RNS Number : 1479Q
Cadence Minerals PLC
27 June 2022
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Completion of sale of Cadence's 31.5% Equity Stake in Lithium
Technologies and Lithium Supplies and 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" or the "Buyer"). Evergreen is an
unlisted Australian company which is intending to list on the
Australian stock exchange.
-- Cadence and all LT and LS shareholders have completed the
sale of 100% of LT and LS for up to A$21.05 million (GBP12.08
-- Cadence owns 31.5% of LT and LS and has received AS$3.16
million (GBP1.81 million) in Evergreen shares.
-- Subject to Evergreen achieving performance benchmarks Cadence
would receive a total consideration of A$6.63 million (GBP3.80
-- 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
(GBP11.82 million). Cadence has 31.5% of LT and LS and will receive
up to A$ 6.63 (GBP3.80 million).
Evergreen is unlisted public company in Australia which has been
specifically incorporated for the acquisition of lithium assets.
The acquisition of LT and LS is its first acquisition. 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
(GBP1.81 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
(GBP1.99 million). The pricing of Evergreen shares associated with
this consideration is based on a defined pricing mechanism linked
to the VWAP and date at which the performance milestones are
If the performance targets are met the total consideration for
Cadence's equity stake in LT and LS would be AS$6.63 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
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 (GBP516). As of 31 December 2021, the total carrying values
of LT and LS in the Company's balance sheet was approximately
GBP803,000. Therefore based on the current share price of
Evergreen, the initial profits on the sale of our equity in LT
&LS is GBP1.01 million, with the potential for this to increase
to GBP2.99 million should the performance milestones be
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 up to 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 analyze
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 focusing 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
WH Ireland Limited (NOMAD +44 (0) 207 220 1666
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.
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
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(END) Dow Jones Newswires
June 27, 2022 02:00 ET (06:00 GMT)
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