Kiran Morzaria of Cadence Minerals provides an overview of milestones achieved & what’s to come
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Kiran Morzaria CEO of Cadence Minerals #KDNC provides an overview of milestones achieved from their interim results ended 30th June 2022 and what’s to come in the next 6 months, including Amapa's updated mineral resource estimate, followed by an ore reserve estimate and, finally, the publication of the PFS.
OVERVIEW
The Company's goals for the six months ended 30 June 2022 were first to vest our 27% in the Amapa Iron Ore Project ("Amapa Project"), secondly to progress the development of Amapa and advance the Pre-Feasibility Study ("PFS") and lastly to create capital growth in our passive private investments via a sale either in cash or a swap into liquid equity. I am pleased to report the Company was successful in all of the above goals.
The first goal was met in the first quarter of this year. After successfully reaching an agreement to vest its 20% at the end of December 2021, Cadence increased its stake in the Amapa Project to 27% in March 2022; the consideration for the additional 7% was US$3.5 million. The funding was used to achieve our second goal, which was to advance the PFS. Although PFS work commenced in 2021, the March investment fully funded the remainder of the PFS study. The current expectation is that in Q4, we will publish an updated Mineral Resource Estimate ("MRE), followed by an Ore Reserve Estimate ("ORE") and, finally, the publication of the PFS.
The final goal was achieved via two asset sales; firstly, our 31.5% interests in Lithium Technology Pty Ltd and Lithium Supplies Pty Ltd ("LT and LS") were sold to Evergreen Lithium and secondly, our 30% interest in licenses within the Yangibana Rare Earth Project ("Yangibana Project") were sold to owner/operator Hastings Technology Metals. In both cases, Cadence agreed to vend these assets for equity in companies that are either listed or are expected to be listed.
Cadence has invested approximately £1.7 million in these assets, and our sale price into the equity of the two public companies was the equivalent of £5.5 million, representing a 321% cumulative return on our investments. The Yangibana sale is not reflected in the interim financial statements as it has not yet been completed. However, we expect that both the Yangibana Project transactions and the IPO of Evergreen Lithium will complete this year, hopefully further increasing our returns.
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