TIDMKDNC
RNS Number : 0521Y
Cadence Minerals PLC
10 May 2021
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Second Iron Ore Shipment & Operational Update from the Amapa
Project
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to
provide an operational update on the Amapa, Iron Ore Project,
Brazil ("Amapa Project").
Highlights:
-- Shipping continues at pace - DEV Mineração S.A. ("DEV") has
shipped and sold the second batch of iron ore from the
stockpiles.
-- The loading of the 48,670 wet tonnes of iron ore sinter fines
(approx. 58% Fe) at Companhia Docas de Santana ("CDSA") was carried
out in record time.
-- R$7.5 million deposited into the judicial account, to be
utilised to pay ex-employees and small creditors
-- The remainder of the profit from the first shipment is being
utilised as per the Approved Court Petition
-- Key personnel have been engaged, including the head of
shipping operations and the previous general manager of mine
operations.
-- Re-instatement of operating licenses is progressing with a
focus on DEV's private port concession.
Shipping
DEV has shipped and sold the second batch of the iron ore from
the stockpiles at Santana, Amapa, Brazil. The loading of the 48,670
of the iron ore sinter fines (approx. 58% Fe) at CDSA was completed
in record time (60 hours), which bodes well for DEV's plan to
increase the frequency of shipping from CDSA over the coming
months.
DEV worked with Indo Sino Pte Ltd ("Indo Sino") and Cadence to
carry out a competitive bid process for the cargo. The buyer is one
of the world's largest globally diversified natural resource
companies and a major producer and marketer of commodities.
This shipment was approved via a court petition ("Approved Court
Petition"), details of which can be found here , allowing DEV to
export sufficient iron ore to realise a US$10 million profit.
Part Payment of Former Employees and Small Creditors
As part of the Approved Court Petition, DEV undertook that it
would pay certain outstanding claims from former employees and
small creditors from the net profit of the sale of the iron ore
stockpile.
In this regard, DEV has transferred R$7.5 million to the
judicial deposit account, representing some three-quarters of the
amounts owed. KPMG Brasil will manage the payments to these
creditors. Once fully paid, this will mark the completion of a
crucial step in the Judicial Restructuring Plan ("JRP") approved by
the creditors on 29 August 2019.The remainder of the profit from
the first shipment of Iron Ore (Sinter Fines 58% Fe) is being
utilised as per the Approved Petition.
Operations
Operations have continued to progress in regard to the
recommissioning of the Amapa Project.
Key personnel have been engaged. A new head of shipping
operations is now responsible for the efficient and safe movement
of the iron ore shipments.
In addition, DEV has engaged a former general manager of mine
operations. With over 27 years of operational and managerial
experience at various Brazilian iron ore and copper mines,
including the Amapa Project, the manager will be responsible for
day to day operations at the mine, and will oversee the
recommissioning of the asset.
As part of the process for reinstatement of critical concessions
and operational licenses, our current focus is on the reinstatement
of DEV's private port concession. In this regard, DEV, IndoSino and
Cadence have engaged with the relevant authorities, highlighting
the macroeconomics and the local and regional importance of the
Amapa Project. To date, feedback has been positive, and we will
update the market once further progress has been made.
Essential maintenance and security of the mine tailings dam
continues, with cost-effective and incremental improvements
ongoing. Having now engaged the previous general manager of mining,
we expect this process to accelerate, along with the commencement
of the plant engineering and conditioning study, which is an
outstanding part of the scoping study on the Amapa Project.
As part of providing reliable iron ore stockpile data, SGS
Brasil has been engaged to carry out a re-assay of DEV's iron ore
stockpiles. This, alongside a more accurate volumetric survey, will
allow DEV to confidently market the material, and reconcile any
variations to historic assays results.
Cadence CEO Kiran Morzaria commented, "We are pleased and proud
that the sale and shipment of the second batch of iron ore from
Amapa has completed so quickly. That the customer is once again one
of the world's largest globally diversified natural resource
companies is a clear signal that Amapa is very much back in
business, with keen demand for its product."
"On behalf of the Cadence board, our gratitude and appreciation
goes out once again to the men and women working to bring Amapa
back to life, and who have worked tirelessly to complete this
second shipment in a safe and efficient manner. "
Although in line with the Approved Petition, it is nonetheless
immensely gratifying to see a substantial amount of Amapa's
outstanding debts to former employees and creditors settled with
the shipment sale profits, marking a small step along the road to
improving prospects for employment and economic activity in the
region."
Cadence Interest in Amapa Project
In early September 2020, we announced that DEV, Indo Sino and
Cadence had agreed in principle to the settlement terms proposed by
the secured bank creditors ("Bank Creditors"). The investors and
DEV remain in constant communication with the Bank Creditors and
all parties are aligned to finalise the agreement. We have been
informed of some further delays with two of the banks (based in
India), whom are experiencing staff shortages due to the COVID-19
pandemic.
The execution of a settlement agreement with the Bank Creditors
would represent the satisfaction of Cadence's remaining major
precondition to make its initial 20% investment in the Amapa
Project. Upon completing the conditions and the release of the
Cadence escrow monies, Cadence will become a 20% shareholder in the
Amapa Project via our joint venture company, which will own 99.9%
of DEV.
After this, Cadence will invest a further US$3.5 million to
increase its stake to 27% in the Amapa project. Cadence's
investment is conditional on several material pre-conditions, which
include the grant of key operating licences.
- Ends -
For further information: Cadence Minerals plc +44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD
& Broker) +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint
Broker) +44 (0) 207 399 9400
Jon Belliss
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.
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.
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014
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