Cadence Minerals (AIM:KDNC ) has announced the completion of the update of the Mineral Resource Estimate ("MRE") in respect of its investment in the Amapá Iron Ore Project Brazil.
The group reported a mineral resource of 176.7m tonnes ("Mt") grading 39.7% iron in the indicated category within an optimised pit shell and using a cut-off grade of 25% iron.
In addition, Cadence also reported a mineral Resource of 8.7 Mt at 36.9% in the inferred category, reported within an optimised pit shell and using a cut-off grade of 25% iron (Fe).
This mineral resource represents a 21% increase in total mineral resources compared to the equivalent MRE published by former owners of the project Anglo American in 2012.
The MRE will now form the basis of the mine planning studies within the scoping study, to support the operational plan to produce 4.4Mt of 65% Fe and 0.3 Mt of 62% Fe per annum. Wardell Armstrong LLP has been appointed to supervise and prepare the scoping study.
The company highlighted that ‘significant potential exists to increase the resource base after the completion of metallurgical and optimisation studies on the surficial Colluvium and Canga and the underlying Semi Compact and Compact Itabirite material types.’
CEO, Kiran Morzaria, said the MRE “significantly builds” on the group’s confidence in the economics identified during its internal desk studies and on-site due diligence at Amapá.
“The increase in overall mineral resource coupled with the historic operations and iron ore quality provides a robust platform on which to base our ongoing scoping study,” he said.
Cadence is waiting to secure a binding agreement with the secured bank creditors to complete its investment in Amapá. The group will then make a further $3.5m investment after gaining operational and environmental licenses, at which point Cadence will own 27% of Pedra Branca Alliance ("PBA"), a JV company of DEV which currently holds the project.
Cadence told investors that subject to COVID-19 travel restrictions, it expects to have the scoping study completed after executing a final settlement with the Bank Creditors.
"The excellent developments on the operational front move us ever closer to bringing Amapá back to life, and along with the updated mineral resource statement, we see the value, both in the project and also on a macro level, the potential for prosperity and employment in the Amapá region, increase exponentially,” said Non-Executive Chairman, Andrew Suckling.
“Once made, this investment will mark a historic milestone for Cadence, and as our Chairman has pointed out, it will potentially transform the prospects for employment and prosperity in the region of Amapá,” added Morzaria.
Shares in Cadence Minerals have increased by 13% over the past month to open at 11.75p this morning following the announcement.
3 Reasons to Follow Cadence Minerals:
Amapá – 30% (once final agreement with bank creditors has been completed)
Candece plans to rehabilitate Amapá, including commissioning the studies required of bank finance, shipping of the iron ore from the stockpile and the restarting of full operations.
The historic mine plan would mean that Amapá would produce at steady-state production an estimated 4.4 Mt of 65% iron and 0.9 Mt of 62% iron per annum for approximately 14 years.
Cinovec – 16%
Cadence also holds around 16% of the equity in European Metals, which, through its subsidiary, Geomet, controls the exploration licences awarded for the Czeach Cinovec Lithium Project (“Cinovec”).
Cinovec, which is the largest hard rock lithium deposit in Europe, is strategically located to produce lithium for Europe with the goal of contributing to a sustainable supply chain for a world leading centre for electric vehicle development and manufacture in Europe.
Diego Pavia, CEO of EIT InnoEnergy, said he views Cinovec as “critical” to the development of Europe's energy storage industry and in meeting the EU's climate goals of electrification of mobility and large-scale development of renewable energy storage.
Yangibana – 30%
Cadence recently unveiled ‘outstanding’ rare earth oxide grades in a report highlighting positive drilling results at the Yangibana rare earth project in Australia, exceeding the group’s expectations for its planned 20,000 metre 2020 exploration drill program.
Cadence, which owns 30% of three mining leases and six exploration licences which form part of the Yangibana Rare Earth Deposit, expects to advance the programme until 4Q 2020.
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