Cadence Mineral Regulatory News (KDNC)

Cadence Minerals Plc

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

Bacanora Lithium (BCN) Proposed Strategic Investment by Ganfeng Lithium.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today by Bacanora Lithium (AIM:BCN) ("Bacanora") that it has signed a non-binding Heads of Terms for a strategic investment in both Bacanora and its flagship Sonora Lithium Project ("Sonora" or "Sonora Project") in Mexico ("the Strategic Investment") by Ganfeng ("Ganfeng" or "GFL") , the world's largest lithium metals producer in terms of production capacity and the world's third largest lithium compounds producer. Completion of the Strategic Investment would form a major part of the Company's finance package for the construction of an initial 17,500 tonnes per annum ("tpa") lithium carbonate ("Li2CO3") operation at the large scale, high grade Sonora Project. .

Announcement Highlights:

· Proposed cornerstone strategic investment by top tier global lithium producer Ganfeng at both the corporate and Sonora Lithium Project level.

· Includes subscription for a 29.99% interest in Bacanora, in addition to an initial 22.5% direct interest in the Sonora Lithium Project with an option to increase up to 50% of the Project.

· Additional long-term offtake for both Stage 1 and Stage 2 lithium production.

· GFL would assist Bacanora in the finalisation of the EPC engineering design and the subsequent construction and commissioning of Sonora Lithium Project.

· Strategy would be in place to ensure project timetable of first production in 2021

As part of the Strategic Investment, GFL would subscribe for a 29.99% equity interest in Bacanora for a cash consideration of £14,400,091, being 57,600,364 new ordinary shares in the Company (the "Private Placement"), at a price of 25 pence per share, representing the volume weighted average price ("VWAP") on AIM of the Company's shares over the previous 20 trading days at the time of negotiation. Subject to the completion of the Private Placement, GFL would have the right to nominate one director to the main board of Bacanora. GFL would also be granted pre-emption rights in relation to new share issues proportionate to its interest in Bacanora.

In addition, as part of the Strategic Investment GFL would be granted the right to acquire an initial 22.5% interest in a subsidiary of Bacanora which holds the Sonora Project ("Project Level Company"), for a cash payment of £7,563,649, equivalent to a price of 25 pence per share on the same basis as the Private Placement (the "Project Level Investment"). Subject to the completion of the Project Level Investment, GFL would have the right to nominate one director to the board of the Project Level Company. GFL would also be granted an option to increase its interest in the Project Level Company to up to 50% from 22.5%, within 24 months of the completion of the Project Level Investment. The valuation of any additional investment in the Project Level Company by GFL would be based on the share price of Bacanora at the time of the additional purchase.

The £14,400,091 capital raised via the Private Placement and the £7,563,649 via the Project Level Investment would be used for the continued development and commercialisation of the Sonora Project. Under the proposed terms of the Strategic Investment, GFL would play an active role in this process. Within 6 months of the Strategic Investment, GFL would complete a review of the current EPC engineering design focusing on reducing the capital cost of the Sonora Project from the current figure of approximately US$420 million and accelerating the construction timetable from that envisioned in the Feasibility Study. Based on the results of this review, GFL would assist with finalising an EPC engineering contract for the mine and plant construction and would work with Bacanora during the construction, commissioning and early operations phases of the Sonora Project. GFL would also provide a plant and process commissioning team to assist Bacanora in commissioning the Sonora Project.

Conditional on the completion of the Strategic Investment, GFL will be granted exclusive offtake rights to purchase 50% of all lithium products produced at Sonora for the life of the mine during Stage 1 planned production of Li2CO3 ("Offtake Agreement"). GFL would also have the option to increase its off-take to 75% of all lithium products during Stage 2 of production. GFL would pay market-based price for every tonne of Li2CO3 sold under the Offtake Agreement.

The Strategic Investment is conditional on, amongst other matters, completion of due diligence, definitive documentation and regulatory approvals. Further announcements will be made in due course.

The Strategic Investment follows the completion of a Feasibility Study, which confirmed the attractive economics and low operating costs of a 35,000 tpa battery grade (+99.5%) Li2CO3 operation at Sonora: US$1.253 billion pre-tax project Net Present Value ("NPV"), 26.2% Internal Rate of Return ("IRR"), and Life of Mine ("LOM") operating costs of c.US$4,000/t of Li2CO3 (see announcement dated 13 December 2017).

Bacanora is a lithium exploration and development company. At the end of April 2019 Cadence held approximately 1.6% of Bacanora's equity and 30% of Mexalit and Megalit joint venture companies. Mexalit is the owner of the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which forms part of the 20-year mine plan of the Sonora Lithium Project in Northern Mexico.

The full release can be found at: https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BCN/14079306.html

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

- Ends -

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 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 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 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.