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Cadence Minerals (AIM/NEX: KDNC;
OTC: KDNCY) is pleased to provide an update on its investment in the
Amapa Iron Ore Project, Brazil.
Progress with Secured Bank
Creditors
Since our last update in early
July, DEV Mineração S.A's ("DEV") Cadence and Indo Sino Pty Ltd ("the
Investors") have continued a constructive dialogue with the secured bank
creditors ("Bank Creditors"). The Bank Creditors have proposed
settlement terms, and DEV and the Investors have agreed in principle
(subject to contract) to key terms and have proposed some amendments. We
will update the market once further progress has been made.
As mentioned in previous
announcements, the remaining major precondition for Cadence to make its
initial investment in the Amapa Project requires DEV to reach a
settlement agreement with the Bank Creditors. On completion of the
conditions and the release of the Cadence escrow monies, Cadence will
become a 20% shareholder in the Amapa Iron Ore Project via our joint
venture company which will own 99.9% of DEV Mineração S.A's ("DEV").
Further details about Cadence's
rights, potential investment, and the Judicial Restructuring Plan in
relation to the Amapa Project are presented in the announcements of the
30 August 2019 and 7 August 2019.
Commercial Court of São Paulo
("the Court")
On the 28 July, the Court,
responding to an appeal by the Bank Creditors, reaffirmed its decision
allowing DEV to commence shipping iron from the stockpiles situated at
DEV's wholly-owned port in Santana, Amapa.
Operational Update
Companhia Docas de Santana
("CDSA"), a public (municipal) company and the port operator has asked
for some additional non-statutory contractual requirements and
undertakings; DEV has provided the requested documentation, and it is
liaising with The State of Amapa whom will provide the necessary
documents to CDSA. Cadence will provide an update once the first
shipment is underway.
Cadence CEO Kiran Morzaria
commented: "Our team have worked tirelessly to complete the final stages
of our investment into the Amapá project. I am pleased that we have
progressed our discussions with the Bank Creditors and we move ever
closer to what will be a historic milestone for our company. The
COVID-19 crisis has impacted Brazil and the state of Amapa, and as such,
the safety of our staff, colleagues and their families remain a top
priority."
About the Amapá Project
The Amapá Project was owned by
Anglo American plc and Cliffs Natural Resources and consists of a
large-scale iron ore mine, beneficiation plant, railway, and private
port. In 2012 the operation produced 6.1 Mt of iron ore concentrate and
reported operating profits from their 70% ownership in the Amapá Project
of US$120 million (100% - US$171 million). Before its sale in 2012,
Anglo American valued its 70% stake at US$462m in its 2012 Annual Report
(100% - US$600m).
As previously announced, the
total historical mineral resource contains an estimated 348 Mt of ore @
38.9% iron content ("Fe"). The ore is beneficiated at the mine to 65% Fe
Pellet Feed and 62% Fe Spiral Concentrate. Based on available historic
mine plans and an independent consultant review, it is expected that at
full production the Amapá Project has a mine life of 14 years and at
full capacity is targeting to produce up to 5.3 Mt of iron ore per
annum.
Source: Cadence Minerals |
