TIDMKDNC
RNS Number : 5893C
Cadence Minerals PLC
18 June 2019
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Macarthur Minerals (TSX-V: MMS) Files Technical Report for Lake
Giles Iron Ore Project
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note
the announcement today from Macarthur Minerals (TSX-V: MMS)
("Macarthur") regarding the results of the Preliminary Economic
Assessment ("PEA") undertaken by independent consultants Engenium
Pty Ltd ("Engenium") for its 100% owned Lake Giles Iron Ore Project
("the Project") in Western Australia.
The PEA was completed for a 2.5 to 3.4 Mtpa operation
incorporating the Moonshine Magnetite and Ularring Hematite Mineral
Resources to produce a high-grade blended concentrate in excess of
65% Fe. The technical and financial evaluation in the PEA indicates
the Project is potentially economically viable and further project
development is justified.
The independent technical report, entitled "NI43-101 Technical
Report, Macarthur Minerals Limited, Preliminary Economic Assessment
Lake Giles Iron Project, Western Australia, (the "2019 Technical
Report") with an issue date of June 13, 2019, was prepared in
accordance with the requirements of National Instrument 43-101 ("NI
43-101"). The 2019 Technical Report is filed under the Company's
profile on the System for Electronic Document Analysis and
Retrieval ("SEDAR") website at www.sedar.com (filing date: June 17,
2019) and on the Company's website at
www.macarthurminerals.com.
Cadence holds approximately 9.8% of the issued equity interest
in Macarthur, which is an Australian mining exploration company
focused primarily on iron ore, nickel, lithium and gold in Western
Australia. It also has a lithium project in Nevada, USA.
Macarthur Announcement. PEA Highlights
The key financial outcomes are summarised below:
-- Project after-tax real Net Present Value ("NPV") of US$375
million at an 8% discount rate, based on a discounted cash flow
model with:
o a project life of 31 years with saleable product of 2.5 to 3.4
million tonnes per annum ("Mtpa")
o total sales of 83 million tonnes; and
-- Total Life of Mine ("LOM") free cash flow of US$1,465m.
-- Total direct operating costs (excluding royalties) are
estimated at US$3.1 billion (rounded).
-- Total project costs (direct and indirect operating costs,
capital spend including contingency, rehabilitation and sustaining
capital) are estimated at US$4.5 billion (rounded).
-- The project is potentially highly profitable with a
discounted payback (based on NPV) in 3 years.
-- Average operating costs of US$37.62 including US$31.30/t Free
on Board ("FOB") for hematite and US$37.43/t FOB for magnetite.
-- Total revenue estimated at US$6.8 billion (rounded).
-- Total capital cost estimated at US$326 million including contingency of US$44 million.
-- Rehabilitation costs of US$38 million and sustaining capital
expense over LOM of US$54 million.
Note: The outcomes of the economic assessment is preliminary in
nature and includes inferred mineral resources that are considered
too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as mineral
reserves, and there is no certainty that the preliminary economic
assessment will be realised.
Revised Project Strategy
In February 2011, Macarthur released its Preliminary Economic
Assessment ("2011 PEA") for the Moonshine Magnetite Project for the
production of 10 Mtpa of high-grade magnetite concentrate (press
release dated February 7, 2011). The 2011 PEA outlined several
logistical and port scenarios including slurry transport 110 km to
a dewatering plant and rail siding south of the town of
Menzies.
Similarly, in September 2012, Macarthur released its
Prefeasibility Study ("2012 PFS") (press release dated August 16,
20122) for the Ularring Hematite Project, which focused on mining 2
million tonnes per annum ("Mtpa") of hematite/goethite iron ore.
The 2012 PFS outlined a wet beneficiation process that would
produce a +60% Fe sinter fines product.
Since the release of those studies, the iron ore market has
undergone a dramatic shift where low grade iron ore <60% Fe is
currently heavily discounted while the high-grade market, including
magnetite concentrate, is attracting premium pricing.
In response, Macarthur has revised its strategy to align the
Projects with the robust current and forecast market conditions,
capital markets and available capacity of regional infrastructure.
The major impediment to development of the Moonshine Magnetite
Project envisaged by the 2011 PEA, was the substantial capital cost
and access to export capacity at the Port of Esperance. The revised
project strategy targets an initial production rate of 3 Mtpa of
high grade, low impurity concentrate, along with streamlined
project infrastructure, significantly reducing capital cost.
The revised Projects will see a combined hematite and magnetite
operation where the product will be a high grade, blended magnetite
and hematite concentrate. This strategy allows low grade hematite
(56% Fe) to be blended with a high-grade magnetite concentrate
(68%) in a ratio to achieve a final concentrate grading 65% Fe.
Operating and Capital Costs
The operating strategy for the Lake Giles Project is to export
high-grade (+65% Fe) magnetite concentrate via the existing Port of
Esperance ("Port") owned and operated by the Western Australian
Government. Magnetite concentrate will be processed on site, road
hauled 90km to the existing open access rail network operated by
Arc Infrastructure and then railed to the Port of Esperance.
As reported on April 8, 2019, access to the existing rail
network has been confirmed and Macarthur has entered into an
Exclusive Negotiation Agreement with Aurizon for rail haulage
services. The Company is in advanced discussions with the Western
Australian Government for access to the Port and the capital
estimate includes infrastructure upgrades at the Port.
The full release can be found at:
https://web.tmxmoney.com/article.php?newsid=7834524061311745&qm_symbol=MMS
Cadence Minerals CEO Kiran Morzaria commented: "The PEA
undertaken by Macarthur on the Lake Giles Iron Ore project confirms
quality, potential profitability and long term revenue potential
for the Lake Giles iron ore project, driven, as the company points
out, by a dramatic shift in high grade magnetite concentrate
pricing."
"As shareholders, Cadence are delighted to continue to support
Cameron McCall and the Macarthur Minerals team."
This news release is not for distribution to United States
Services or for Dissemination in the United States.
- Ends -
For further information:
Cadence Minerals plc +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker) +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
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 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 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 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 information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCGMGMVNRRGLZG
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