Following the announcement from Cadence Minerals (KDNC ) that hot commissioning at the Azteca iron ore plant in Brazil has completed, Zeus Capital has released an updated research note.
“We retain our fair value of 14.6p per share unchanged today,” wrote Zeus.
“Management said it would finish commissioning well inside the 45-day window, and it did so in 30 days. Delivering on guidance in this way builds the credibility that matters as Cadence moves from developer to producer. The near-term catalysts are well defined: the Operating Licence, assay and test work results within weeks, bridge completion, and a targeted first shipment before year end. Beyond Azteca, an operating track record and early cash flow should strengthen the platform for the 2027 DFS on the far larger Amapá redevelopment. That project is where we see the substantial long-term value, given a pre-feasibility study post-tax net present value of nearly US$2 billion. We continue to view Cadence as an attractive, catalyst-rich route into a high-grade iron ore project with existing infrastructure.”
The Azteca plant processed about 6,200 tonnes of feed into about 2,800 tonnes of concentrate, a mass recovery of roughly 45%.
It ran at around a third of capacity, and deliberately on lower-grade accessible feed so the licence application could proceed without waiting for access works. The iron grade of the commissioning concentrate is not yet known, with assays and optimisation test work due in four to six weeks.
View from Vox
The Operating Licence remains pending, and its arrival will be the next big news event. But things have been moving along in a timely manner as far as the Azteca re-start goes, and management is keeping its target of commercial production and a first shipment before year end, at an unchanged rate of about 380,000 tonnes of 65% Fe concentrate. The larger prize is the reopening of the larger Amapá iron ore project, and it’s on that which Zeus bases its fair value of 14.6p per share.