Cadence Minerals (KDNC) booked a loss before taxation of £841,000 in the six months ended 30 June 2024.
The company had minimal cash at the period end, although the proceeds from a fundraising were received shortly afterwards.
Nonetheless, major progress was made in the first half of the year, following the confirmation of a robust economic model for the company’s Amapa iron ore project in Brazil in December.
This model reckoned the net present value of the project at US$1.97 billion, and estimated that the internal rate of return would be 42%.
Average free cash flow was forecast at US$342 million per year over a 15-year mine life.
Before all that, though, Cadence is preparing to generate early cashflow via a staged development pathway launched with the recommissioning of the Azteca plant.
This is targeting production of approximately 380,000 tonnes per annum of 65% iron concentrate, and requires only US$3.5 million in pre-production capex.
What’s more, funding with limited dilution has been secured - heads of terms have been signed for a US$4.6 million prepayment offtake facility with a global trading partner.
Cadence will contribute 10-15% of the prepay, and expects an internal rate of return of around 70% on its share.
View from Vox
It’s easy to make the argument that Cadence remains deeply undervalued relative to its asset base. With an equity stake of approximately 35% in a project carrying a US$1.97 billion NPV, and near-term cashflow coming from Azteca, the company has a clear path towards delivering significant further value.