CADENCE MINERALS PLC
Post-Tax Project NPV
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce the completion of the Pre-Feasibility Study ('PFS') on the
The PFS confirms the potential for the
Cadence holds a 30% interest in
The PFS was managed by
PFS Highlights:
Annual average production after ramp-up of 5.28 million dry metric tonnes per annum ('Mtpa') of Fe concentrate, consisting of 4.36 Mtpa at 65.4% Fe and 0.92 Mtpa at 62% Fe concentrate.
Post-tax Net Present Value ('NPV') of
Post-tax Internal Rate of Return of 34%, with an average annual LOM EBITDA of
Maiden Ore Reserve of 195.8 million tonnes ('Mt') at 39.34% Fe, demonstrating an 85% mineral resource conversion.
Free on Board ('FOB') C1 Cash Costs of
After applying tax rebates, a pre-production capital cost estimate of
Key assumptions: Long-term average price for 62% iron ore concentrate of
Opportunities: exploration target at the
Based on the positive outcome of the PFS, the owner of the Project DEV Mineracao S/A ('DEV') intends to advance the Project. The initial works will include optimising the capital expenditure, optimising processing plant availability and efficiency and developing the adjacent exploration targets to increase the mine life, after which work on a Feasibility Study can begin.
Cadence CEO
'The Study outlines a robust 5.28 Mtpa operation which can deliver excellent cash flows, and a post-tax NPV of
'We are also pleased to declare a maiden Ore Reserve of 195.8Mt at 39.34%, representing 85% resource to reserve conversion and confirming the robust project fundamentals.'
'The Project benefits from integrated infrastructure under the owner's control, a well-established processing route, low capital intensity and a quality product with an international reputation. Along with a skilled workforce, proximity to operational infrastructure and the potential to increase the mineral resource means that Amapa remains an incredibly attractive investment opportunity.'
'The opportunity for DEV is to advance the
Introduction
The Project consists of an open-pit iron ore mine, a processing and beneficiation plant, a railway line, and an export port terminal. DEV and its subsidiaries own the
The Project ceased operations in 2014 after the port facility suffered a geotechnical failure, which limited the export of iron ore. Before the cessation of operations, the Project generated an underlying profit of
DEV continued to operate the Project and rehabilitate the port up until 2014. However, due to the restricted iron ore exports, and cash flow constraints, in
In 2019 Cadence and Indo Sino, alongside DEV, submitted a judicial restructuring plan ('JRP') for approval by the unsecured creditors. As part of the JRP, DEV sought to redevelop the
It should be noted that the
The Mineral Resource and Ore Reserve statements have been prepared in accordance with the Guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources, and Ore Reserves, the JORC Code, 2012 Edition (JORC Code (2012)). Cost estimations were prepared by DEV, with input from third-party independent engineers and subsequently reviewed by WAI using the internationally accepted practice for PFS-level studies.
Location
The Amapa mine is some 125 km northeast of the state capital Macapa, and the port facility is located on the
The port site in the municipality of Santana is located 90 km from the mouth of the
Amapa Project Components
The Amapa Project PFS encompasses four distinct but completely integrated operational components that form part of the study, as illustrated in the figure here.
An open-pit iron ore mine with various open pits, an iron ore concentration and beneficiation plant, associated waste rock dumps, and a tailings management facility.
Railway Line
Integrated 194 km railway line connecting Serra do Navio to the port terminal at Santana. The rail passes via Pedra Branca do Amapari (180 km from the port), located 13 km away from the Amapa mine and plant complex by graded road.
An integrated industrial port site, privately-owned and controlled by DEV, is located in Santana. The terminal had the capacity for loading Supramax and Handymax vessels.
Transhipment Solution
A Capesize vessel is partially loaded at the berth in Santana port and topped off in the open ocean, 200 nautical miles from the berth.
Pre-Feasibility Study
The PFS scope covers the existing mine, plant, rail, and port. Capital and operational estimates were developed for refurbishing the facilities to a safe working level. The study investigates all the design and business parameters necessary to operate the
Cost Estimates
The capital costs ('CAPEX') estimate is based on the layout for all areas of the Project and is supported by mechanical equipment lists and engineering drawings. The costs for these items have been derived from vendor quotes for the equipment and materials or consultant engineering databases. The CAPEX estimate is after tax (any duties and taxes deemed to be recoverable are calculated separately), includes contingency, and excludes escalation. The CAPEX estimate includes all the direct and indirect costs, local taxes and duties and appropriate contingencies for the facilities required to bring the Project into production, as defined by a Pre-Feasibility level engineering study.
Competent Person's Statement
The information that relates to Mineral Resources and Ore Reserves is based on information compiled by
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 Ore Reserve and Mineral Resource Estimate have been prepared by Competent Persons, with Competent Person's Statements at the end of the release. The Ore Reserves and Mineral Resources that underpin the production target have been prepared by a Competent Person that meets the requirements of the JORC Code.
The PFS developed engineering designs to provide costs at a +/- 25% level of accuracy. The company has concluded that it has a reasonable basis for giving the forward-looking statements and forecasted financial information included in this announcement.
This announcement has been prepared in accordance with JORC code 2012 and AIM listing rules. All material assumptions relating to production and financial forecasts are detailed in this report. Material and economic assumptions are summarised in the body of this release. Rounding may cause some computational discrepancies for totals in the tables in this announcement.
The information contained within this announcement is deemed by the company to constitute Inside Information as stipulated under the Market Abuse Regulation (EU) No. 596/2014, as it forms part of
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