Cadence Minerals (KDNC) has, together with partners in the Amapa iron ore project in Brazil, signed a Heads of Terms agreement with an international shipping and trading group, which will provide most of the funding to license, refurbish, and restart the Amapa Azteca plant.
US$4.6 million will be provided to finance the restart of the Azteca plant and provide initial working capital, with Cadence to contribute approximately 10-to-15% of this, thereby earning the same economic returns on a pro-rata basis.
The internal rate of return on Cadence's share of the investment is expected to run t0 70%, with repayments made per tonne of iron ore shipped.
Once operational, the Azteca plant is forecast to be net cashflow positive from the first shipment, providing a strong financial foundation for the development of the larger 5.5 million tonne per year Direct Reduction-grade project at Amapa.
Dyke 5 tailings, containing approximately two million tonnes of high-grade material at approximately 55% iron, will provide the initial feed. On refurbishment, Azteca is expected to produce circa 380,000 tonnes per year 65% iron concentrate.
It will be low cost, at just US$79 per tonne, as against current market prices over approximately US$120.
"This agreement marks an important milestone in the staged development strategy at Amapá, providing a pathway to early cash flow through the restart of the Azteca plant,” said Kiran Morzaria, chief executive of Cadence Minerals.
“Cadence will receive a direct return on its investment as production commences, while free cash flow from Azteca will support advancement of the larger 5.5 Mtpa DR-grade project. Restarting operations also reinforces Amapá's social licence to operate and demonstrates to investors and partners that the project is once again a producing asset with near-term cash flow and long-term growth potential. This operational credibility is an essential step in unlocking the full value of Amapá while delivering tangible returns to our shareholders."
View from Vox
As of the end of June 2025, Cadence's total investment in the Amapá project is approximately US$15.5 million, representing a 35.7% equity stake in the project. It’s a sizeable chunk of what could well turn into a very substantial iron ore project. The financing of Azteca represents only the first step in what a December 2024 study showed to be a multi=billion dollar project. A phased re-start makes sense, and it’s good to see it getting underway.