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(Alliance News) - Cadence Minerals PLC on Monday said it has raised GBP650,000 through a share placing in order to commission and publish an independent scoping study on the Amapa iron ore project in Brazil.
The company also noted that Amapa owner DEV Mineracao SA is on track to begin shipping its stockpile of iron ore by the end of the second quarter or early in the third. Cadence and its joint venture partners are engaging with secured creditors to reach a settlement.
Movement of the stockpile to a public port is forecast for July 2020.
London-headquartered Cadence entered a bringing agreement in 2019 to invest in and acquire an up to 27% interest in Amapa and has first right of refusal to acquire a 49% stake.
The remaining major precondition for Cadence to invest in Amapa, releasing USD2.5 million in escrow, is for DEV Mineracao to reach a settlement agreement with secured bank creditors. Once prerequisites are satisfied and the escrow money released, Cadence will become a 20% shareholder in Amapa.
"Cadence along with our joint venture partners continue to engage with the secured bank creditors with the aim of reaching a settlement. While we await the settlement with the secured bank creditors, The JV partners will work with DEV to advance the restart of the Amapa project using the proceeds of the iron ore, accelerating the production from the Amapa project," said Cadence.
Cadence intends to use the proceeds of its GP650,000 placing of 7.2 million shares at 9 pence per share to pay for a scoping study as well as to finance Amapa project expenses. The money also will be used to give Cadence "flexibility in paying down its outstanding loan notes in accordance with its payment schedule". Cadence's loan note balance currently totals USD2.1 million.
Shares in Cadence were down 6.9% at 9.18p on Monday in London in afternoon trading, giving the company a market capitalisation of GBP12.2 million.
WH Ireland Ltd was nominated advisor and broker for the placing, while Novum Securities Ltd was joint broker.
By Anna Farley; annafarley@alliancenews.com
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