Cadence Minerals Report positive operational progress at Amapa Iron Ore Project

Cadence Minerals

Cadence Minerals plc (LON KDNC; OTC: KDNCY) has announced that DEV Mineraço S.A has delivered positive operational progress at the Amapa Iron Ore Project.

Highlights:

· Pre-feasibility Studies (‘PFS’) have commenced on the rehabilitation of:

· The beneficiation and processing plant

· The railway and associated infrastructure between Pedra Branca and DEV’s port at Santana

· Working alongside Companhia Docas de Santana (‘CDSA’), DEV has, for the first time, been able to load a full vessel at Pier 2 from berth-side.

· The Jack-Up rig at the Santana port is currently being righted and recovered.

· Continued maintenance of the tailings dams and the start of work required by ANM ( Agência Nacional de Mineraço ).

As previously announced on 10 February 2021 and on 27 July 2021, the Commercial Court of São Paulo (‘the Court’) ruled that DEV could export sufficient iron ore to realise a total US$20 million profit from the Amapa stockpiles(US$ 10 million was permitted on each separate occasion). A portion of these funds is being used to redevelop Amapa, including commissioning studies, capital projects and working capital. DEV, working alongside Cadence and Indo Sino Pty Ltd, has been progressing with the redevelopment of Amapa in several key areas.

Pre-feasibility Studies

DEV has appointed IDG Engenharia E Consultoria LTDA (‘IDG’) to carry out the engineering and conditioning study on the beneficiation and processing plant at the Amapa mine. IDG is a Brazilian ISO approved engineering and consulting company with a broad range of experience in the sector, having worked for Vale, Arcelor Mittal, Kinross, London Mining and Anglo American. They also have specific expertise at the Amapa mine, having consulted on the project previously.

In addition to the engineering and conditioning study, IDG will review the power supply options for the mine and plant, particularly the possibility of connecting to the grid network, enabling the mine and  the plant to be predominantly powered by lower-cost renewable energy.

DEV has appointed Technicontrol Consultoria E Etrinamento Empresarial Ltda (‘Technicontrol’) to carry out the PFS work on the railway. Technicontrol has mobilised to Amapa and will begin inspecting some 193km of rail and associated infrastructure, which transverse across the state of Amapa from Pedra Branca to DEV’s port at Santana. Techincontrol will also review and cost the locomotive and rolling stock requirements for the mine. Technicontrol also has previous experience with the Amapa project.

Both of these studies, once complete, will form part of the PFS. In the coming months, we expect DEV to appoint a consulting and engineering firm to start work on the port studies and conduct a geotechnical investigation of the mine.

Increased Iron Ore Loading Capacity at CDSA, Amapa

Working with CDSA, DEV has established and tested a process at CDSA’s port in Santana to load a vessel (45,000 ton) with iron ore at Pier 2 from berth-side. This operation was the first of its kind and was carried out early last week, and this resulted in a historical event at CDSA when two vessels were loaded at piers 1 and 2 with iron ore simultaneously

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DEV carried out this trial operation by loading ore owned by a third party. The shipment of this ore is part of the judicial recovery process approved by the creditors in July 2019 and was carried out at a commercial rate. With this increased capacity, DEV will ship its stockpiles at a faster rate than previously expected.

DEV is scheduled to complete its fourth and last shipment under the court judgment granted earlier this year in August. The four shipments of 58% beneficiated iron ore have netted approximately US$10 million to DEV. After this fourth shipment, DEV will begin shipments to fulfil the second court judgment, as announced on 26 July 2021.

Jack-Up Rig

As part of the port reconstruction carried out after the Amapa port collapse in 2013, a jack-up iron ore loading platform was partially installed. In subsequent years, the platform began to list and partially sank due to a lack of funds and maintenance; however, DEV has been committed to securing and recovering the jack-up platform and, to that end, has engaged a marine engineering firm that began work in July to refloat the platform. At the time of writing, one of the platforms has been partially refloated, and the recovery is progressing well.

Tailings Dams

As previously announced, DEV began tailing dam maintenance earlier in the year. DEV has now employed a civil engineer and two geotechnical consulting firms to advance the work programme, including monitoring, geotechnical stability testing and compliance with statutory reporting. The end goal is to ensure that the current dams will be suitable for future operations amid Brazil’s more stringent regulatory environment.

Cadence Minerals CEO Kiran Morzaria commented , ‘On behalf of the Cadence Board, I am pleased to report solid operational progress at Amapa in regard to recommissioning work at the mine, port and railway. The ongoing sales from our iron ore stockpiles are providing sufficient funding to complete the PFS, along with some of the work required to bring the complete operation back to life.’

‘We remain enthused by the opportunities and possibilities that a fully recommissioned Amapa mine will deliver , and I am delighted to see local contractors and companies already engaged with us to make it happen .’

‘I look forward to reporting further progress to you in the coming weeks and months’.

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