Cadence Minerals plc (LON:KDNC) has provide an update on its investment in the Amapa Iron Ore Project, Brazil.
Settlement of Bank Creditors
In early September 2020, we announced that DEV Mineração S.A’s (“DEV”), Cadence and Indo Sino Pty Ltd agreed in principle to the settlement terms proposed by the secured bank creditors. Detailed discussions and drafting of the legal documents continue, and we look forward to updating the market once binding documents are executed.
The execution of a settlement agreement with the Bank Creditors would represent the satisfaction of Cadence’s remaining major precondition to make its initial 20% investment in the Amapa Project. On completion of the conditions and the release of the Cadence escrow monies, Cadence will become a 20% shareholder in the Amapá Project via our joint venture company, which will own 99.9% of DEV.
Update on Court Petition to Commence Iron Ore Shipments
In April 2020 Commercial Court of São Paulo ruled that DEV., owner of the Amapa Project could commence the shipment of the iron ore stockpiles situated at DEV’s wholly owned port in Santana, Amapa, Brazil.
After this and as announced in August and September 2020, the Bank Creditors filed and had an interim order approved by the State of São Paulo Upper Court. Yesterday the Upper Court rejected the Bank Creditors appeal, and once the Ruling is effective (up to one week from the date of publication), the interim order is annulled, and DEV’s original petition is valid. This will allow the recommencement of port operations and the shipment of iron ore stockpiles.
Details of Approved DEV Court Petition
DEV is permitted to export sufficient iron ore to realise a US$10 million profit from the Amapa stockpiles at the port (after the deductions of all logistical, regulatory, shipping and sale costs).
The first portion of the net revenues shall be used to pay historic small and employee creditors (~US$2.5 million) after which approximately US$ 6 million of the net revenues will be used to begin recommissioning studies on the Amapa Project and to start maintenance and monitoring of the current tailing dam facilities. The remaining net revenues with be used to provide working capital for the operations and for a payment against the outstanding amount due to the Bank Creditors.
Further announcements will be made concerning both the Settlement Agreement and the outcomes from the Ruling once available.