Cadence Mineral Regulatory News (KDNC)

Highlights

In a significant development in Cadence's Brazil's iron ore interests:

· Brazil's Commercial Court of São Paulo has ruled that DEV Mineração S.A., owner of the Amapá iron ore project ("DEV") can commence the shipment of the iron ore stockpiles situated at DEV's wholly-owned port in Santana, Amapá, Brazil.

· Independent surveys of these iron ore stockpiles indicate that some 1.39 Mt of iron ore in three stockpiles are available for immediate export with an average Fe grade of 62.12%.

· Permission to export the iron ore was granted as a result of a petition filed by DEV supported by judicial trustee and creditors committee.

· The net proceeds of the iron ore sales will primarily be used to pay labour and small creditor and to bring the Amapá iron ore project ("Amapá Project") back into production.

· Iron ore exports are targeted to re-commence in the coming months.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) advises that the Amapá Project has been granted permission by the Commercial Court of São Paulo ("Court") to begin the shipment of its stockpile from the port of Santana, located in the Amapá Province of Brazil.

Next Steps

DEV, with Cadence's and Indo Sino's ("JV Partners") support, are liaising with local authorities to obtain the required licenses and permits to rapidly commence exports, and have already received federal authorisation to export the iron ore. In addition, the JV Partners are in detailed discussions with potential offtake partners and local contractors so that the Amapá Project can begin shipment as quickly as possible.

Currently, we estimate that the first shipment from the stockpile should be in late Q2, early Q3 of this year. These timelines are, of course, dependent on the ongoing and future impacts of COVID 19 on associated movement and activities.

An independent survey of these stockpiles located at the port indicates that some 1.39 million tonnes ("Mt") of iron ore in three stockpiles with an average Fe grade of about 62.12% are available for export.

Cadence Amapá Project stake

As mentioned in previous announcements there remains only one major precondition for Cadence to make its investment in the Amapá Project and release the sum of US$2.5 million currently held in escrow in a judicial trust account ("Escrow Monies").

This precondition requires DEV to reach a settlement agreement with the secured bank creditors. On satisfaction of the prerequisites and the release of the Escrow monies, Cadence will become a 20% shareholder in the Amapá Project via our joint venture company which will own 99.9% of Dev.

Cadence's rights over the Amapá Project have been formalised in the Judicial Restructuring Plan of DEV and ratified by the São Paulo Bankruptcy court. Dev officers have been appointed in the Judicial Restructuring Plan, with acceptance of creditors.

While we await the settlement with the secured bank creditors, The JV Partners will work with DEV to advance the restart of the Amapá Project using the proceeds of the iron ore, accelerating the production from the Amapá Project.

About the Project

The Amapá Project was owned by Anglo American plc and Cliffs Natural Resources and consists of a large-scale iron ore mine, beneficiation plant, railway and private port. In 2012 the operation produced 6.1 Mt of iron ore concentrate and reported operating profits from their 70% ownership in the Amapá Project of US$120 million (100% - US$171 million). Before its sale in 2012, Anglo American valued its 70% stake at US$462m in its 2012 Annual Report (100% - US$600m).

As previously announced, the total historical mineral resource contains an estimated 348 Mt of ore @ 38.9% iron content ("Fe"). The ore is beneficiated at the mine to 65% Fe Pellet Feed and 62% Fe Spiral Concentrate. Based on available historic mine plans and an independent consultant review, it is expected that at full production the Amapá Project has a mine life of 14 years and at full capacity is targeting to produce up to 5.3 Mt of iron ore per annum.

Court Petition

The permission to export the iron ore was granted by the Court, as a result of a petition filed by DEV and supported by the judicial trustees of DEV, KMPG Brazil and the creditors committee.

The Court ruled that DEV is permitted to export sufficient iron ore to realise a US$10 million profit from the Amapá stockpiles at the port (after the deductions of all logistical, regulatory, shipping and sale costs).

The first of the net revenues from the sale of the stocks shall be used to pay historic small and employee creditors (~US$2.5 m). Thereafter funds will be used to begin recommissioning studies on the asset including plant, railway and port and to start maintenance and monitoring of the current tailing dam facilities (~ US$ 6 m) and provide ongoing working capital and historic finance obligations.

DEV also filed a further petition which requested the release of R$400,000 (~US$78,000) currently held in a judicial account to be used for essential maintenance at the wholly-owned private port and the removal of the secured bank creditors liens ("Bank Liens") over DEV and its assets. The Court ruled to release the funds. In addition, the Court has requested that the secured bank creditors reach an agreement with the JV Partners and DEV within 60 days or the Court might rule on the annulment of the Bank Liens and consider the banks as unsecured creditors. As unsecured creditors, the bank's credit will be subject to restructuring plan limits and discounts and be paid from free cash flow from DEV, which may be over fifteen years.

Cadence Chairman Andrew Suckling commented; "The ruling from Brazil's São Paulo court marks a significant milestone for the re-opening of the Amapá iron ore project and its long-term benefits for stakeholders and the region. I would like to put on record my sincere thanks and gratitude for the tireless efforts by Cadence management, IndoSino and DEV and its advisors. This ruling brings the Amapá Project back to life.

Despite the severe disruption created by COVID-19, management has remained focused on delivering the Amapá Project as planned, all the while supported by a robust iron ore market that continues to justify the opportunity. Regardless, our primary concern at this time has been to ensure the safety and wellbeing of all our staff, and it is my fervent hope that employees, shareholders, contractors and their families continue to remain safe and secure through this challenging time."

Cadence CEO Kiran Morzaria commented; "For Cadence, this a significant step forward for the redevelopment of the fully integrated Amapá iron ore project. We are truly entering the operational phase of the asset, and despite the current turbulent and volatile market conditions, the iron ore prices remain robust. The whole Cadence and JV team have been active in delivering an excellent outcome for Amapá.

The shipment of the iron ore stockpile at the port of Santana will now trigger long overdue payments to hundreds of local ex-employees and small creditors. It will assist with funding the necessary recommissioning studies required to re-open the mine, which will, in turn, will rejuvenate the regional economy and provide significant employment, health and educational benefits for its people."

Our Chairman has previously referred to Amapá as a "Company Changing" project for Cadence, and it is now on its way to deliver this goal. With this in mind, I now look forward to providing shareholders with further updates as the recommissioning process moves forward."

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