Cadence Minerals (KDNC ) has completed phase one of its investment into the Amapa Iron Ore Project to acquire an initial 20% as part of an ongoing agreement with Indo Sino Pty Ltd.
Cadence has an agreement with its joint venture partner, Indo Sino Pty Ltd, to invest in and acquire up to 27% of the joint venture company Pedra Branca Alliance Pte. Ltd. (“JV Co”).
To acquire its 27% interest Cadence Minerals is investing US$ 6 million over two stages in JV Co. The first stage is for 20% of the JV Co the consideration for which is US$2.5m while the second stage of investment will be for a further 7% of JV Co for a consideration of US$3.5m.
Today, Cadence Minerals told investors that all of the required contractual and regulatory documentation relating to securing this first stage has now been both completed and filed.
Pedra Brance Alliance (“PBA”), the Cadence and IndoSino joint venture company now owns 100% of the equity of DEV, which owns the large-scale Amapa iron ore mine, beneficiation plant, railway and private port, and consequently Cadence is a 20% owner of PBA, it noted.
Anglo American, a previous owner of the project, valued 100% in the Amapa Project at $1.2bn. The Group impaired the asset in its 2012 Annual Accounts to $660m for 100%.
Cadence’s second stage investment for a further 7% of PBA for a consideration of US$3.5 million was conditional on several material preconditions, which have now been satisfied, it noted. Cadence will now vest its next 7% which will be funded from its recent equity raise.
If it does not complete the investment, Indo Sino will have a twelve-month option to buy the shares in PBA held by Cadence for 1.5 (1 ½) times the price paid by Cadence for the shares.
Cadence CEO, Kiran Morzaria, commented: “I am pleased to report that we have formally completed phase one of our investment into Amapa to acquire our initial 20 percent. Furthermore, our board is delighted that the recent fundraise to fund the second investment phase was oversubscribed. It is clear that our vision for Amapa is shared by new and existing shareholders alike given the high level of interest and participation in the fundraising.”
The Company updated the Mineral Resource Estimate for the Amapa Project, which first commenced operations in December 2007, in November 2020, increasing the MRE by 21%.
The current MRE of Amapa contains an Mineral Resource of 176.7m tonnes grading 39.7% of iron (Fe) in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.
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