Zeus Capital lifted its fair value on Cadence Minerals (KDNC ) to 21.8p from 18.9p after the company identified substantial cost savings at the Amapá iron ore project in Brazil.
The broker said contractor quotes point to a roughly 36.7% reduction in estimated mining costs to $11.20 per tonne, with Free on Board (FOB) costs down about 19% to $27.30 per tonne. It estimates this lowers operating costs by around $33.3 million per year and by roughly $500 million over the life of mine, strengthening Amapá’s position on the global cost curve.
Running the new inputs through its discounted cash flow model, Zeus increased Amapá’s net present value from $925 million to $1,157 million. After assuming a 35.1% economic interest and a 20% risk factor, the Amapá stake contributes about 19.1p per share to Cadence. Other valuation lines, including the Ganfeng joint venture, listed holdings, net cash and corporate costs, were left broadly unchanged. The share count was updated to approximately 328 million.
“This is an encouraging update – the revised figures push Amapá further down the global cost curve and enhance the project’s investment proposition,” Zeus said, maintaining a fair value estimate of 21.8p per share for Cadence.