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(Alliance News) - Cadence Minerals PLC on Thursday said it is closer to investing USD2.5 million in the Amapa iron ore project in Brazil.
Cadence said just "one major precondition" remains before it completes the investment, and it requires project owner DEV Mineracao SA to reach a settlement with bank creditors.
Cadence said: "Cadence and our joint venture partners Indo Sino Pte Ltd have been in negotiations with the secured bank creditors, and we have offered a settlement involving a discount on the amounts owned by Dev.
"This settlement is intended to be paid from part of the proceeds from the sale of the iron ore stockpile currently held at Dev's 100% owned port facility in Santana, Amapa. Alongside our partners, we continue to negotiate with the secured bank creditors, and we will update the market once a binding agreement is reached."
The investment sum is currently in escrow, meaning it is being held by another party until a conditions have been met.
Cadence said: "The escrow monies will then be used for the payment of former employees and small trade creditors. Once Cadence becomes a shareholder in the Amapa project, the government of Amapa will permit Dev to start operations on the asset including the shipment of iron ore from the port."
Cadence in June said it entered into a binding agreement with Indo Sino Pte to acquire a 27% interest in a joint venture company holding the Amapa iron ore mine.
The Amapa project, located in Brazil, was formerly owned by Anglo American PLC and Cliffs Natural Resources.
Cadence said at the time the investment will be spit into two stages, the first to acquire 20% of the joint venture for USD2.5 million.
Cadence will then pay further USD3.5 million to buy the remaining 7% interest.
Shares in the company were 2.3% lower at 3.81 pence each in London on Thursday afternoon.
By Eric Cunha; ericcunha@alliancenews.com
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