Cadence Minerals (KDNC ) has announced the Amapa Project in Brazil has taken a significant step forward after permission to begin the shipment of iron ore stockpile has been granted by the Commercial Court of São Paulo.
The Court ruled that DEV Mineração S.A. (“DEV”), owner of the Amapá iron ore project, can commence the shipment from DEV's wholly-owned port in Santana, Amapá, Brazil.
The ruling will allow export of sufficient iron ore to realise a US$10 million profit from the Amapá stockpiles, after the deductions of all logistical, regulatory, shipping and sale costs.
An independent survey indicates that some 1.39 million tonnes of iron ore in three stockpiles with an average Fe grade of about 62.12% are available for export.
Cadence, along with the other JV Partners, are in detailed discussions with possible offtake partners and shipments are expected to begin in the coming months. The proceeds of the iron ore sales will be used to pay labour and small creditors and to bring the Amapá iron ore project back into production.
Cadence Chairman Andrew Suckling commented; "The ruling from Brazil's São Paulo court marks a significant milestone for the re-opening of the Amapá iron ore project and its long-term benefits for stakeholders and the region. I would like to put on record my sincere thanks and gratitude for the tireless efforts by Cadence management, IndoSino and DEV and its advisors. This ruling brings the Amapá Project back to life.
Despite the severe disruption created by COVID-19, management has remained focused on delivering the Amapá Project as planned, all the while supported by a robust iron ore market that continues to justify the opportunity. Regardless, our primary concern at this time has been to ensure the safety and wellbeing of all our staff, and it is my fervent hope that employees, shareholders, contractors and their families continue to remain safe and secure through this challenging time."
Cadence CEO Kiran Morzaria commented; "For Cadence, this a significant step forward for the redevelopment of the fully integrated Amapá iron ore project. We are truly entering the operational phase of the asset, and despite the current turbulent and volatile market conditions, the iron ore prices remain robust. The whole Cadence and JV team have been active in delivering an excellent outcome for Amapá.
The shipment of the iron ore stockpile at the port of Santana will now trigger long overdue payments to hundreds of local ex-employees and small creditors. It will assist with funding the necessary recommissioning studies required to re-open the mine, which will, in turn, will rejuvenate the regional economy and provide significant employment, health and educational benefits for its people."
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Our Chairman has previously referred to Amapá as a "Company Changing" project for Cadence, and it is now on its way to deliver this goal. With this in mind, I now look forward to providing shareholders with further updates as the recommissioning process moves forward."
The Company has previously announced that through a US$2.5m investment it will become a 20% shareholder in the Ampana Project. The investment requires one final precondition to be met. This precondition requires DEV to reach a settlement agreement with the secured bank creditors. On satisfaction of the prerequisites and the release of the investment monies currently held in escrow the Company will become a 20% shareholder in the Amapá Project via their joint venture company which will own 99.9% of Dev. While waiting for the settlement, the JV Partners will work with DEV to advance the restart of the Amapá Project using the proceeds of the iron ore, accelerating the production from the Amapá Project.