TIDMKDNC
RNS Number : 4224R
Cadence Minerals PLC
01 March 2023
Cadence Minerals Plc
("Cadence Minerals", "Cadence", or "the Company")
Corporate Update
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to
provide an update on the progress of three of its investments. The
latest presentation is available on our website.
Hastings Technology Metals (ASX: HAS) ("Hastings")
On 25 January 2023, Cadence completed the sale of its 30% stake
in several mineral concessions forming part of the Yangibana Rare
Earths project for a consideration of 2.45 million Hastings shares,
equating to approximately 1.9% Hastings issued share capital. This
consideration was a premium over the Net Present Value ("NPV") of
the Cadence portion of the mineable material, based on the
definitive feasibility ("DFS") updated by Hastings on 21 February
2022.
Hastings recently published an update on the Yangibana Rare
Earth Project, highlights of which are as follows:
Ø Significant progress during the last two months on enabling
construction and ordering long lead critical items.
Ø A total of $146 million in contractual commitments has been
made to date, demonstrating the high degree of confidence by the
Hastings Board in the future of the Yangibana project.
Ø Ore Reserves increased 25% to 20.93Mt at 0.90% Total Rare
Earth Oxide (TREO) grade, increasing mine life to 17 years.
Ø Senior management appointments in the last two months include
Rudolph van Niekerk as COO, Robert Klug as General Counsel, and Tim
Gilbert as General Manager of Operations. Recruitment is underway
for Project Director and the CFO position following the recent
career move by Matthew Allen.
Ø Cost and schedule review identified potential areas for
construction contracting model restructuring, optimisation and
de-risking.
Ø The recent engagement of Boston Consulting Group (BGC) to
assist in further investigating the merits of an integrated
mine-to-magnets strategy and exploration of partnership
opportunities.
The full announcement concerning the Yangibana sale is available
here .
Sonora Lithium Project ("Sonora")
Cadence holds a partial interest in the Sonora Lithium Project
via a 30% stake in the joint venture interests in each of Mexilit
S.A. de CV ("Mexilit") and Megalit S.A de C.V ("Megalit"). Mexilit,
with its El Sauz and Fleur concessions, forms part of the Sonora
Lithium Project and is a part of the reserve in the mine plan after
initial mining in the La Ventana concession (100% Ganfeng). Mexalit
and Megalit are each 70% indirectly owned by Ganfeng Lithium Co
("Gangfeng") and 30% by Cadence.
A feasibility study report was published in January 2018. The
report estimated a pre-tax project net present value of US$1.253
billion at an 8% discount rate, an Internal Rate of Return of 26.1%
and Life of Mine operating costs of US$3,910/t of lithium
carbonate. Ganfeng has stated that they expect the capacity of
phase I will deliver 50,000 tons of lithium hydroxide, which is 42%
above the anticipated production levels outlined in the feasibility
study.
In 2021, a decree was passed by the Mexican government to reform
the domestic energy sector ("Decree"). The Decree stated that
lithium would be included among the minerals considered strategic
for an energy transition. As a result, no new concessions for
lithium exploitation by private companies would be granted. Earlier
this month, the Mexican government passed a presidential decree
confirming that within a 900 square-mile lithium mining zone in
northern Sonora state, existing concessions would "remain safe".
This aligns with the general opinion that the Decree passed by the
Senate only impacts licenses, concessions, or contracts to be
granted, not already those granted, as is the case for the Sonora
Lithium Project.
Amapá Iron Ore Project ("Amapá")
E arlier this year, Cadence published an economically robust
Pre-Feasibility Study (" PFS") for the Amapa Iron Ore Project.
Along with the PFS and subsequent consultations with the key
contractors, we have identified three areas of possible improvement
to Amapá.
The first will be to review the historical drilling and
geological data north of the Amapá mineral concessions. The data
has been acquired and is currently being processed to identify
further iron ore resources, which, if present, would further
increase the mine life. The second area of potential improvement is
a change in the layout of the port at Santana by moving the railway
loop further from the shore. A scoping study regarding this option
has already been completed and identified capital savings. The last
area of potential improvement is to investigate and review the
flowsheet to improve the final product quality over and above the
current 65% iron ore concentrate.
During 2022, the impact of the Ukraine war and the legacy of
Covid on supply chains resulted in higher shipping costs and lower
iron ore pricing. As a result, only one iron ore shipment was made
during the year. The net proceeds of this shipment, along with
approximately half of the net proceeds from the shipments in 2021,
have been used to pay the secured bank creditors as per the
settlement agreement announced in December 2021 here . Given these
unprecedented macro-economic conditions, DEV Mineração S.A. ("DEV")
was unable to meet the 2022 payment schedule as per the settlement
deed and although the bank creditors have reserved their rights,
the settlement deed remains in full effect with all parties in
discussions with a view to agree a new timetable in order to
rephase payments so these can be met in light of market
conditions.
With improving iron ore prices and stability returning to
shipping costs, the sale of the 58% iron ore concentrate stockpile
is now economically viable. We expect shipping to recommence in the
next six months, with the net revenues being used to pay the bank
creditors, as per the settlement agreement.
Cadence CEO Kiran Morzaria, commented: "As is the nature of any
investment company, our value is driven by the sum of our parts.
With the recent reduction in Hastings share price our portfolio
valuation has also reduced. However, we see no fundamental reason
for this price volatility given the substantial progress. Hastings
is making in the construction of the Yangibana rare earth project
and we look forward to them advancing to project towards production
in 2024."
"Cadence's current public and private investments have continued
to perform delivering a unrealised return of approximately 172% and
our listed investments have delivered a total return (realised and
unrealised) of 328%."
"Our confidence in Amapa continues to grow thanks to a potential
further increase in the overall iron ore resource, improvements to
the port and prospects for restarting iron ore shipments in the
coming months. I look forward to providing further updates."
For further information
contact:
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
Enzo Aliaj
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
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.
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.
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