Cadence Minerals Yangibana Project NPV8 Increases 84% to A$1 billion (post tax)

Cadence Minerals

Cadence Minerals plc (AQX/LON:KDNC; OTC: KDNCY) has today noted that Hastings Technology Metals (ASX:HAS), Cadence’s joint venture partner at the Yangibana Rare Earth Project in the Gascoyne region of Western Australia, has announced significant progress on, and improved project economics for the Yangibana Project. The updated project economics, based on a Definitive Feasibility Study (DFS) completed by Hastings in 2017 and revised in late 2021, follows an extensive and comprehensive review period, extending over three years, which has sought to de-risk project execution, optimise the flowsheet and enhance project economics.

Highlights:

·      Post-tax Net Present Value8 (“NPV8”) increases by 84% to $1,012 million.

·      Post-tax Internal Rate of Return (“IRR”) of 26%.

·      Life of Mine pre-tax Free Operating Cashflow increases by 71% to $4,376 million.

·      Revised capital cost estimated at A$582 million (including contingency is $658 million)

·      Project is ‘shovel-ready’ following a comprehensive review and assessment of current inflationary pressures present in Western Australia.

·      Capital payback period forecast at 2.7 years from commencement of production.

·      Production of 3,400tpa of NdPr Oxides capable of supplying up to 8% of forecast global NdPr demand.

·      Discussions on funding options with suitable partners continue to progress.

·      $20 million early works program to deliver the core site infrastructure at Yangibana is well underway

Key to this process was validating the capex required to bring Yangibana into operation considering the current inflationary environment and tightening labour market in Western Australia.

Following this review period, the management team now have a high degree of confidence in the quantum of capital required and are proceeding to finalise funding arrangements for Yangibana ahead of proposed commencement of plant construction activities forecast to commence in H2 2022. The $20 million early works program to deliver the core site infrastructure at Yangibana is underway with plant and personnel achieving good progress to date.

Relevance to Cadence Minerals Holdings in the Yangibana Project:

Cadence Minerals owns 30% of 3 Mining Leases, 6 Exploration Licences which form part of the Yangibana Rare Earth Deposit. Hastings Technology Metals owns the remaining 70% (“Hastings”). The current mining schedule indicates that the joint venture areas are scheduled to be mined in years 12 to 15 on the mine plan. Further details of our ownership the mineral resources and reserves on our jointly held leases can be found at:

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Hastings Technology Metals’ Executive Chairman Charles Lew commented: “Today is a significant milestone for the Hastings team that is the result of an extensive amount of work carried out over a number of years. The updated project economics tell a story of a world-class rare earths project that will be capable not only of delivering up to 8% of global NdPr demand for a period of at least 15 years but generate significant, long-term value for all shareholders.”

“The Hastings team has done a tremendous job since 2017 to optimise and de-risk the Yangibana project, both technically and commercially, to make it an even more compelling investment proposition. Since its discovery in 2014, we were always confident in the quality of the rare earths resource endowment at Yangibana. As it turned out, the steady progress we have made over the years has converged with a strong global rare earths magnet market underpinned by the global energy transition and electric mobility. As the updated project economics demonstrate, Yangibana will be a financially and operationally robust, long-life project.”

“We are well advanced on discussions with a range of funding partners (in addition to NAIF) and are now focused on finalising the appropriate capital structure that best positions Hastings for success in bringing Yangibana into production by 2024. This includes undertaking a corporate transaction or seeking a joint venture partner(s).”

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