TIDMKDNC
RNS Number : 1209F
Cadence Minerals PLC
15 May 2017
Cadence Minerals Plc
("Cadence Minerals" or "Cadence")
Bacanora Minerals Board Changes and Project Update
Cadence (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that
Bacanora Minerals Plc ("Bacanora") has announced changes to its
board as well as providing an update on its flagship Sonora Project
('Sonora') in Mexico where a Feasibility Study ('FS') for a 35,000
tonnes per annum lithium carbonate operation is now on course for
completion in late 2017. The Company has also recently commenced a
FS for the Zinnwald Project ('Zinnwald') located near Dresden,
Germany.
The full Bacanora release is available at:
http://www.investegate.co.uk/bacanora-minerals-ld--bcn-/rns/board-changes-and-operations-update/201705150700100678F/
.
Project Updates
Sonora, Mexico
FS activities continue on the Sonora Project, which is one of
the world's larger lithium resources. Metallurgical test work
continues at the SGS laboratories in Perth and Ausenco Limited is
currently completing the flow sheet design and mass balance to
finalise operating and capital cost estimates. IMC Mining
Consultants in Tucson has commenced mine planning and equipment
selection for the open pit mining operation. Within Sonora, local
infrastructure, energy and natural gas supplies and consumable
chemicals for the project continue to be a focus as a result of the
previously reported increases in costs for natural gas and chemical
reagents. The FS report will also include an updated Mineral
Resource Estimate ('MRE') and geological model by SRK Consulting
(UK) Limited based on the infill drilling programme which was
completed in Q3 2016.
The pricing environment for lithium carbonate has strengthened
to close to US$12,000/t from an average of around US$6,000/t in
2015 (source: http://trugroup.com/lithium-market-conference.shtml).
The pricing of lithium carbonate shipments to China and Japan
remained strong in January 2017, with reported sales by major
producers in the region of $12,000/t and spot sales in Japan and
China around $15,000/t (source:
(https://seekingalpha.com/article/4040100-lithium-miner-news-month-january-2017).
With this in mind, the Company will update the pricing assumptions
in its FS and expects to announce the updated long term pricing
forecast for lithium carbonate for the FS prior to the FS being
released.
Reflecting its commitment to working with Bacanora to deliver a
35,000 tonne per annum lithium carbonate operation which can supply
the fast-growing Asian battery market, cornerstone investor Hanwa
continues to facilitate discussions with regards to securing
long-term project debt funding to contribute to the construction
capex.
Zinnwald, Germany
The Company has commenced the FS at the Zinnwald Lithium Project
in Germany, in which it has a 50% interest. Zinnwald benefits from
its proximity to Dresden, a major centre of the German chemical
industry. The ability to source downstream chemicals and skilled
professional labour is considered a significant advantage in
Bacanora's strategy to develop a downstream, high value lithium
product suite. In addition, close proximity to the rapidly growing
German automotive and renewable industries provide a very
significant potential local market for Zinnwald lithium
products.
Baconora's 50% partner in Zinnwald, SolarWorld AG
('SolarWorld'), recently announced its intention to file for
bankruptcy protection in Germany due to ongoing pricing pressures
in its core solar markets. Under the terms of the agreement signed
with SolarWorld in February 2017, Bacanora acquired a 50% interest
in, and joint operational control of Zinnwald in exchange for a
cash consideration of EUR5 million and an undertaking to spend EUR5
million towards the cost of completing the FS. The agreement also
included an option for Bacanora to acquire the outstanding 50% held
by SolarWorld within a 24 month period for EUR30 million. The
Company is confident that the SolarWorld insolvency process will
have no material impact on the Company's interest, nor its
agreement with SolarWorld.
As part of the FS, bulk ore sampling work will be carried out
during the summer to provide samples for metallurgical testwork for
inclusion in the flowsheet. Additionally, an infill drilling
programme is planned for late 2017 to upgrade the existing resource
model in accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects. The drilling will test for a
number of potential by-products including tin, tungsten and SOP.
The 2014 resource estimate was reported in accordance with the Pan
European Code for Reporting of Exploration Results, Mineral
Resources and Reserves, and is outlined below:
Resource Category Tonnes* (000) Li Grade (ppm) Contained LCE**
(Tonnes)
Measured 10,283 3,661 200,277
Indicated 16,287 3,594 311,408
Inferred 9,867 3,705 194,484
* Li cut-off 2,500pm and >2 metres vertical thickness.
** LCE is the industry standard terminology for, and is
equivalent to, Li2CO3. 1 ppm Li metal is equivalent to 5.32 ppm LCE
/ Li2CO3. Use of LCE is to provide data comparable with industry
reports and assumes complete conversion of lithium in clays with no
recovery or process losses.
Changes to Board of Directors
The Company announces the appointment of Dr Andres Antonius, who
is based in Mexico City, and Mr. Junichi Tomono, head of the
Speciality Metals and Alloys department of leading Japan-based
global trading company Hanwa Co., LTD. ('Hanwa'), as Non-executive
Directors of the Company. Such appointments have been approved by
the Board of Bacanora and will take full effect upon completion of
standard regulatory reviews, which are underway.
The two appointments replace Mr. James Leahy, who has stepped
down from the Board to pursue other business interests, and Mr.
Kiran Morzaria who resigned from his position as Non-executive
Director of the Company earlier this year (see announcement of 26
January 2017 for further details). Mr. Tomono's appointment to the
Board follows the signing of a strategic partnership and offtake
agreement for Sonora which has seen Hanwa acquire an initial 10%
interest in Bacanora following a private placement (see
announcement of 2 May 2017 for further details).
Dr. Andres Constantin Antonius Gonzalez (aged 47) is a Mexican
national who has held positions in the Government of Mexico as well
as in the private sector and academia. Dr. Antonius previously
served as Undersecretary for Energy Policy and prior to that was a
staff member at the Agriculture Secretariat. Dr. Antonius also held
the role of coordinator for strategy of then President Elect Peña
Nieto's transition team in 2012. Dr. Antonius is currently CEO of
Plan B, a provider of strategic advice to a range of clients. Prior
to founding Plan B, he was the President of the Consulting Services
Group at Kroll, a world leader in risk management, business
intelligence, and investigations. Dr. Antonius has also held the
position of Director of Strategic Planning at the Instituto
Tecnológico Autónomo de México ('ITAM') and has taught economic
theory, game theory, and crisis management at both the ITAM and the
Universidad Iberoamericana. He received a B.A., Masters and PhD
degree in Economics from Harvard University. As part of his
package, Dr. Antonius will be granted 500,000 options to acquire
new ordinary shares in the Company at an exercise price of 86.5
pence. Such options vest as to 1/3 on the date of grant and an
additional 1/3 on each of the first and second anniversaries of the
date of grant and are exercisable for a period of three (3) years.
All of these options (and the common shares issuable upon exercise)
will be subject to applicable securities law hold periods.
Junichi Tomono (aged 43) has over 22 years' experience with
Hanwa, during which time he has worked in the Metals, Chemicals,
Alloys, Scrap metals and Mining divisions. Mr. Tomono has a special
focus on the battery chemicals sector including lithium. As head of
the Speciality Metals and Alloys department and as a Director of
three of Hanwa's subsidiaries, Mr. Tomono has played a key role in
Hanwa adopting a more global focus in response to the rapid growth
in the lithium battery sector.
The Sonora Lithium Project and Details of Cadence's
ownership:
Cadence owns a direct interest of 17.18% of Bacanora. The Sonora
Lithium Project is comprised of the following lithium
properties:
- La Ventana, La Ventana 1, and Megalit concessions, which are
100 percent owned by Minera Sonora Borax S.A. de C.V.("MSB"), a
wholly-owned subsidiary of Bacanora; Cadence, through its direct
interest of 17.18% of Bacanora, has an indirect interest in these
concessions of 17.18%.
- El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions,
which are held by Mexilit S.A. de C.V. ("Mexilit"). Cadence has a
43% direct interest in Mexalit through its Joint Venture with
Bacanora, and when combined with Cadence's direct interest of
17.18% in Bacanora, has a total economic interest in Mexalit of
43%.
- The Buenavista, and San Gabriel concessions, which are held by
Megalit S.A de C.V ("Megalit"). Cadence has a 30% direct interest
in Megalit through its Joint Venture with Bacanora, and when
combined with Cadence's direct interest of 17.18% in Bacanora, has
a total economic interest in Megalit of 43%.
Qualified Person:
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the
information contained in this announcement. Kiran holds a Bachelor
of Engineering (Industrial Geology) from the Camborne School of
Mines and an MBA (Finance).
For further information please
contact
Cadence Minerals plc +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD
& Broker) +44 (0) 207 220 1666
James Joyce
James Bavister
Square1 Consulting +44 (0) 207 929 5599
David Bick
Brian Alexander
About Cadence Minerals:
Cadence is dedicated to smart investments for a greener world.
The planet needs rechargeable batteries on a global scale -
upcoming supersized passenger vehicles, lorries and buses - require
lithium and other technology minerals to power their cells. Cadence
is helping find these minerals in new places and extracting them in
new ways, which will meet the demand of this burgeoning market.
With over GBP35 million vested in key assets globally, Cadence is
helping us reach tomorrow, today.
Cadence invests across the globe, principally in lithium mining
projects. Its primary strategy is taking significant economic
stakes in upstream exploration and development assets within
strategic metals. We identify assets that have strategic cost
advantages that are not replicable, with the aim of achieving lower
quartile production costs. The combination of this approach and
seeking value opportunities allows us to identify projects capable
of achieving high rates of return.
The Cadence board has a blend of mining, commodity investing,
fund management and deal structuring knowledge and experience, that
is supported by access to key marketing, political and industry
contacts. These resources are leveraged not only in our investment
decisions but also in continuing support of our investments,
whether it be increasing market awareness of an asset, or advising
on product mix or path to production. Cadence Mineral's goal is to
assist management to rapidly develop the project up the value curve
and deliver excellent returns on its investments.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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