Cadence Minerals shares jump on improved Brazilian iron ore mine economics
Cadence Minerals shares soared on Tuesday after the company announced positive results from an updated Pre-Feasibility Study for its Amapá Iron Ore Project in northern Brazil, where it holds a 34.6% equity stake.
The study, incorporating a Direct Reduction grade flow sheet, reveals a substantial increase in the project’s post-tax Net Present Value (NPV10%) to US$1.97 billion, with an internal rate of return of 56%.
Cadence Minerals shares jumped over 20% in early trade on Tuesday as investors cheered the improved outlook for the company’s flagship asset.
The project is estimated to generate average annual free cash flow estimated at US$342 million from start-up through to closure.
Over its 15-year mine life, the Amapá Project is expected to deliver US$9 billion in gross revenues, US$4.9 billion in net operating profit, and US$4.6 billion in free cash flow.
The processing plant has been redesigned to produce high-grade iron ore concentrate at 67.5% Fe, with an average production rate of 5.5 million metric tonnes per annum.
The project demonstrates strong cost efficiency, with Free on Board C1 Cash Costs of US$33.7 per dry metric tonne at the port of Santana, and Cost and Freight C1 Cash Costs of US$61.9 per dry metric tonne in China.
The pre-production capital requirement is set at US$377 million, with an attractive payback period of just three years, shortened by the increased free cash flows.
“This significant update to the Amapá Prefeasibility Study, which includes the DR-grade concentrate flow sheet, reinforces our firm belief that the project can add substantial value to Cadence. The increased net present value of $1.97 billion and improved post-tax internal rate of return reflect significant advancements in the project’s robust economics,” said Cadence CEO Kiran Morzaria.
“The Amapá Project represents a well-developed and largely de-risked opportunity, featuring established mineral reserves, advanced environmental permitting, and complete control of integrated rail and port infrastructure. This ownership and control of the infrastructure contribute to the project’s low-cost base and will enable the pursuit of regional expansion opportunities, with substantial resources located within 30 kilometres of the existing rail line. In addition to the DR-grade flow sheet, the project will use 100% renewable energy sources. We anticipate this will help us achieve one of the lowest carbon footprints in the region while still delivering a robust and highly profitable project.”
AIM movers: K3 Business sells main subsidiary and Capital Metals reduces capex
K3 Business Technology (LON: KBT) is selling its UK SYSPRO business NexSys to SYSPRO owner Advent for £36m. This business generated 109% of group EBITDA and 28% of group revenues. K3 Business Technology intends to return cash to shareholders. The company’s remaining operations are K3 Fashion and Pebblestone, the IKEA software business and other retail software. The share price is two-fifths higher at 87.5p.
Capital Metals (LON: CMET) has reduced the stage one capex for the Eastern Minerals project in Sri Lanka by one-third of $20.9m. Initial production of heavy mineral concentrate is 125,000tpa. Funding and offtake discussions are continuing. Drilling is restarting, so that the resource can be increased. The share price jumped 31.3% to 2.1p.
Condor Gold (LON: CNR), which is developing the La India gold project in Nicaragua, says that Metals Exploration (LON: MTL) and have made bid approaches and negotiations are at an advanced stage with Metals Exploration. Calibre Mining Corp says it will not make an offer. Metals Exploration has entered into a £5.5m bridging loan facility with Drachs Investments No. 3, which has a 18.4% shareholding. This is repayable at the end of January or when talks end. Galloway is lending £475,000 to Condor Gold. Metals Exploration owns the Runruno gold project in the northern Philippines. Condor Gold shares increased 22.9% to 29.5p. Metals Exploration shares have fallen 6.14% to 5.35p.
Energy optimisation service provider Inspired (LON: INSE) has won three large optimisation contracts with two starting in 2025. These contracts came later than expected and Panmure Liberum has knocked £5m off its pre-tax profit expectations and reduced earnings by 29% to 9.2p/share. Net debt is forecast at £58m at the end of 2024. Covenants have been changed and this should ensure there is no breach following the decline in expected profit. The share price recovered 20.3% to 41.5p.
FALLERS
Goldstone Resources (LON: GRL) is in talks with Blue Gold International concerning an extension for the repayment of the £2.7m owed through convertible loan notes. It was due to be repaid at the end of November and Goldstone Resources has five business days to negotiate the extension or it will be obliged to repay the loan notes. The share price dived 27% to 1.15p.
Bigblu Broadband (LON: BBB) is selling Australian broadband business to SKM Telecommunications for up to £25.7m, which values the business at more than double the total cost of investment. The initial cash payment is £15.4m and £6.8m in shares in SKM, with a further £3.5m in cash due in one year. This requires shareholder approval at a general meeting on 20 December. The company will still have operations in New Zealand and a subsidiary involved in the distribution of Starlink, plus a 2.8% stake in Quickline. Revenues are forecast to be £1m in 2024-25. The share price lost some of its recent gains and is 14.6% lower at 35p.
Braveheart Investment (LON: BRH) chief executive Trevor Brown bought 425,000 shares at 4.0388p each, taking his stake to 25.5%. The share price declined 5.56% to 4.25p.
Africa-focused Shuka Minerals (LON: SKA) is being loaned £500,000 by its second largest shareholder Gathoni Muchai Investments. The initial advance is £150,000. Shuka Minerals is planning to appoint new directors. The share price slipped 3.33% to 7.25p.
FTSE 100: mining strength overcomes weakness in housebuilders
An encouraging insight into China’s manufacturing sector helped lift the FTSE 100 on Monday, overcoming weakness in housebuilding shares after several downgrades in the sector.
London’s leading index was 0.3% higher at 8,315 at the time of writing as it broke through the 8,300 level convincingly for the first time since late October. Should 8,300 hold as support, traders may eye the next major resistance level around 8,400.
“Beijing’s economic stimulus effort seems to be having a positive effect, judging by better-than-expected manufacturing data from China,” says Dan Coatsworth, investment analyst at AJ Bell.
“The Caixin Manufacturing PMI data hit 51.5 in November against a forecast of 50.7%. The data sent Chinese shares flying, including a 1.1% rise in the Shanghai SEE Composite index. The big unknown is whether the stimulus efforts will have a long-lasting effect or just a short-term boost.
“The Chinese manufacturing data also needs to be viewed in the context of what’s happening in the US. The threat of punishing tariffs on Chinese goods imported into the US from January 2025 once Donald Trump returns to power is likely to have spurred factories to boost output ahead of the event. The theory being that some US customers might stockpile goods while they can buy cheaply before the threatened tariffs come into power.”
A positive session for mining names such as Rio Tinto and Anglo American – both up around 1% – was dampened by softness in the domestic-facing housebuilding sector after a string of broker downgrades hit Vistry, Persimmon and Taylor Wimpey despite Nationwide’s very encouraging house price data for November.
Average UK house prices rose 1.2% in November as first-time buyers scrambled to beat the changes to stamp duty due to be implemented in April 2025. House prices rose 3.7% in the year to November, the fastest annual growth rate in over two years.
However, the promising house price data was not enough to offset the impact of several broker downgrades, including RBC’s slashing of Persimmon’s price target to 1,275p. Vistry looks set to exit the FTSE 100 after RBC’s downgrade, which sent shares down by 4% and put the social housing-focused builder firmly in demotion territory.
UK house prices surge at fastest rate in two years
UK house prices rose at the fastest rate in two years in November, according to new data from Nationwide, as buyers raced to beat the changes in stamp duty set for 2025.
House prices rose 1.2% in the month to November and were 3.7% higher over the year.
“The Budget blip was a wrinkle rather than a rift. The housing market has shaken it off, bouncing back to its fastest annual growth since November 2022,” said Sarah Coles, head of personal finance, Hargreaves Lansdown.
“We’ve seen a pick-up in activity from landlords, who put sales in train before the Budget. They may not have had the capital gains tax blow they were expecting in the speech, but given that the Treasury is still more likely to hike taxes for landlords than to cut them in the next few years, there’s a decent chance many of them have decided to get out anyway, while they know where they stand.”
“More properties for sale will have spurred more buyers into action, especially in areas where a lack of choice had been holding them back. We had an indication this could be the case from the Bank of England, as mortgage approvals for new purchases had risen in October – to the highest point since August 2022. We’re getting back into solid pre-pandemic territory, with 68,300 approvals.”
Whether the increase in house prices holds through the change of stamp duty laws next year will depend heavily on interest rates and resulting mortgage rates. Mortgage rates have steadily increased in recent weeks after the Bank of England signal rates may not fall as quickly as previously thought.
The prevailing interest and mortgage rates when the dust settles following the rush to beat stamp duty next year will drive prices through 2025, with affordability still stretched for many first-time buyers.
Aquis weekly movers: Product launch delays for Incanthera due to patent dispute
KR1 (LON: KR1) had net assets of 57.79p/share at the end of October 2024, down from 62.15p/share at the end of the previous month. There was nearly £600,000 of income generated from digital assets during the month. The share price jumped 24.8% to 85.5p.
WeCap (LON: WCAP) has converted £7.75m of loan notes in WeShop Holdings in return for 3.21 million shares, which is 1.33 million shares at 300p each and 1.875 million shares at 200p each. This increases the shareholding to 16.2%, including shares owned by 235%-owned Community Social Investments. WeCap says that the value of the shareholding is £24.6m, based on the last fundraising share price of 476p. WeCao has extended the discounted capital bond issued to Hawk Holdings for 18 months. The total owed is £6.18m. The WeCap share price increased 7.69% to 1.05p, which capitalises the company at £4.3m.
Wishbone Gold (LON: WSBN) has appointed Tony Moore as chairman and Jack Sun as finance director. The share price improved 6.67% to 0.32p.
SulNOx Group (LON: SNOX) has appointed Fuelonomics Hydrocarbons Innovations as distributor of SulNOxEco fuel conditioners in Nigeria. The share price rose 4.81% to 54.5p.
Vinanz Ltd (LON: BTC) has received the initial order of Bitcoin miners and they are up and running in Nebraska. The share price moved up 0.885% to 14.25p.
Arbuthnot Banking Group (LON: ARBB) chairman and chief executive Sir Henry Angest has bought 116,000 shares at 900p each. He owns 58% of the voting shares. The share price edged up 0.822% to 920p.
FALLERS
Incanthera (LON: INC) has been accused of potential patent infringement in the formulation of its Skin + Cell skincare range. Even though Incanthera believes that there is no merit to the accusation, but the launch of the Skin + Cell range of products has been delayed. There is cash in the bank following a £2.6m subscription at 15p/share. The share price recovered from an all-time low earlier in the week, but it still slumped 57.4% to 5.75p.
Electric vehicle technology developer Equipmake (LON: EQIP) increased full year revenues by three-fifths to £8.1m. Bus repowering revenues grew fastest, but this is labour intensive at low volumes. The loss increased from £5m to £9.1m. The cash outflow from operations declined from £9m to £6.29m. Costs are being reduced. There was £2.5m in the bank at the end of May 2024. A potential licensing agreement could provide cash flow over the next two years. The share price declined by one-fifth to 2p.
Barry Hersh has reduced his stake in Global Connectivity (LON: GCON) from 6.97% to 5.96%. The share price fell 3.45% to 0.7p.
Invinity Energy Systems (LON: IES) has hired Adam Howard as finance director. He was previously at the National Walth Fund. The share price dipped 2.04% to 12p.
AIM movers: Positive exploration news for Oracle Power
Oracle Power (LON: ORCP) has received the final batch of assay results for the drilling at the Northern Zone intrusive hosted gold project. These show high grades over an expanded area. A mineralisation report is expected by the end of November and then a mining lease application will be submitted. Cantor Fitzgerald has reduced its stake, and Mahfuz Chowdhury has taken a 3.72% shareholding. The share price soared 171% to 0.032p.
TomCo Energy (LON; TOM) subsidiary AC Oil has applied to the Utah authorities for a permit to drill six holes on its lease area near Vernal, Utah. If approved, the drilling could start in 2025. The share price doubled to 0.07p.
Orosur Mining Inc (LON: OMI) has completed the acquisition of Minera Monte Aguila giving it 100% ownership of the Anza gold project in Colombia. Drilling has commenced at Pepas. The share price increased 80.8% to 4.7p.
Quadrise (LON: QED) has signed two long-awaited agreements. The deal with shipping company MSC and Cargill involves production of bioMSAR and MSAR fuels in Antwerp and will enable vessel trials on board the MSC Leandra. Cargill will supply feedstocks and sell the fuels to MSC. The trial should start in the first quarter of 2025. There is also an agreement with fuel supplier Auramarine to develop decarbonisation products in the marine sector. They will enable companies to comply with new environmental regulations. The share price improved 69% to 3.3p.
FALLERS
i-nexus Global (LON: INX) intends to leave AIM. The cloud-based software provider says poor share price performance and liquidity has led to the proposal. There should be direct cost savings of £250,000. The business has been consistently loss making. There is a three-year growth plan. i-nexus Global raised £10m at 79p/share when it joined AIM in June 2018. The cancellation will happen on 27 December if shareholders agree. The share price has recovered some of its initial loss – it fell to 0.65p at one point – but it is still down 44.4% to 1.75p. The market capitalisation is £500,000.
Helix Exploration (LON: HEX) reports that the Amsden formation at the Clink#1 well in the Ingomar Dome in Montana has sub-economic grades of helium. Amsden was always thought to be a small proportion of the potential resource. The more important Flathead formation at the same well had 2.5% helium. The company believes that there could be helium below the Amsden formation and there will be appraisal testing of the Charles formation. Investor sentiment is likely to be volatile and the share price slumped 29.1% to 14.75p.
There was no news from ImmuPharma (LON: IMM), but Aquis-quoted investee company Incanthera (LON: INC) has been accused of potential patent infringement in the formulation of its Skin + Cell skincare range. Even though Incanthera believes that there is no merit to the accusation, but the launch of the Skin + Cell range of products has been delayed. There is cash in the bank following a £2.6m subscription at 15p/share. ImmuPharma sold its 9.9 million shares in Incanthera, raising £1.5m, but it still holds 7.3 million warrants exercisable at 9.5p each. These had been in the money, but the share price has slumped well below the exercise price. The 24.3% decline in the ImmuPharma share price to 1.185p appears overdone on this basis.
ECR Minerals (LON: ECR) says that the potential buyer of assets in Victoria and related tax losses of A$75m is assessing the appropriate structure of the deal. The exclusivity has been extended to the end of January. ECR Minerals is raising £950,000 at 0.33p/share. The cash will be used to advance projects in Victoria and Queensland, including completing assessment of gold production at Blue Mountain, which could be generating revenues in the near future. The cash will fund the 2025 programme of work. ECR Minerals is collaborating with James Cook University in Queensland for the exploration of the Lolworth rare earths project. The share price fell 24.1% to 0.315p.