Presenting at the UK Investor Magazine Metals & Mining Conference, Cadence Minerals detailed their strategy of investing in assets that are under-priced but have strategic advantages, which CEO Kiran Morzaria calls “de-risked” assets.
The AIM-listed company added that it invested in long-term partners which boast strong financial returns, and that the investee producer has based itself the correct commodity space, such as iron ore and lithium with demand estimated to keep rising in the coming years.
Cadence Minerals investments are currently in unlisted assets including a 20% stake in the Amapa Iron Ore project, scheduled to hit 27%, 30% stake in the Sonora Lithium project, Synergy Prospecting 31%, and 30% of the Yangibana Rare Earths project.
Cadence has a 8.2% equity stake in listed European Metals Holdings.
Amapa Iron Ore
Cadence Mineral’s flagship project is the Amapa Iron Ore which is expected hit 5.3 million tonnes of iron ore per year at full capacity. The asset was previously owned by Anglo-American and generated $171 million of profit during the period they operated the mine from 2007-2012.
Cadence has a 20% stake in Amapa which is set to rise to 27% for a total investment of $6 million. Cadence has a first right of refusal to increase their stake to 40%.
Feasibility studies are ongoing and the market will learn of updates in 2022.
Cadence Minerals added that maintenance and repair is currently ongoing for the Amapa mine, and they will continue post-finance talk to reconstruction and recommissioning until an estimated date of 2024.
The company said in terms of its creditors that it is looking for shipment of stockpiles to pay secure bank creditors, and hoping to lock-in long-term shipping contracts.
Cadence Minerals estimated that the GDP impact at state level for Ampara Iron Ore will hit approximately 4%.
Lithium and Rare Earths
Cadence has a portfolio of Lithium assets which are targeting the demand from electric and hybrid vehicles.
Cadence holds a 8.2% in UK-listed European Metals Holdings which owns the Cinovec Lithium mine in the Czech Republic and is well placed to serve the demands of European EV manufacturing.
Following an ‘outstanding’ PFS, Cinovec now has a NPV of $1.94 billion and a Total JORC resource of 7.39 Mt LCE.
Cadence is a 30% joint partner on the Sonora Lithium Project that has an NPV of $802 million. Cadence Minerals’ joint-venture Partner Ganfeng Lithium is ranked as the third-largest lithium compound producer globally.
Synergy Prospecting in Lithium Exploration is a speculative asset for the company, with some initial surface sampling complete. The company will announce its further steps following the results of its initial exploration.
Cadence Minerals has exposure to Rare Earth through the Yangibana Rare Earths project in Western Australia. The Yangibana Project holds a net value of $1.01 billion, and Cadence Minerals said the mine is expected to produce 1.7 million tonnes of ore in the latter end of the mine cycle.
