Cadence Minerals Plc
("Cadence Minerals", "Cadence")
Bank Credit Committee Approval for Amapa Project Settlement Agreement.
Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to announce that it has received confirmation from the secured bank creditors that they have obtained approval from their credit committees with respect to the proposed terms of the settlement agreement ("Approval").
· Bank credit committee approval for secured bank creditors assits in paving the way for Cadence to vest initial 20% in the Amapa Iron Ore Project
· On the effective date of the settlement agreement Cadence's and Indo Sino's joint venture company will own 99.9% of the Amapa Project
· The Amapa Iron Ore Project consists of an integrated mine, processing plant, railway, and privately owned port. It was previously owned by Anglo American and produced 6.1 million tonnes of iron ore per annum, and was valued at
· The current Mineral Resource of the Amapa Project consists of 176.7 million tonnes grading 39.7% Fe in the Indicated category and 8.7Mt at 36.9% Fe in the Inferred catergory
The Approval is subject to the completion of KYC (know your client) and the finalisation of the documentation reflecting the agreement in principle as announced on the 2 September 2020). The Approval assists in paving the way for Cadence to vest its initial 20% indirect interest in Amapa Iron Project ("The Amapa Project"). The Amapa Project consists of an integrated mine, processing plant, railway, and privately owned port. It was previously owned by Anglo American and produced 6.1 million tonnes of iron ore per annum, and was valued by Anglo American at
While awaiting credit committee approval, the drafting of the final settlement documents have continued to progress. On the effective date of the Settlement Agreement and under the Judicial Restructuring Plan ("JRP") Cadence and Indo Sino Trade Pte Ltd (Indo Sino), via their joint venture company, will own 99.9% of DEV Mineração S.A., the owner of the Amapa Project.
Cadence Non-Executive Chairman, Andrew Suckling, commented; "As I have said previously, in my time working with commodity projects around the world, I have rarely if ever seen a lapsed mining project with this sort of potential. Today's announcement is a landmark for Amapa, both in terms of certainty for DEV employees, the wider Amapa community and for Cadence shareholders. I know how hard the team on the ground there have worked to make this happen, and on behalf of our board I would like to express our thanks and gratitude to DEV, the Government of Amapa, the team of local Government officers and bank committees and administrators for contributing to this momentous step in our history."
"In its previous life,
Cadence CEO, Kiran Morzaria, commented: "After a long and protracted process, I am delighted to be able to announce to you that we have now received Credit Committee Approval for the secured bank creditors to execute the Settlement Agreement. Cadence can then vest its initial 20% and eventually a further 7%, which in practical terms means we have a clear path and process to get
"On my arrival at
About the Amapa Project
The Amapa Project commenced operations in December 2007 with the first production of iron ore concentrate product of 712 kt in 2008. In 2008 Anglo American (70%) and Cliffs (30%) acquired the Amapa Project in 2008 as part of a larger package of mining assets in
Cadence updated the Mineral Resource Estimate on 2 November 2020. Increasing the MRE by 21%. The current MRE contains an Mineral Resource 176.7 million tonnes grading 39.7% Fe in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.
Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012. During this period, Anglo American reported operating profits from their 70% ownership in the Amapa Project of
Before its sale in 2012, Anglo American valued its 70% stake in Amapa Project at
DEV filed for judicial protection in August 2015 in
Details of the Joint Venture Agreement
The agreement with our joint venture partner, Indo Sino, is to invest in and acquire up to a 27% of a joint venture company Pedra Branca Alliance Pte. Ltd. ("JV Co"). On Completion and registration of the Settlement Agreement the equity of DEV Mineração S.A. ("DEV") will be transferred to the JV Co, at which point it will own 99.9% of the Amapa Project. Should Indo Sino seek further investors or an investment in the JV Co the agreement also provides Cadence with a first right of refusal to increase its stake to 49% in the JV Co.
To acquire its 27% interest Cadence will invest
Cadence's investment is conditional on several material preconditions, which include the grant of key operating licences and the release of bank securities over the asset. On completion of Cadence's investment (not including the first right of refusal), our joint venture partner Indo Sino will own 73% of JV Co. The Agreement also contains security and default clauses which if triggered causes an upwards adjustment mechanism to allow Cadence to either receive cash from JV Co or receive additional shares in JV Co. In the latter case, Cadence's shareholding in the JV Co will not go above 49.9%.
On completion of the
- Ends -
For further information:
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.
Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identiﬁed 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 Cadence Minerals Plc'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 reﬂect 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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.
 Anglo American, Annual Report 2012, page 89, https://www.angloamerican.com/~/media/Files/A/Anglo-American-Group/PLC/investors/annual-reporting/2013/annual-report2012.pdf
 Anglo American, Annual Report 2012, page 183, https://www.angloamerican.com/~/media/Files/A/Anglo-American-Group/PLC/investors/annual-reporting/2013/annual-report2012.pdf