Cadence Minerals (KDNC ) announced that DEV Mineração S.A's ("DEV") has commenced the shipment of 45,000 tonnes of iron ore stockpiles from the Amapa Iron Ore Project.

The mineral explorer said the shipment was approved via a previous court petition and represents the first shipment of Iron Ore from this asset since its closure in 2015. The company told investors that the vessel is currently loading and is due to sail this week.

In April 2020, the Commercial Court of São Paulo ruled that DEV., owner of the Amapa Project, a large-scale iron open pit ore mine in Brazil, could commence the shipment of the iron ore stockpiles situated at DEV's wholly owned port in Santana, Amapa, Brazil.

On 19 February 2021, the State of São Paulo Upper Court published the ruling allowing DEV to export sufficient iron ore to realise a $10 million profit. Soon after, operations restarted moving material from DEV's wholly owned port to Docas De Santana some 2 km away.

DEV worked with Indo Sino Pty and Cadence to start operations, charter a vessel and carry out a competitive bid process for the cargo. The buyer is one of the world's largest globally diversified natural resource companies and a major producer and marketer of commodities.

The first portion of the net revenues shall be used to pay historic small and employee creditors (~US$2.5 million), after which c.US$6m of the net revenues will be used to begin recommissioning studies on Amapa. The remaining revenues will be put into working capital for the operations and payment against the outstanding amount due to the Bank Creditors.

The group said operations continue at the port in preparation for the next shipment, and at the mine, security has been put in place and tailing dam maintenance has commenced.

In September 2020, DEV, Cadence and Indo Sino Pty ("the Investors") agreed in principle to the settlement terms proposed by the secured bank creditors ("Bank Creditors").

The execution of a settlement agreement with the Bank Creditors would represent the satisfaction of Cadence's remaining major precondition to make its initial 20% investment in Amapa. On completion of the conditions and the release of the Cadence escrow monies, it will become a 20% shareholder in Amapa via its JV company, which will own 99.9% of DEV.

 "I would once again like to put on record my sincere thanks and gratitude for the tireless efforts by Cadence management, IndoSino and DEV and advisors to bring the project to fruition,” commented Chairman of Cadence Minerals, Andrew Suckling.

He said, “This inaugural iron ore shipment brings Amapá back to life, and in time we expect the mine and infrastructure to play a key role in helping to regenerate the regional economy, with all the employment, health and educational benefits that will bring to this part of Brazil."

Despite the severe disruption created as a result of the COVID-19 pandemic, Sucking stated that management had remained focused on delivering the Amapa project as planned, “all the while supported by a robust iron ore market that continues to justify the opportunity.”

"The first iron ore shipment from Amapa since 2015 and the resultant earnings represent a milestone of huge significance, both for our board and team who have worked so hard to bring the project back to life and for the potential opportunities and benefits it will bring to the wider Amapa community,” commented Cadence’s Chief Executive, Kiran Morzaria.

He added, “As regards the secured bank creditors, we believe all parties are aligned to complete and execute the agreement which will see Cadence become a 20% shareholder in Amapa. I look forward to updating you on further developments as we move to complete the final stage of phase 1 of our Amapa investment plan."

Cadence said it remains focused on delivering the Amapa project as planned, a move supported by “a robust iron ore market that continues to justify the opportunity.”

Today’s news marks the first iron ore shipment from Amapa since 2015. Both this and the resultant earnings represent “a milestone of huge significance” the company told investors. Looking ahead, Cadence said it believes that all parties aligned ‘to complete and execute’ the agreement which will see Cadence Minerals become a 20% shareholder in Amapa.

Shares in Cadence Minerals have increased by over 30% in value since the beginning of 2021. The stock was trading 5.19% higher this morning at 20.25p following the news.

Reasons to KDNC

Amapá – 30% (once final agreement with bank creditors has been completed)

Candece plans to rehabilitate Amapá, including commissioning the studies required of bank finance, shipping of the iron ore from the stockpile and the restarting of full operations.

The historic mine plan would mean that Amapá would produce at steady-state production an estimated 4.4 Mt of 65% iron and 0.9 Mt of 62% iron per annum for approximately 14 years.

Cinovec – 16%

Cadence holds around 12% of the equity in European Metals, which, through its subsidiary, Geomet, controls the exploration licences awarded for the Czeach Cinovec Lithium Project.

Cinovec, which is the largest hard rock lithium deposit in Europe, is strategically located to produce lithium for Europe with the goal of contributing to a sustainable supply chain for a world leading centre for electric vehicle development and manufacture in Europe.

Diego Pavia, CEO of EIT InnoEnergy, said he views Cinovec as “critical” to the development of Europe's energy storage industry and in meeting the EU's climate goals of electrification of mobility and large-scale development of renewable energy storage.

Last week, the ongoing nineteen-hole resource drilling programme at the Cinovec Project returned strong drilling results. Cadence’s Chief Executive, Kiran Morzaria told investors that the encouraging results ‘serve to highlight the overall quality of the Cinovec project.’ 

Yangibana – 30%

Last year, Cadence unveiled ‘outstanding’ rare earth oxide grades in a report which highlighted positive drilling results at the Yangibana rare earth project in Australia, exceeding its expectations for its planned 20,000 metre 2020 exploration drill program.

Cadence, which owns 30% of three mining leases and six exploration licences which form part of the Yangibana Rare Earth Deposit, expects to advance the programme until Q420.

Follow News & Updates from Cadence Minerals here: