Cadence Minerals steady increase in project value

Cadence Minerals plc (LON:KDNC) has updated shareholders on the progress of its principal investments.

Highlights:

·      Completion of Amapa Ore Reserve Estimate supports planned 15-year mine life

·      Cadence increases Amapa stake to 30% through conversion of loans, capitalisation of management, consultancy, admin and cash investment. No additional capital raising required.

·      European Metals Holdings (“EMH”) reports significant developments with the Cinovec Lithium Chemical Plant (“LCP”) extraction process, which is expected to is expected to reduce both Capex and Opex in the LCP by 10-20%.

·      Following the sale of stakes in Lithium Technologies and Lithium Supplies (“LT & LS”), Evergreen Lithium Pty Ltd is progressing with its listing on the Australian Stock Exchange.

·      Following the sale in working interests in the Yangibana Rare Earths project (“Yangibana”) tenements to Hastings Technology Metals (ASX: HAS), we expect various regulatory approvals to be completed by the end of the year.

Cadence Minerals CEO, Kiran Morzaria, commented: “I am delighted to report that we have taken several significant steps forward with our flagship Amapa project. The decision to convert loans and other costs into an increased stake in Amapa was almost a formality following successful completion of the ORE and the consequential progress with the PFS. With the steady increase in project value, your board are genuinely excited at the development prospects of Amapa.”

I look forward to reporting further progress across all our projects in the coming months.”

Amapa Iron Ore Project (“Amapa” or the “Project”)

Cadence announced in early October the completion of an upgraded and increased Mineral Resource Estimate (“MRE”). The Measured and Indicated portion of this MRE has been used to calculate the Ore Reserve Estimate (“ORE”). The ORE represents the economically mineable part of a Measured and Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by our Pre-Feasibility Study (“PFS”).

We are happy to report that the ORE has been completed, and the results support the planned 15-year mine life. The JORC 2012 compliant statement and supporting disclosures will form part of the PFS publication, which is still scheduled for publication this quarter.

Given the excellent progress at Amapa and the economics of the asset, Cadence intends to increase its stake from 27% to 30% while still retaining its previously announced first right of refusal to acquire 49% of the asset.

Cadence will earn this additional three per cent via the conversion of loans that the Company has made to the Project, the capitalisation of management, consultancy and other admin cost and further cash investment in the Project. The total value of these three items is approximately US$3.3 million. Cadence requires no additional capital raising to increase its stake

Once complete, Cadence will have acquired 30% of Amapa for approximately US$9.3 million. Anglo-American valued its 70% stake in Amapa at US$ 462 million (100% US$ 660 million).

European Metals Holdings (“EMH”)

EMH has announced significant developments in the processing flowsheet for the Cinovec vertically integrated battery metals project (“Cinovec”) in the Czech Republic.

Highlights

•     The simplified Lithium Chemical Plant (“LCP”) extraction process has delivered exceptionally clean battery-grade lithium carbonate

•     LCP has the capability to deliver very high-purity lithium hydroxide, lithium carbonate, lithium sulphate or lithium phosphate

•     The simplified process is expected to reduce both Capex and Opex in the LCP by 10-20%.

•     LCP recoveries of 88-93% lithium proven in locked-cycle testwork, an outright recovery improvement of 3-6% over locked-cycle testwork for earlier, more complex flowsheet

•    LCP pilot programme to commence in 4Q CY22 with marketing samples available to offtake partners in 1Q CY23; pregnant leach solution containing 48kg of lithium carbonate equivalent is ready to be processed

Other Investments

In July 2022, Cadence sold its 31.5% stake in Lithium Technologies and Lithium Supplies (“LT & LS”) to Evergreen Lithium Pty Ltd (“Evergreen”). This was for an initial consideration of AS$3.16 million (£1.81 million)in Evergreen shares, with a further AS$6.63 million (£3.80 million) due in Evergreen equity on the achievement of certain performance milestones Evergreen is progressing with its listing on the Australian Stock Exchange. We anticipate that this will be completed by the end of this year.

In June 2022, Cadence entered into a binding agreement to sell its working interests in the Yangibana Rare Earths project (“Yangibana”) tenements to Hastings Technology Metals (ASX: HAS) (“Hastings”) for A$9 million (£5.1 million) to be satisfied by the issue of fully paid ordinary Hastings shares. Cadence’s 30% interest in tenements covers a small portion of Yangibana and potentially represents one year of the 16-year mine life. Cadence and Hastings are awaiting various regulatory approvals, and we anticipate that this will be completed by the end of the year.

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