TIDMKDNC
RNS Number : 7969U
Cadence Minerals PLC
16 July 2018
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Bacanora Lithium (BCN) Announces Strategic Investments of US$90m
And A Proposed Placing to Raise US$100m.
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note
the strategic investments announced today by Bacanora Lithium
(AIM:BCN). Conditional strategic investments have been agreed with
the State General Reserve Fund of Oman ("SGRF"), the sovereign
wealth fund of the Sultanate of Oman and from Bacanora's off-take
partner, Hanwa Co., LTD ("Hanwa"), for a combined total of US$90m
('the Investments'). The Investments comprise US$65m from SGRF and
US$25m from Hanwa and are part of the proposed funding package for
the development of an initial 17,500 tpa lithium carbonate
("Li2CO3") operation at the Sonora Lithium Project in Mexico
("Sonora" or the "Project") and are conditional on the full US$460m
construction funding required for the Project ("Construction
Funding") being in place. These investments follow on from the
US$150m senior debt facility previously secured with Red Kite Mine
Finance, one of the leading specialist mining lenders.
Highlights:
-- SGRF's commitment to conditionally invest US$65m upon
completion will further validate Sonora's potential to become a
leading supplier of high value lithium products to fast-growing
industries, such as electric vehicles and energy storage, and once
completed will significantly strengthen Bacanora's funding platform
for the construction of a 17,500tpa Li2CO3 operation
-- Hanwa's stated intention to conditionally invest US$25m upon
completion will further validate the quality of battery grade
(+99.5%) Li2CO3 produced at Sonora and upon completion will secure
access to the Japanese market
-- The Investments follow the US$150m senior debt facility
secured with RK Mine Finance, one of the leading specialist mining
lenders - see announcement of 4 July 2018
-- Upon completion the Investments will bring the combined
equity and debt funding commitments secured to date to US$240m -
52% of the US$460m required for Stage 1 production of 17,500 tpa of
Li2CO3 at Sonora, comprising US$420m capital costs and US$40m for
working capital
-- SGRF's commitment is alongside an off-take agreement which,
upon completion of the investment will provide SGRF with the option
to buy 10,000 tpa of Li2CO3 once capacity at Sonora is expanded to
35,000 tpa of Li2CO3 as part of Stage 2 of the Project
-- The Conditional Strategic Investments follow the favourable
Feasibility Study which assigned a pre-tax US$1.253 billion NPV8 to
a 35,000 tpa battery grade Li2CO3 operation at Sonora; a pre-tax
Internal Rate of Return of 26.2%; and Life of Mine operating costs
of US$3,910/t of Li2CO3.
The full strategic investment release can be found at:
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/13719306.html
Cadence Minerals also notes that Bacanora Lithium has announced
a proposed placing to raise gross proceeds of US$100m by way of a
placing (the "Placing") of new ordinary shares in the Company (the
"Placing Shares"). The combination of the Placing proceeds and the
initial US$25m drawdown from the previously announced US$150m Red
Kite Mine Finance senior debt facility ("RK Facility") will give
the Company sufficient funds to begin construction on the Project,
the intended commissioning for which is in Q1 2020.
Placing Summary:
-- The primary purpose of the Placing is to provide Bacanora
with sufficient funds to begin construction of the Project by
ordering the long lead items and beginning the required civil
works.
-- The gross proceeds from the Placing will allow the Company to
continue towards its stated intention of commissioning the Project
during Q1 2020.
-- The issue of the Placing Shares is structured as a placing of
new ordinary shares pursuant to the authorities granted at the
Company's General Meeting held on 16 February 2018.
-- The timing of the closing of the Bookbuild and the final
number and allocation of the Placing Shares to be issued are to be
determined at the discretion of the Company and the Bookrunner.
-- Following the closing of the Bookbuild, a further
announcement will be made confirming final details of the
Placing.
Bacanora is a lithium exploration and development company.
Cadence holds approximately 8% of Bacanora's equity and 30% of
Mexalit and Megalit joint venture companies. Mexalit is the owner
of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral
concessions, which forms part of the 20-year mine plan of the
Sonora Lithium Project in Northern Mexico.
The full placing release can be found at:
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/13719307.html
Cadence Minerals CEO Kiran Morzaria commented: "Following on
from last week's senior debt funding package announcement, today
sees Bacanora take two additional and hugely significant steps
towards the start of the construction phase of the Sonora Lithium
project in Q3 2018."
"Securing additional backing from existing strategic partner
Hanwa and new funding from a blue chip investor of the calibre of
SGRF further underscores the quality and longevity of the Sonora
Lithium project. Along with the $100m placing, Bacanora looks set
to complete its funding package by early 2019. On behalf of myself
and Cadence Minerals, we congratulate Peter Secker and his team for
achieving this milestone today"
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
- Ends -
For further information:
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
Ingo Hofmaier
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 GBP20 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.
Forward-Looking Statements:
Certain statements in this announcement are or may be deemed to
be forward-looking statements. Forward-looking statements are
identi ed by their use of terms and phrases such as "believe"
"could" "should" "envisage" "estimate" "intend" "may" "plan" "will"
or the negative of those variations or comparable expressions
including references to assumptions. These forward-looking
statements are not based on historical facts but rather on the
Directors' current expectations and assumptions regarding the
Company's future growth results of operations performance future
capital and other expenditures (including the amount. nature and
sources of funding thereof) competitive advantages business
prospects and opportunities. Such forward-looking statements re ect
the Directors' current beliefs and assumptions and are based on
information currently available to the Directors. Many factors
could cause actual results to differ materially from the results
discussed in the forward-looking statements including risks
associated with vulnerability to general economic and business
conditions competition environmental and other regulatory changes
actions by governmental authorities the availability of capital
markets reliance on key personnel uninsured and underinsured losses
and other factors many of which are beyond the control of the
Company. Although any forward-looking statements contained in this
announcement are based upon what the Directors believe to be
reasonable assumptions. The Company cannot assure investors that
actual results will be consistent with such forward-looking
statements.
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END
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