Cadence Mineral Regulatory News (KDNC)

Cadence Minerals Plc

("Cadence Minerals", "Cadence", or "the Company")

Corporate Update

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to provide an update on the progress of three of its investments. The latest presentation is available on our website.

Hastings Technology Metals (ASX: HAS) ("Hastings")

On 25 January 2023, Cadence completed the sale of its 30% stake in several mineral concessions forming part of the Yangibana Rare Earths project for a consideration of 2.45 million Hastings shares, equating to approximately 1.9% Hastings issued share capital. This consideration was a premium over the Net Present Value ("NPV") of the Cadence portion of the mineable material, based on the definitive feasibility ("DFS") updated by Hastings on 21 February 2022.

Hastings recently published an update on the Yangibana Rare Earth Project, highlights of which are as follows:

Ø Significant progress during the last two months on enabling construction and ordering long lead critical items.

Ø A total of $146 million in contractual commitments has been made to date, demonstrating the high degree of confidence by the Hastings Board in the future of the Yangibana project.

Ø Ore Reserves increased 25% to 20.93Mt at 0.90% Total Rare Earth Oxide (TREO) grade, increasing mine life to 17 years.

Ø Senior management appointments in the last two months include Rudolph van Niekerk as COO, Robert Klug as General Counsel, and Tim Gilbert as General Manager of Operations. Recruitment is underway for Project Director and the CFO position following the recent career move by Matthew Allen.

Ø Cost and schedule review identified potential areas for construction contracting model restructuring, optimisation and de-risking.

Ø The recent engagement of Boston Consulting Group (BGC) to assist in further investigating the merits of an integrated mine-to-magnets strategy and exploration of partnership opportunities.

The full announcement concerning the Yangibana sale is available here.

Sonora Lithium Project ("Sonora")

Cadence holds a partial interest in the Sonora Lithium Project via a 30% stake in the joint venture interests in each of Mexilit S.A. de CV ("Mexilit") and Megalit S.A de C.V ("Megalit"). Mexilit, with its El Sauz and Fleur concessions, forms part of the Sonora Lithium Project and is a part of the reserve in the mine plan after initial mining in the La Ventana concession (100% Ganfeng). Mexalit and Megalit are each 70% indirectly owned by Ganfeng Lithium Co ("Gangfeng") and 30% by Cadence.

A feasibility study report was published in January 2018. The report estimated a pre-tax project net present value of US$1.253 billion at an 8% discount rate, an Internal Rate of Return of 26.1% and Life of Mine operating costs of US$3,910/t of lithium carbonate. Ganfeng has stated that they expect the capacity of phase I will deliver 50,000 tons of lithium hydroxide, which is 42% above the anticipated production levels outlined in the feasibility study.

In 2021, a decree was passed by the Mexican government to reform the domestic energy sector ("Decree"). The Decree stated that lithium would be included among the minerals considered strategic for an energy transition. As a result, no new concessions for lithium exploitation by private companies would be granted. Earlier this month, the Mexican government passed a presidential decree confirming that within a 900 square-mile lithium mining zone in northern Sonora state, existing concessions would "remain safe". This aligns with the general opinion that the Decree passed by the Senate only impacts licenses, concessions, or contracts to be granted, not already those granted, as is the case for the Sonora Lithium Project.

Amapá Iron Ore Project ("Amapá")

Earlier this year, Cadence published an economically robust Pre-Feasibility Study (" PFS") for the Amapa Iron Ore Project. Along with the PFS and subsequent consultations with the key contractors, we have identified three areas of possible improvement to Amapá.

The first will be to review the historical drilling and geological data north of the Amapá mineral concessions. The data has been acquired and is currently being processed to identify further iron ore resources, which, if present, would further increase the mine life. The second area of potential improvement is a change in the layout of the port at Santana by moving the railway loop further from the shore. A scoping study regarding this option has already been completed and identified capital savings. The last area of potential improvement is to investigate and review the flowsheet to improve the final product quality over and above the current 65% iron ore concentrate.

During 2022, the impact of the Ukraine war and the legacy of Covid on supply chains resulted in higher shipping costs and lower iron ore pricing. As a result, only one iron ore shipment was made during the year. The net proceeds of this shipment, along with approximately half of the net proceeds from the shipments in 2021, have been used to pay the secured bank creditors as per the settlement agreement announced in December 2021 here. Given these unprecedented macro-economic conditions, DEV Mineração S.A. ("DEV") was unable to meet the 2022 payment schedule as per the settlement deed and although the bank creditors have reserved their rights, the settlement deed remains in full effect with all parties in discussions with a view to agree a new timetable in order to rephase payments so these can be met in light of market conditions.

With improving iron ore prices and stability returning to shipping costs, the sale of the 58% iron ore concentrate stockpile is now economically viable. We expect shipping to recommence in the next six months, with the net revenues being used to pay the bank creditors, as per the settlement agreement.

Cadence CEO Kiran Morzaria, commented: "As is the nature of any investment company, our value is driven by the sum of our parts. With the recent reduction in Hastings share price our portfolio valuation has also reduced. However, we see no fundamental reason for this price volatility given the substantial progress. Hastings is making in the construction of the Yangibana rare earth project and we look forward to them advancing to project towards production in 2024."

"Cadence's current public and private investments have continued to perform delivering a unrealised return of approximately 172% and our listed investments have delivered a total return (realised and unrealised) of 328%."

"Our confidence in Amapa continues to grow thanks to a potential further increase in the overall iron ore resource, improvements to the port and prospects for restarting iron ore shipments in the coming months. I look forward to providing further updates."

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Cautionary and Forward-Looking Statements

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identied by their use of terms and phrases such as "believe", "could", "should", "envisage", "estimate", "intend", "may", "plan", "will", or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the company's future growth results of operations performance, future capital, and other expenditures (including the amount, nature, and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reect the Directors' current beliefs and assumptions and are based on information currently available to the Directors. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes actions by governmental authorities, the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The company cannot assure investors that actual results will be consistent with such forward-looking statements.

The information contained within this announcement is deemed by the company to constitute Inside Information as stipulated under the Market Abuse Regulation (E.U.) No. 596/2014, as it forms part of U.K. domestic law under the European Union (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.