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Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to provide a progress update for its flagship Amapá Iron Ore Project (“Amapá Project”), including an expedited operational licensing and re-rating of our tailings storage facility. 

Highlights:

·     The expected licensing timeline for the mine, railway and port at the Amapá Project team has been shortened to12 to 16 months compared to a typical timeline of up to 36 months.

·     The revised timeline is expected to result in the grant of mine Installation Licenses (“LI”) over the wholly owned port, railway, beneficiation plant and mine  during the course of 2024, followed by an operational license (“LO”) after construction is completed.

·     The Amapá Tailing Project (“TSF”) is approaching the lowest operational risk rating to date as a result of maintenance, reporting, drilling, and compliance work carried out since 2019

·     Following the management team’s recent visit to Amapá, CEO Kiran Morzaria will present the most recent developments at a Shares Magazine investor evening on Wednesday, 13 September.

·     Executive Summary of Pre-Feasibility Study Released and available here 

CEO Kiran Morzaria commented: “We are delighted with the progress we saw first-hand in our recent visit to Amapá. Agreeing a shortened route to the operational licence is key to getting the Amapá Project back into production in the shortest time possible.”

“I look forward to presenting the latest developments at the upcoming Shares Magazine investor evening and reporting to the markets with further progress after that.” 

Licensing Update

While the Amapá Project was operating, it held all the necessary permissions to mine, process, transport and ship some six million tonnes of iron ore annually. However, many of these licenses lapsed after it ceased operations in 2014. Cadence has been working alongside the team at the Amapá Project to obtain these licenses and permissions. To date, we have reinstated and extended the railway concession to 2046 (completed in December 2019) and been granted a change of control over the wholly owned port in November 2021, which ensured the federal licenses could be maintained. 

The Amapá Project owns the required Mining Concessions; however, it must obtain a Mine Extraction and Processing Permit (“Mining Permit”) to begin operation. To obtain this permit, the Amapá Project must obtain an LI and, when constructed, an Operational License LO from the Amapá State Environmental Agency. 

Before the suspension of mining, the Project had numerous LOs across the mining, rail, and port operations. These LOs expired between 2013 and 2018. In 2022, the Amapá Project began regularising the expired environmental permits and started consultation with the Amapá State Environmental Agency and the relevant state authorities. The Amapá Projectrequested that the requirement for a full environmental impact study be waived. This request for a waiver was on the basis that the previous LOs were granted on an operation that is substantially the same as is currently planned and remains applicable to future operations.

As a result of the discussions between the various state authorities and the Amapá Project, we are pleased to announce that Amapá Project will be able to shorten the licensing timeline substantially. We have agreed with Amapá State Environmental Agency that on the mine and railway, we will be able to submit an Environmental Control Plan – “PCA” (Plano de Controle Ambiental) and an Environmental Control Report – “RCA” (Relatório de Controle Ambiental). However, on the port, we will need to complete a full environmental assessment, but given that the Amapá Project has already begun some of the background studies, we also anticipate that the timeline for the grant of the port LI will be shortened.

The fieldwork for the LI’s will begin as soon as possible with current expectations that we will be able to submit the required reports for the mine and rail in the second quarter of 2024 and the reports for the port in the second quarter of 2024. The Amapá State Environmental Agency will then review the application for the LI’s, and we anticipate that these licenses will be granted in 2024.

This timeline is substantially shorter than expected on a greenfield site, where the impact study and associated approval can typically take between 24 and 36 months, while the Amapá Project could achieve this in 12 to 16 months.

Tailings Storage Facility

One of Cadence’s initial investment criteria into the Amapá Project was the safety and stability of the TSF. As such, before entering into the investment agreement with our joint venture partners, we carried out a TSF review by an internationally recognised consultant group and were satisfied with the structure and stability of the TS. Nonetheless, given the lack of reporting and maintenance from 2014 onwards, the TSF at the Amapá Project was considered a high risk. The work carried out since 2019, including maintenance, reporting, drilling and compliance, has meant that the Amapá Project TSF is approaching the lowest risk rating for operating TSF. The intent is that the TSF will continue to improve its risk rating. This will be achieved by completing a dam break study, installing video monitoring on the TSF, and ongoing inspection and remediation of various TSF-associated infrastructure. 

Shares Magazine Investor Evening

CEO Kiran Morzaria will present at the Shares and AJ Bell ‘LIVE’ investor evening in London on 13 September 2023.

The presentation will contain information about the Company’s flagship Amapa Iron Ore Project in Brazil following a recent visit by the management team. 

The Shares and AJ Bell Media, investor evening event is an opportunity for senior board directors to make a presentation about their company and update existing and potential investors on their business plans.

Investors will have the chance to discover investment opportunities and get to know the companies better by asking questions ‘live’ in person after the presentation over drinks and buffet food.

Shareholders and potential investors can register to join us LIVE at the Novotel, Tower Hill, for free via this link:

https://www.sharesmagazine.co.uk/events/event/shares-investor-evening-london-live-event-130923

Pre-Feasibility Executive Summary

As part of the ongoing engagement with potential investors, we have also released an executive summary of the previously announced PFS, which is available here.

Qualified Person

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

Cautionary and Forward-Looking Statements

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

The information contained within this announcement is deemed by the company to constitute Inside Information as stipulated under the Market Abuse Regulation (E.U.) No. 596/2014, as it forms part of U.K. domestic law under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.