Rns PREMIER AFRICAN MIBERALS !27 Jun 2018 08:03
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Heads of Terms Signed to Earn In up to 30% of a Significant DFS Ready Lithium Project
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that it has entered into a conditional Heads of Terms with Premier African Minerals Limited (Premier) to earn up to 30% directly into the Zulu Lithium and Tantalum Project ("Zulu" or "Zulu Project") in Zimbabwe by investing up to US$5.1M. This investment will fully fund the Definitive Feasibility Study ("DFS") of the Zulu Project, which in November 2017 reported a scoping study with a lithium concentrate net present value ("NPV") of US$127M and a lithium carbonate NPV of US$718M.
PROJECT HIGHLIGHTS
· Scoping Study reported target annual production of 84,000 tonnes of spodumene concentrate and 32,500 tonnes of petalite with gross revenues of US$ 1 billion
· Pre‐tax Net Present Value ("NPV") of US$127 million (10% discount rate) and Internal Rate of Return ("IRR") of 86%
· Mineral Resource Estimate of 20 million tonnes ("Mt") at 1.06% Lithium Oxide ("Li2O") containing 526,000 tonnes of Lithium Carbonate Equivalent ("LCE")
· Initial Capital Cost of US$64 million, direct operating cost of US$486 per tonne of concentrate
· Initial 15+ year mine life at an average strip ratio of 5.5:1
· Significant potential for additional mineralisation with a 120 to 160 Mt exploration target over the Zulu Project
INVESTMENT HIGHLIGHTS
· Up to US$5.1 million investment into Zulu Project to earn 30% through a five stage investment programme against project deliverables - fully funding DFS
· On completion of the fifth stage of the investment
§ Cadence will be granted a right of first refusal to increase its stake to 49% of the project
§ Cadence will be awarded exclusive marketing rights on the sale of all mineral products
· Cadence will have the right on the completion of the first stage of investment to appoint one director to both the board of Zulu and the board of Premier. On completion of the fifth stage Cadence will have a right to appoint a further board member to the board of Zulu
· A technical committee will oversee the management of the DFS, consisting of five persons. Cadence and Premier will be entitled to each appoint two members of the technical committee and will jointly appoint a project manager
· Investment subject to due diligence by Cadence and exclusivity agreed for a period of 60 days
Kiran Morzaria, Chief Executive Officer, added:
"The Zulu Lithium Project is well advanced, with significant mineral resources, robust scoping study economics and ample room for expansion given the size of the exploration targets."
"By coupling Premier's local relationships and country expertise and Cadence's experience in lithium project development both parties will be able to unlock value, rapidly advance this project with the aim of developing Zulu into a significant producer to s
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