Cadence Mineral Regulatory News (KDNC)

Cadence Minerals Plc

("Cadence Minerals", "Cadence")

Port Concession Update, Amapa Project

Cadence Minerals (AIM/AQX: KDNC; OTC: KDNCY) is pleased to announce the approval of the change of control request for the federal port concession owned by DEV Mineração S.A.'s ("DEV") ("Port Change of Control"). Alongside the reinstatement of the life of mine railway concession by the State of Amapa in December 2019, details of which can be found here, both these approvals represent two essential regulatory requirements over the critical infrastructure to operate the integrated Amapa Iron Ore Mine ("Amapa Project")

DEV, Cadence and Indo Sino Pte. Ltd. ("Indo Sino") have been liaising with the Agencia Nacional De Transportes Aquaviarios ("ANTAQ") to approve the Port Change of Control. The federal port concession is one of the licenses required to operate DEV's privatley owned port in Santana, Amapa. The approved Port Change of Control will occur once Cadence's and Indo Sino's joint venture company Pedra Branca Alliance Pte. Ltd. ("JV Co") is the 99.9% owner of DEV. As part of the Port Change of Control, ANTAQ has agreed to cease the recommended abrogation of the port concession. In addition, DEV has agreed to pay the outstanding fines of approximately US$267,000 to ANTAQ, 30 days after our JV Co takes control of DEV.

DEV ownership will pass to the JV Co once DEV, Cadence and Indo Sino have executed the settlement agreement with the secured bank creditors. Further details of the settlement agreement can be found here.

This approval represents a significant step forward in the licensing process to bring the Amapa project back into production. DEV continues to progress the licensing workstream across the multiple regulatory authorities, and we will update our shareholders as this progresses.

Cadence CEO, Kiran Morzaria, commented: "The Port Concession marks another significant step along the road to bring the Amapa Project back to life. Licensing and permitting often represent a substantial risk in the development of mineral projects, but thanks to the efforts of the team at DEV and its advisors, we have successfully secured two key concessions critical to the operational success of the Amapa project."

"On my recent Amapa site visit, I was delighted to see the rapid progress on the ground, driven by a highly motivated local management team and staff. I look forward to reporting further progress."

About the Amapa Project

The Amapa Project commenced operations in December 2007, with the first iron ore concentrate product of 712 kt shipped in 2008. In 2008 Anglo American (70%) and Cliffs (30%) acquired the Amapa Project as part of a larger package of mining assets in Brazil.

Cadence updated the Mineral Resource Estimate on 2 November 2020, increasing the MRE by 21%. The current MRE contains a Mineral Resource of 176.7 million tonnes grading 39.7% Fe in the Indicated category and Mineral Resource of 8.7Mt at 36.9% in the Inferred category, both reported within an optimised pit shell and using a cut-off grade of 25% Fe.

Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012. During this period, Anglo American reported operating profits from their 70% ownership in the Amapa Project of USD 120 million (100% USD 171 million) and USD 54 million (100% USD 77 million).

Before its sale in 2012, Anglo American valued its 70% stake in Amapa Project at USD 866 million (100% 1.2 billion). It impaired the asset in its 2012 Annual Accounts to USD 462 million (100% USD 660 million.

DEV filed for judicial protection in August 2015 in Brazil, and mining ceased at the Amapa Project. A judicial order in early 2019 offered investors and creditors the opportunity to file a revised JRP. Cadence and Indo Sino filed a conditional JRP, which creditors approved in August 2019, and since that time, Cadence, Indo Sino and DEV have continued to develop the Amapa Project and satisfy the conditions of the JRP.

Details of the Joint Venture Agreement

The agreement with our joint venture partner, Indo Sino, is to invest in and acquire up to 27% of a (JV Co. On completion and registration of the settlement agreement with the bank creditors, the equity of DEV will be transferred to the JV Co, at which point it will own 99.9% of the Amapa Project. Should Indo Sino seek further investors or an investment in the JV Co, the agreement also provides Cadence with a first right of refusal to increase its stake to 49%.

To acquire its 27% interest, Cadence will invest US$ 6 million over two stages in JV Co. The first stage is for 20% of the JV Co's consideration, which is US$2.5 million. The second stage of investment is for a further 7% of JV Co for a consideration of US$3.5 million. If Cadence is unable to complete the second stage of the investment or not exercise its right of first refusal under the terms of the Agreement, Indo Sino will have a twelve-month option to buy the shares in JV Co held by Cadence for 1.5 (1 ½) times the price paid by Cadence for such shares.

Cadence's investment is conditional on several material preconditions, including the grant of key operating licences and the release of bank securities over the asset. Upon completing Cadence's investment (not including the first right of refusal), our joint venture partner Indo Sino will own 73% of JV Co. The Agreement also contains security and default clauses which, if triggered, causes an upwards adjustment mechanism to allow Cadence to either receive cash from JV Co or receive additional shares in JV Co. In the latter case, Cadence's shareholding in the JV Co will not go above 49.9%.

Upon completing the US$ 6 million investment, Cadence will have the right to appoint two members to a five-member board. The remaining three members will comprise one member jointly appointed by Cadence and Indo Sino and two appointed by Indo Sino.

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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.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified 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 Cadence Minerals Plc'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 reflect 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 Cadence Minerals Plc. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. Cadence Minerals Plc cannot assure investors that actual results will be consistent with such forward-looking statements.