(Alliance News) - Cadence Minerals PLC's shares fell on Friday after saying its binding settlement agreement with bank creditors is proceeding as planned, and that its Australian lithium acquisition option with Castillo Copper Ltd will unwind.
The settlement agreement, first announced in December, will allow Cadence to vest 20% interest in its Amapa iron ore mine. It is likely to be finalised in the first half of February.
Cadence's share price fell 7.8% to 27.67 on midday Friday in London.
The UK-based early-stage mineral investment and development company is working on the next investment phase. It is targeting an additional 7% of Amapa for USD3.5 million, to put towards feasibility studies on the mine.
Preliminary studies are progressing as expected, the company said, and civil engineer, Tony Cau, has been appointed as pre-feasibility project director.
Chief Executive Officer Kiran Morzaria said: "I am pleased to advise shareholders that the filing of the contractual and regulatory documentation pertaining to the Amapa bank settlement agreement is proceeding as planned. Work has already started on the next investment phase to take Cadence up to 27% ownership of Amapa."
Separately, Cadence was notified by Lithium Technologies Pty Ltd and Lithium Supplies Ptyy Ltd in which it owns a 31% shareholding, that the 90-day option agreement with Castillo would unwind.
The agreement was concerning the potential acquisitions of the Litchfield and Picasso lithium projects in Australia. The deposit of AUD50,000 has been returned to Castillo, as part of the break agreement terms. Castillo said it instead has decided to focus on its Broken Hill Alliance project in New South Wales.
"We see the unwinding of this option agreement as an opportunity for Cadence to extract a higher valuation for these prospective assets," Morzaria said.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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Cadence Mineral (KDNC)
Castillo Coppe. (CCZ)