Cadence Minerals (KDNC) has raised £1.80 million to accelerate infrastructure works and optimisation studies at the Azteca operation within its Amapá Iron Ore Project in Brazil.
The fundraise comprises 40 million new shares at 4.5p each. Cadence also expects to launch a separate retail offer of up to £0.45 million at the same price for eligible existing UK shareholders.
Azteca’s initial restart programme and working capital are already funded. The new proceeds will allow the company to bring forward work on the Pedra Branca do Amapari bridge, associated roads and an additional Tailings Storage Facility, alongside studies aimed at increasing production, reducing unit costs and extending Azteca’s operating life.
About £0.65 million is expected to be allocated to the bridge, road and tailings works, while about £0.66 million will support studies into higher mass recovery and throughput, as well as drilling and metallurgical testwork on potential additional feed. About £0.825 million is intended for Cadence corporate working capital, assuming the retail offer is fully subscribed.
Commissioning of Azteca is underway, targeting production of about 380,000 tonnes a year of ~65% iron concentrate. Initial feed from stored Dyke 5 pre flotation material is estimated to support two to three years of operations.
Cadence said recent site visits had identified opportunities to assess higher mass recovery and plant throughput. Further drilling and testwork will also examine whether broader historic tailings could provide additional feed and potentially extend the operation beyond the initial material.
Cadence Minerals’ Chief Executive Officer Kiran Morzaria said: “Azteca’s restart and initial working capital are funded. Raising now allows us to bring forward the bridge works, with the objective of completing them before first shipment and reducing a known logistics risk.
“Recent site visits have identified opportunities to assess more saleable concentrate, lower unit costs and a longer operating life. Starting now allows us to establish sooner which improvements justify investment.
“The larger Amapá redevelopment is the main opportunity. Successful Azteca operations would provide an operating track record for financing discussions and cash to help advance it. Funding these works now is intended to preserve that cash for the DFS and port and rail licensing.”
Cadence holds a 36.2% indirect interest in Amapá. Azteca is intended to establish initial production ahead of the wider redevelopment, which targets 5.5 million tonnes a year of 67.5% iron direct reduction grade concentrate.
Cold and wet commissioning are underway following mechanical completion in September. Hot commissioning at 25% to 50% of plant capacity is the next milestone, while commercial operations and shipments remain subject to successful commissioning and the grant of the Azteca Operating Licence.
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The fundraise gives Cadence additional flexibility to address infrastructure requirements ahead of first shipments while investigating ways to improve Azteca’s economics and operating life. Successful commissioning and cash generation from Azteca could also help establish an operating track record and support progress towards the larger Amapá redevelopment.