TIDMKDNC
RNS Number : 8931Y
Cadence Minerals PLC
11 December 2017
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Acquisition of up to 100% of Hard Rock Lithium Prospects in
Argentina
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is delighted to
inform shareholders that it has executed binding investment
agreements with Lithium Technologies Pty Ltd and Lithium Supplies
Pty Ltd ("The Vendors") to acquire up to 100% of six prospective
hard rock lithium assets in Argentina.
These transactions mark the start of the Company's strategic
shift to earn in to early stage lithium assets in well-known
lithium jurisdictions where we see the potential to deliver
shareholder value by investing in projects that have shorter
development timeline to cashflow than a typical lithium carbonate
producer.
HIGHLIGHTS
-- The Vendors have claims over 55,773 hectares for six
exploration permits within the known spodumene bearing pegmatite
fields in San Luis Province, Central Argentina.
-- Initial site visit and reviews by Cadence have confirmed
multiple pegmatite outcrops across the six claims. Some of these
occurrences are proximate or along strike from known mineralised
pegmatites that have been previously mined for lithium minerals
(such as spodumene or lepidolite).
-- The pegmatite fields of San Luis have an important past
record of producing mica, beryl, spodumene, tantalite (tantalum
oxide), columbite (niobium oxide), and recently potassium feldspar,
albite and quartz.
-- Historic mines outside of the claims have produced lithium
oxide ("Li(2) O") at grades ranging from 4.5% to 6.5%.
-- The properties have good access and infrastructure support
for exploration activities on a year-round basis.
-- On grant of the exploration permits Cadence will acquire up
to 49% by spending GBP1.1m on exploration and drilling, and by
issuing GBP0.4 million of new ordinary shares in Cadence to The
Vendors.
-- Cadence has an option to acquire up to 100% by issuing a
further GBP1.75m of new ordinary shares in Cadence.
Kiran Morzaria, Chief Executive Officer of Cadence,
commented:
"These assets tick all the boxes that we were looking for:
located in a well-known lithium producing country and in a large
pegmatite field with known lithium compound production; potential
to deliver quicker and cheaper development timelines and produce
lithium oxide concentrate; near-term value triggers in the form of
sampling and drilling and low cost in terms of the acquisition
itself and the mineral exploration."
Andrew Suckling, Executive Chairman of Cadence, added:
"After an extensive review of opportunities, this acquisition
enables us to deliver on our strategic objectives.It also provides
us with an excellent platform to investigate building a larger
portfolio of interests in a country with an established lithium
industry, good infrastructure and supportive regulatory and fiscal
regimes. The presence of operators of the calibre of SQM and others
in our view is a testament to this. The next year promises to be an
exciting period for Cadence, and, we look forward to providing
further updates on our progress in due course."
New lithium assets
The Vendors have claims over a total of six hard rock lithium
assets in San Luis Province, Central Argentina. Combined, the total
area of the six assets is 55,773 hectares which delivers Cadence a
large potentially mineralised footprint to ramp up exploration
activities with the target of proving up a commercially viable JORC
code compliant resource.
There are over a dozen historic mines (mined between 1936-80) in
the Sans Luis area which produced lithium oxide at grades from 4.5%
to 6.5% Li(2) O. In recent years, assay results taken from the
spodumene outcrops across the region have returned results ranging
from 5% up to 8.1% Li(2) O. Aggregating historic estimates for the
legacy mines, there is an estimated 55,000 tonnes of lithium oxide.
However, with the application of modern exploration techniques, we
believe that there is potentially considerable exploration upside
across the six assets.
More broadly, there are several other competitive
advantages:
-- Readily accessible infrastructure - the assets are close to
main roads, power lines, railroads, and small cities for labour and
supplies; with highly competitive labour mining services
available
-- Relatively low topographic height range and smooth fields
enabling easy access to all project areas;
-- Mining friendly communities and active quarries provide advantages for exploration; and
-- No cities or lakes inside project areas which mitigates
environmental issues to a large degree.
Background of the Lithium - Bearing Pegmatite Fields of San
Luis
The San Luis and Córdoba lithium bearing pegmatite fields belong
to the Pampean pegmatite province that was defined to include the
economic fields of granitic pegmatites of central and north-western
Argentina. It contains more than 95% of the granitic pegmatites of
the country, with mineral resources that have been mined during the
past 80 years, producing most of the potassium feldspar, quartz and
mica plus Be--, Li--, Ta--, Bi-- and Rb-- bearing minerals.
Of particular importance for hard rock lithium exploration are
those pegmatite districts located in San Luis and western
Córdoba.
Two parallel belts of Lithium-Caesium-Tantalum ("LCT")
pegmatites are found orientated NNE-SSW. In the western belt,
pegmatites are enriched with Sn, whereas in the eastern belt
pegmatites are Nb-Ta rich. The Sn-enriched pegmatite bodies were
exploited for cassiterite during the 1940's. The lithium
mineralisation is predominantly represented by spodumene with minor
amblygonite and lepidolite.
Future Work Program
We are looking to evaluate and define the most prospective
targets across the six areas. Initially, this will focus on
geological mapping, mineralogical studies of exposed pegmatites and
the mapping and any newly identified historical workings. We
anticipate we will be able to start this in Q1 of 2018.
This will be followed by an extensive sampling programme to
identify any potential mineralisation, after which we can develop a
drill programme with a target of identifying a JORC code compliant
economic resource.
Argentine Background
Since 2015, reformist economic and political policies have
placed Argentina back on the radar as a favourable investment
destination: the economic landscape is improving while inflation is
being tamed. Further, a US free trade deal has been negotiated,
while debt issues are mostly resolved, and exchange controls
eliminated, which has seen credit ratings improve.
For the mining sector, the government has eliminated export
taxes on metals and allowed foreign-owned mining groups to
repatriate profits overseas. More recently, the government signed a
mining deal with 20 provincial governors to harmonise taxes and
regulations to attract mining investment away from Chile and
Peru.
Argentina is a growing lithium producer, and since 2015
Argentina has received more investment than any other country in
the 'lithium triangle'. It is currently the world's third-largest
producer, with at least five new projects slated to come into
production over the coming years.
Details of the Assets
Lithium Technologies Pty Ltd and Lithium Supplies Pty Ltd each
own 100% of Argo Mining S.A ("Argo") and Mining and Metals (S.A)
("MinMet") respectively. On grant of the exploration permits, Argo
and MinMet will become the titleholders of the exploration permits.
Further details of exploration permits are outlined below.
Assets Titleholder Interest Licence area (hectares)
---------- ------------- --------- ------------------------
Carpa MinMet 100% 9,948
---------- ------------- --------- ------------------------
Chutunsa MinMet 100% 9,943
---------- ------------- --------- ------------------------
Conejo Argo 100% 8,913
---------- ------------- --------- ------------------------
Lagu MinMet 100% 8,910
---------- ------------- --------- ------------------------
Lulu Argo 100% 9,810
---------- ------------- --------- ------------------------
Martin MinMet 100% 8,249
---------- ------------- --------- ------------------------
Details of the Transactions
Cadence can acquire 100% of the interest in the exploration
permits and will initially earn 49% via staged investments of cash
spent on exploration and development and the issue of new ordinary
shares in Cadence to The Vendors. Ninety percent of the cash
investment and all of the share consideration is contingent on the
grant to the titleholders of the exploration permits. Cadence also
has a one-year option to acquire the remaining 51% of the interest
in the exploration permits. Key details of transactions are
contained in the table below.
Stage Ownership Total Lithium Lithium Purpose
% Ownership Technologies Supplies
% Pty Ltd Pty Ltd
------- ---------- ----------- -------------- ------------ -------------------------------
Earn-in early non-invasive
Stage GBP0.05 GBP0.05 exploration (pre -exploration
1 4% 4% M M permits being granted)
------- ---------- ----------- -------------- ------------ -------------------------------
On grant of exploration
permits - acquisition
95,153,846 57,692,308 of Lithium Technologies
Stage shares shares and Lithium Supplies
2 20% 24% in Cadence in Cadence shares
------- ---------- ----------- -------------- ------------ -------------------------------
Earn - in on commencement
of exploration works
Stage GBP0.15 GBP0.15 after grant exploration
3 7.5% 31.5% M M permits
------- ---------- ----------- -------------- ------------ -------------------------------
Stage GBP0.35 Earn - In on identification
4 17.5% 49% M GBP0.35M of suitable drill targets
------- ---------- ----------- -------------- ------------ -------------------------------
1-year option to acquire
all the outstanding
480,769,231 192,307,692 share capital of Lithium
Stage shares shares Technologies and Lithium
5 51% 100% in Cadence in Cadence Supplies
------- ---------- ----------- -------------- ------------ -------------------------------
The vendors will retain a 1.5% net smelter royalty on products
produced from the assets. The royalty will be deferred and only
become payable upon the repayment of the capital and any debt
associated with establishing a mineral processing facility.
Lithium Technologies Pty Ltd and Lithium Supplies Pty Ltd
reported a loss of A$ 31,950 and A$ 4,680 respectively for the
5-month period ending 30 November 2017.
- Ends -
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 Sinclair-Ford
Hannam & Partners LLP (Joint
Broker) +44 (0) 207 907 8500
Neil Passmore
Giles Fitzpatrick
Square1 Consulting +44 (0) 207 929 5599
David Bick
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) from CASS Business School.
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 GBP25 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.
Technical Glossary
The following is a summary of technical terms:
"amblygonite" is a fluorophosphate mineral, composed
of lithium, sodium, aluminium, phosphate,
fluoride and hydroxide. The mineral occurs
in pegmatite deposits and is easily mistaken
for albite and other feldspars. Its density,
cleavage and flame test for lithium are
diagnostic. Geologic occurrence is in
granite pegmatites and high-temperature
tin veins. Amblygonite occurs with spodumene,
apatite, lepidolite, tourmaline, and other
lithium-bearing minerals in pegmatite
veins. It contains about 10% lithium,
and has been utilized as a source of lithium.
"beryl" is a well-known mineral varieties of beryl
include emerald and aquamarine. Naturally
occurring, hexagonal crystals of beryl
can be up to several meters in size.
"columbite" is a black mineral group that is an ore
of niobium. It has a submetallic lustre
and a high density.
"deposit" a coherent geological body such as a mineralised
body
"exploration" the method by which ore deposits are evaluated
"exploration Under the Argentine legislation, The holder
permit" of this right can explore an area during
the period granted. In case of discovering
mineral evidence, the holder has an exclusive
right to apply for an exploitation concession.
The only way to acquire an exploration
permit is through an application to the
proper mining authority to explore an
area which is free of other mining tenements.
"geological A geological map is a graphical presentation
map" & "geological of geological observations and interpretations
mapping" on a horizontal plane. Making, or otherwise
acquiring, a geological map is invariably
the first step in any mineral exploration
programme, and it remains an important
control document for all subsequent stages
of exploration and mining, including drilling,
geochemistry, geophysics, geostatistics
and mine planning. They allow theories
on ore deposit controls to be applied
and lead (hopefully) to predictions being
made on the location, size, shape and
grade of potential ore bodies. They are
the essential tool to aid in developing
3-dimensional concepts about geology and
mineralisation at all scales.
"grade" relative quantity or the percentage of
ore mineral or metal content in an ore
body
"JORC Code" Joint Ore Reserve Committee Code; the
Committee is convened under the auspices
of the Australasian Institute of Mining
and Metallurgy
"LCE" the total equivalent amount of lithium
carbonate (see explanation below entitled
Explanation of Lithium Classification
and Conversion Factors)
"lepidolite" a lilac-grey or rose-coloured member of
the mica group of minerals. It is the
most abundant lithium-bearing mineral.
It is associated with other lithium-bearing
minerals like spodumene in pegmatite bodies.
It is one of the major sources of the
rare alkali metals rubidium and caesium.
Associated minerals include quartz, feldspar,
spodumene, amblygonite, columbite, cassiterite,
and beryl.
"Lithium-caesium-tantalum comprise a compositionally defined subset
pegmatites" of granitic pegmatites; they are typically
or "LCT pegmatites" enriched with lithium caesium and tantalum.
They are products of plate convergence
and mountain building episodes. Most LCT
pegmatites intruded metasedimentary rocks,
typically at relatively low pressures
and low temperatures.
"lithium" a soft, silvery-white metallic element
of the alkali group, the lightest of all
metals
"lithium carbonate" Lithium carbonate is an inorganic compound,
the lithium salt of carbonate with the
formula Li(2) CO(3) . Lithium is extracted
from primarily two sources: pegmatite
crystals and lithium salt from brine pools.
Lithium carbonate has many uses and is
the primary lithium compound that is used
in the manufacture of lithium-ion batteries.
"lithium oxide" lithium oxide or lithia is an inorganic
chemical compound. Lithium oxide is formed
along with small amounts of lithium peroxide
when lithium metal is burned in the air
and combines with oxygen. Lithium oxide
concentrate is produced from the mining
and processing of spodumene ore.
"metallurgical" describing the science concerned with
the production, purification and properties
of metals and their applications
"mica" is a group of sheet minerals that have
a layered or platy texture. Micas are
used in a variety of applications. Mica's
value is based on several of its unique
physical properties.
"Mineral Resource" a concentration or occurrence of material
of intrinsic economic interest in or on
the Earth's crust in such a form that
there are reasonable prospects for the
eventual economic extraction; the location,
quantity, grade geological characteristics
and continuity of a mineral resource are
known, estimated or interpreted from specific
geological evidence and knowledge; mineral
resources are sub-divided into Inferred,
Indicated and Measured categories
"mineralisation" process of formation and concentration
of elements and their chemical compounds
within a mass or body of rock
"pegmatite" A pegmatite is an intrusive igneous rock
composed of crystals usually larger than
2.5 cm in size. Pegmatite bodies are usually
of minor size compared to typical intrusive
rock bodies. Pegmatite body size is on
the order of magnitude of one to a few
hundred meters. Compared to typical igneous
rocks they are rather inhomogeneous and
may show zones with different mineral
assemblages. Crystal size and mineral
assemblages are usually oriented parallel
to the wall rock or even concentric for
pegmatite lenses. Pegmatites are the primary
source of lithium either as spodumene
or lepidolite.
"processing" is the science of treating crude ores
or "mineral and mineral products in order to separate
processing" the valuable minerals from the waste rock.
It is the first process that most ores
undergo after mining in order to provide
a more concentrated material for the procedures
of extractive metallurgy. The primary
operations are comminution and concentration,
but there are other important operations
in a modern mineral processing plant
"recovery" the proportion of valuable material obtained
in the processing of an ore, stated as
a percentage of the material recovered
compared with the total material present
"spodumene" is a pyroxene mineral consisting of lithium
aluminium inosilicate, and is a source
of lithium. It occurs as colourless to
yellowish, purplish, or lilac kunzite
(see below), yellowish-green or emerald-green
hiddenite, prismatic crystals, often of
great size. Spodumene is an important
source of lithium for use in ceramics,
mobile phone and automotive batteries,
medicine and as a fluxing agent. Lithium
is extracted from spodumene by fusing
in acid.
"ore" is a type of rock that contains sufficient
minerals with important elements including
metals that can be economically extracted
from the rock. The ores are extracted
from the earth through mining; they are
then refined to extract the valuable element,
or elements.
"tantalite" is the primary source of the chemical
element tantalum. It is chemically similar
to columbite, and the two are often grouped
together as a semi-singular mineral called
coltan or "columbite-tantalite" in many
mineral guides.
Lithium Classification and Conversion Factors
Lithium grades are normally presented in percentages or parts
per million (ppm). Grades of deposits are also expressed as lithium
compounds in percentages, for example as a per cent. lithium oxide
(Li(2) O) content or per cent. lithium carbonate (Li(2) CO(3) )
content.
Lithium carbonate equivalent ("LCE") is the industry standard
terminology for, and is equivalent to, Li(2) CO(3) . Use of LCE is
to provide data comparable with industry reports and is the total
equivalent amount of lithium carbonate, assuming the lithium
content in the deposit is converted to lithium carbonate, using the
conversion rates in the table included further below to get an
equivalent Li(2) CO(3) value in per cent. Use of LCE assumes 100%
recovery and no process losses in the extraction of Li(2) CO(3)
from the deposit.
Lithium resources and reserves are usually presented in tonnes
of LCE or Li.
The standard conversion factors are set out in the table
below:
Table: Conversion Factors for Lithium Compounds and Minerals
Convert from Convert Convert Convert to Li(2) CO(3)
to Li to Li(2)
O
------------------- ------- -------- ---------- -----------------------
Lithium Li 1.000 2.153 5.323
Li(2)
Lithium Oxide O 0.464 1.000 2.473
Li(2)
Lithium Carbonate CO3 0.188 0.404 1.000
------------------- ------- -------- ---------- -----------------------
This information is provided by RNS
The company news service from the London Stock Exchange
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