Reinstatement of Railway Concessions at Amapá

RNS Number : 1248W

Cadence Minerals PLC

09 December 2019

 

Cadence Minerals Plc

("Cadence Minerals", "Cadence" or "the Company")

Reinstatement of Critical Railway Concessions at the Amapá Iron Ore Project, Brazil.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that, following the approval of the judicial restructuring plan ("JRP") announced on August 30^th 2019, along with its partners it has agreed with the State of Amapá the reinstatement of a life of mine railway concession ("Concessions")  between the Amapá iron ore mine and the port in Santana, State of Amapá, Brazil.

 

The Amapá Project

The Amapá Project was owned by Anglo American plc and Cliffs Natural Resources and consists of a large-scale iron ore mine, beneficiation plant, railway and private port. Before its sale in 2012, Anglo American valued its 70% stake at US $462m in its 2012 Annual Report (100% US $600m). The Amapá Project is 100% owned by DEV Mineração S.A. ("DEV").

 

Details of Railway Concession

The reinstatement of the Concessions were agreed between Cadence, Indo Sino Pte. Ltd. ("Indo Sino"), and the government of Amapá, including the state secretary of transport, state secretary of planning, state secretary of the environment, attorney generals office and the office of the Governor of Amapá.

The Concessions are in force for the life of the mine and allows DEV's 100% owned subsidiary to operate the railway, for the primary purpose of the transport of iron ore over 180 km from the mine to the it's port in Santana. The railway will be maintained and improved to an initial capacity of approximately 5.5 million tonnes of iron ore per annum and will provide a passenger and good service. The Concessions also allows DEV to expand the capacity of the railway to transport other goods, should there be commercial demand.

 

Satisfaction of Precondition

The reinstatement of the Concessions represents the satisfaction of one of the two principal preconditions for Cadence's investment in the Amapá Project and the release of US$2.5 million currently held in escrow in a judicial trust account ("Escrow Monies").

The second precondition is for us to reach a settlement agreement with the bank creditors in regards to the secured bank lending. Along with our partners, we continue to negotiate with the banks.

On satisfaction of the preconditions and the release of the Escrow monies Cadence will own 20% of the Amapá Project via our joint venture company which will own 99.9% of DEV. The Escorw Monies will be used for the payment of former employees and small trade creditors.On the release of the monies, the Government of Amapá will permit DEV to start operations including those at the port.

Cadence Non-Executive Chairman Andrew Suckling commented; "To echo my previous comments, in my time working with commodity projects around the world, I have rarely if ever seen a lapsed mining project with this sort of potential. The reinstatement of the life of mine railway concession is the first key step toward rehabilitation of the Amapá Project, and I speak for our board and investors when I say that we expect this to be a Company changing event. Cadence and Indo Sino, along with the Government of Amapá have worked tirelessly to conclude this key step, and we are grateful for all they have achieved."

"In its previous life, Amapá's output contributed significantly to the regional economy. It is important to consider the employment opportunities and funding for infrastructure, education and health that a rehabilitated mine will bring to this part of Brazil."

Cadence CEO Kiran Morzaria commented; "Since the approval of the JRP in August, we have worked with Indo Sino and the Government of Amapá to secure this first key step to bring Amapá back into production. Now we have secured the Railway concessions, once agreement has been reached with the secured bank creditors we can commence operations at the mine, railway and port. I look forward to providing our board and investors with further progress updates."

- Ends -

For further information:

Cadence Minerals plc	[phone]
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)	[phone]
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)	[phone]
Jon Belliss

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ''believe'' ''could'' "should" ''envisage'' ''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

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