Cadence Minerals has announced a major development for their investment in the Amapa iron project, which lays down a path to restarting production at the project once owned by Anglo American.
Cadence Minerals has signed a memorandum of understanding (MOU) with a Chinese engineering firm to conduct a feasibility study and potentially finance and construct the Amapa Iron Ore Project in Brazil.
The MOU is with Sinoma Tianjin Cement Industry Design & Research Institute Co., a subsidiary of Sinoma International Engineering Co. It comes after ongoing talks between Cadence’s joint venture Pedra Branca Alliance, Amapa operator DEV Mineração and Sinoma to advance the $500 million project.
Cadence Minerals shares were 63% higher at the time of writing on Monday.
Under the non-binding agreement, Sinoma will submit a proposal to complete a definitive feasibility study for rebooting the idled Amapa mine and processing facilities. If approved, the firm would then provide a fixed-price engineering, procurement and construction contract and arrange financing from Chinese institutions.
Progress on the MOU could pave the way for the construction of the former Anglo American project to resume. Cadence has invested $12.1 million to date, increasing its stake in Amapa to 32.6%.
Additional details include:
- Cadence’s Amapa investment vehicle is Pedra Branca Alliance, a joint venture with Indo Sino Pty Ltd
- Amapa operator DEV Mineração owns the project and is Cadence’s Brazilian partner
- Sinoma would act as general contractor if appointed after feasibility study
- Sinoma is discussing potential financing with SinoSure export credit agency and China Development Bank
- Parties will develop a roadmap to advance feasibility study, financing and EPC contract
The MOU marks a significant step forward in efforts to revive the Amapa iron ore mine, which has potential to produce millions of tonnes per year. Cadence and its partners will be working closely with Sinoma as the project enters this critical development phase.