TIDMKDNC
RNS Number : 4141F
Cadence Minerals PLC
21 March 2022
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Cadence 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 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
identi ed 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 re ect
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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