on the 7 April 2022, Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that DEV Mineração S.A’s (“DEV”) has completed the sale and shipment of Iron Ore from the Amapa Iron Ore Project (“Amapa Project”).

Highlights:

  • DEV has shipped and sold the fourth batch of iron ore from the stockpiles.
  • The loading of the 48,492 wet tonnes of iron ore sinter fines (approx. 58% Fe) at Companhia Docas de Santana (“CDSA”) was completed on the 23 April
  • Iron Ore 62% Fe, CFR China at US$150 per tonne (22/04/2022)
  • Approximately 1.2 Mt of iron ore is currently stockpiled in DEV’s wholly-owned port

DEV has shipped and sold the fourth batch of the iron ore from the stockpiles at Santana, Amapa, Brazil. The loading of the 48,492 iron ore sinter fines (approx. 58% Fe) at CDSA was completed on 23 April, and the ship departed yesterday, 24 April. This shipment represents the first iron ore export since Cadence vested its equity interest (27%) in the Amapa Project earlier this year.

The first three shipments occurred in the first half of last year and were approved via a court petition (“Approved Court Petition”). Details of the Approved Court Petition can be found here. The Approved Court Petition limited the sales of the iron ore stockpiles to US$10 million of net profits (“Approved Court Disposal Funds”).

The Approved Court Disposal Funds were applied per the Approved Court Petition, with DEV retaining a portion of the net profits. These net profits and the earnings from the current shipment will be paid to the Secured Banks Creditors as per the settlement agreement announced on 29/12/2021.

Details of Ownership and Joint Venture Agreement

Cadence owns 27% of the Amapa Project, with our joint venture partner, Indo Sino Pty Ltd (“Indo Sino”), owning the remaining 73%. The ownership of Amapa is via a joint venture company, Pedra Branca Alliance Pte. Ltd. (“JV Co”), which owns 100% of the equity of DEV Mineração S.A. (“DEV”). Should Indo Sino seek further investors or an investment in the JV Co, Cadence has a first right of refusal to increase its stake to 49%.

– Ends –

For further information:

Cadence Minerals plc                                                       +44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
Darshan Patel
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014

Cadence Minerals #KDNC enters into a Conditional Sale Agreement of its 31.5% Equity Stake in Lithium Technologies and Lithium Supplies

Cadence is pleased to announce that along with all the Lithium Technologies and Lithium Supplies (“LT and LS”) shareholders; we have reached an agreement to sell 100% of the equity of LT and LS.

Highlights:

  • Cadence and all LT and LS shareholders have entered into a conditional agreement to sell 100% of LT and LS for up to A$21.05 million (£11.82 million)
  • Cadence owns 31.5% of LT and LS and would receive up to A$6.63 million (£3.72 million)
  • The consideration payable to LT and LS shareholders will be via a mixture of cash and shares
  • The Buyer will spend a minimum of A$4 million over three years from the completion of the sale on the exploration of the Litchfield lithium prospect (“Litchfield”) in Northern Australia.

Cadence CEO Kiran Morzaria commented: “On behalf of the Cadence board and the other LT and LS shareholders, we are pleased to report that we have reached a conditional agreement with a public, unlisted Australian company to sell LT and LS.” 

“Recent exploration and sampling work at the Litchfield project and the project’s proximity to Core Lithium’s assets have led us to believe that Litchfield has considerable potential to host lithium mineralisation. In addtion to this the other lithium assets held by LT and LS provides the Buyer with several attractive targets to explore and develop.”

“For Cadence, this transaction is, we believe, an excellent balance of risk and reward. Firstly it provides an initial consideration that more than covers our book investment. Secondly, by partly paying the consideration in shares in the buyer and cash payment on milestones we are exposed the the exploration upside. Lastly, given the commitment of at least A$ 4 million to explore the primary assets, this mitigates dilution to Cadence shareholders.”

“Moreover, this transaction will also allow our management team to focus on delivering additional value through our ongoing involvement in developing our flagship Amapa Iron Ore project.

The consideration for LT and LS is up to A$ 21.05 million (£11.82 million). Cadence has 31.5% of LT and LS and would receive up to A$ 6.63 (£3.72 million). The Buyer is a public, unlisted company in Australia (“Buyer”).

LT and LS, through their subsidiaries, are the holders of two prospective exploration licenses and one exploration application in Australia and a further seven exploration license applications in Argentina.

All of the licenses and applications target prospective hard rock lithium deposits. The most significant of these is the Litchfield lithium prospect, which is contiguous to Core Lithium’s (ASX: CXO) strategic Finniss Lithium Project (JORC compliant ore reserves: 7.4Mt @ 1.3% Li2O)2.

The acquisition of LT and LS has several conditions precedent, including the completion of due diligence and the relevant regulatory approval. Assuming this is successful, the Buyer will acquire 100% of LT and LS through a mixture of cash and shares partially paid on completion of the sale of LT and LS and the remainder paid on the achievement of key performance milestones.

The net loss of LT and LS were A$1,560 and A$1,306, respectively, for the year ended 30 June 2021. As such, the net loss attributable to the Company (being 31.5% of LT and LS) was A$903 (£516). As of 31 December 2020, the carrying values of LT and LS in the Company’s balance sheet was approximately £337,000 and £237,000, respectively.

Timing Cash / Shares Shares Share Price (A$) Value (A$) Approximate value to KDNC (A$)
Completion of Sale Cash N/A N/A 1,050,000 330,750
Completion of Sale Shares 45,000,000 0.20 9,000,000 2,835,000
Milestone One Payment Cash N/A N/A 2,500,000 787,500
Milestone Two Payment Cash N/A N/A 2,500,000 787,500
Milestone Three Payment Cash N/A N/A 3,000,000 945,000
Milestone Four Payment Cash N/A N/A 3,000,000 945,000
Total       21,050,000 6,630,750

 

The first three milestone payments are payable once a JORC resource is of not less than 12 million tonnes of lithium oxide is proved at Litchfield. The fourth milestone payment is payable on completing a definitive feasibility study on Litchfield. The Buyer can also pay the milestones payments in equity, using a defined pricing mechanism.

The Buyer has committed to spending at least A$4 million on the exploration of Litchfield during the three years post the completion of the sale. Should the milestones not be achieved during this period, the respective consideration will not be payable.

The proceeds received by the Company will be used for reinvestment as per our investment strategy, which is available here. In relation to the shares received as part of the consideration, the Company will be bound by an escrow agreement with the Buyer as per the regulatory authorities in Australia and will be in the form and substance consistent with the ASX Listing Rules. After the lapse of the escrow arrangement, Cadence will retain or dispose of these shares as per our investment strategy, which is available here.

– Ends –

 

For further information:

Cadence Minerals plc                                        +44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)   +44 (0) 207 220 1666
James Joyce
Darshan Patel
Novum Securities Limited (Joint Broker)   +44 (0) 207 399 9400
Jon Belliss

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding Cadence Minerals Plc’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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.

Cadence Minerals #KDNC Provides PFS Update for the Amapa Iron Ore Project & Appoints Wardell Armstrong as PFS Manager

Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to provide an update on the ongoing Pre-Feasibility Study (“PFS”) at its flagship Amapa Iron Ore Project (“Amapa” or “Amapa Project”).

Amapa is a substantial integrated mine, beneficiation plant, railway and port in the northeast of Brazil. It was previously owned by Anglo American (70%) and Cliffs (30%) and  at its peak produced up to 6.1 million tonnes (“Mt”) of iron ore concentrate per year.

Highlights

  • Cadence have now acquired 27% of the Amapa Project, which is being fast-tracked through development and eventually to production.
  • PFS commissioning based on producing 5.3 Mt per annum, 4.9Mt is anticipated to be a 65% iron ore concentrate.
  • Wardell Armstrong International Ltd, a leading, globally recognised mining consultancy, has been appointed the PFS Manager of the Amapa Project.
  • Work is on track to deliver a high-quality PFS for the Amapa Project

Cadence CEO, Kiran Morzaria, commented: “The Amapa Mine has all the attributes of a significant iron ore deposit, and the recently upgraded Mineral Resource Estimate of 176.7m tonnes grading 39.7% Fe at the Inferred category provides the Cadence board with great confidence in our investment decision.”  

“As we see the world move towards decarbonisation and as manufacturers seek to minimise their carbon footprint, the planned production of a >65% Fe concentrate utlising predominantly renewable energy really does highlight the potential for the Amapa mine, rail and port infrastructure to deliver a lower emission iron ore product to our customers.” 

“Completion of the PFS will be an important step towards unlocking the value of this deposit and I look forward to providing progress updates in the coming weeks.”

Amapa Pre Feasibility Study and Wardell Armstrong Appointment

The Pre Feasibility Study (“PFS”) began on the Amapa Project late last year and is based on producing 5.3 Mt of iron ore concentrate per annum. We expect to produce 4.9Mt of the higher quality, lower carbon footprint 65% iron ore concentrate which, as of the date of this announcement, trades at approximately US$170 per dry tonne.

The PFS contemplates refurbishing and rehabilitating the existing port, rail and plant with modifications being made to the beneficiation plant to achieve a larger portion of 65% iron concentrate (4.9 Mt). In addition, an investigation is underway into optimisation opportunities and potential cost savings in the transportation of the iron ore concentrate, particularly in the areas of transhipment and movement of ore from the mine to the rail loadout.

Previous studies carried out by SRK consulting based on 2015 site visits and updated in 2019 to reflect changes in inflation and foreign exchange rates estimated the total level of capital expenditure for the project of approximately US$168.8 million (scoping study level accuracy). The same study estimated operating expenditure of about US$ 24 per dry tonne delivered free onboard from Amapa’s port in Santana, Brazil.

All the other areas within the PFS are progressing as expected, with work underway on all critical areas, including mining, beneficiation, infrastructure, energy, tailings storage facilities, logistics and sales and marketing.

Cadence is also pleased to announce that it has appointed Wardell Armstrong International Ltd (“WAI”) as PFS manager for the Amapa Project. WAI is a leading, globally recognised mining consultancy with a track record of conducting all levels of technical study required on projects that have successfully been financed and developed into full mining operations.

WAI are working closely with all our consultants to deliver the lowest cost and capital expenditure possible, which represent huge advantages for any mining operation, particularly for construction and project financing.

About the Amapa Project

Amapa commenced operations in December 2007 with the first production of iron ore concentrate product of 712 kt in 2008. In 2008 Anglo American (70%) and Cliffs (30%) acquired the Amapa Project in 2008 as part of a larger package of mining assets in Brazil.

Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012. During this period, Anglo American reported operating profits from its 70% ownership in the Amapa Project of US$ 120 million (100% US$ 171 million) and US$ 54 million (100% US$ 77 million). Before its sale in 2012, Anglo American valued its 70% stake in the Amapa Project at US$ 866 million (100% US$ 1.2 billion). It impaired the asset in its 2012 Annual Accounts to US$ 462 million (100% US$ 660 million).

Cadence updated the Mineral Resource Estimate on November 2nd 2020, increasing the MRE by 21%. The current MRE contains a Mineral Resource of 176.7 million tonnes grading 39.7% Fe in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.

Details of Ownership and Joint Venture Agreement

Cadence owns 27% of the Amapa Project, with our joint venture partner, Indo Sino Pty Ltd (“Indo Sino”), owning the remaining 73%. The ownership of Amapa is via a joint venture company, Pedra Branca Alliance Pte. Ltd. (“JV Co”), which owns 100% of the equity of DEV Mineração S.A. (“DEV”). Should Indo Sino seek further investors or an investment in the JV Co, Cadence has a first right of refusal to increase its stake to 49%. If Cadence does not exercise its right of first refusal under the terms, Indo Sino will have a twelve-month option to buy the shares in JV Co held by Cadence for 1.5 times the price paid by Cadence for such shares.

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
Darshan Patel
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

 

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding Cadence Minerals Plc’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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.

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