Last checked at 19 Jun 2018 11:27
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Lithium Assets in Argentina High Priority Prospective Areas Identified
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) announced on 22 March 2018 that a project had commenced its initial exploration programme on six high-quality lithium assets in San Luis Province, Argentina. The Company is now pleased to inform shareholders that a series of intensive desktop studies, which identify high-priority areas prospective for lithium exploration within the known spodumene bearing pegmatite fields, have now been completed. The Company currently owns 4% via an earn-in, further details of which are provided at the end of this RNS.
HIGHLIGHTS
· The investee's geology team, utilising a range of remote sensing and geographical information system (GIS) tools, have completed several desktop studies which identify highly prospective areas for lithium mineralisation in known spodumene bearing pegmatite bodies in San Luis Province, Argentina
· Encouragingly, there are multiple indicators that confirm the presence of spodumene bearing pegmatite bodies including geological structural features, aero-magnetic radiometric data analysis, satellite imagery and differentiation in granitic bodies.
· A sophisticated ranking system clearly delineates high-priority target areas based on pegmatite density and mass (estimated from extrapolating the exposed surface area), then reconciling these with soft variables such as vehicle accessibility and time to commence ground field exploration activities
· The net result is that out of the 55,773 hectares, comprising the six assets total area, the geology team have identified 10,049 hectares as high-priority areas for the next phase of the exploration programme
· Finalised Environmental Impact Assessments have been submitted to the mining regulator for these high priority areas, with applications for drilling permits to follow
· The project team are now in discussions with third party suppliers, including drilling contractors, and intend to fast-track the next phase of exploration as soon as regulatory approval is secured
With the completion of the desktop studies, the initial exploration programme is tracking ahead of the budgeted timeline. Clearly, through leveraging advanced exploration tools, the project's geology team has identified priority areas which represent circa 18% of the total tenure. Securing the necessary regulatory approvals, which the Board anticipates materialising quickly, will determine when the next phase of exploration programme can be progressed.
Kiran Morzaria, Chief Executive Officer, added:
"The Board is delighted with the excellent progress the project's geology team have made in identifying high priority targets for lithium mineralisation across 18% of our tenure in Argentina. Pleasingly, they are now ahead of internal timelines and in a solid position to fast-track the inaugural drilling programme, once regulatory approvals are secured."
"Whilst there is considerable work to complete, the Board remains focused on its long-term objective to prove up a viable hard rock lithium resource to meet the ever-growing demands of the global lithium-ion battery sector. The Board will keep shareholders apprised of fresh developments as they materialise."
Desktop and fieldwork
In completing the comprehensive desktop studies, the project's geology team leveraged high-tech equipment to the fullest to analyse all relevant geological data. Key steps involved in the desktop review included the following:
· Review of all legacy reports that detail lithium mining and associated minerals (beryl tourmaline, muscovite, garnets) in Sans Luis Province, as this data can help determine the evolution of pegmatites in the area;
· Utilised satellite imagery to differentially map pegmatites, granite, and other rocks of interest;
· Accessibility determined from the current road network and satellite photo digitalisation that highlights tracks and incremental topographical information;
· Identification of pegmatites that coincide and/or are near known lithium mineralisation and historic mines;
· Review of relevant geophysical aero-radiometric survey information to further differentiate pegmatite targets that are highly probable to contain spodumene mineralisation;
· Estimation of pegmatite density by calculating the potential number and surface area of prospective pegmatites in the area; and
· Assessment of infrastructure requirements, especially the accessibility for drilling equipment and support vehicles.
Future work programme
The initial planned field-work programme includes ground mapping, structural interpretation and surface sampling the highest priority targets for lithium mineralisation within the 10,049 hectares identified across the six assets. Specifically, this will focus on spodumene bearing pegmatites that have dense swarms and/or large surface areas which are readily accessible.
Drilling exploration activities are anticipated to commence promptly following the completion of the field work mapping programme and securing regulatory approval. The geology team have submitted the Environmental Impact Assessment and will lodge applications for drilling permits soon.
Ownership
Cadence can acquire 100% of the interest in the exploration permits under application and will initially earn 49% via staged investments of cash spent on exploration and development and the issue of new ordinary shares in Cadence. Cadence has completed Stage 1 of the investment and currently indirectly owns 4% of the exploration permits under application.
Details of the commitments under the acquisition agreement with the vendors are summarised below.
Stage | Ownership % | Total Ownership % | Lithium Technologies Pty Ltd | Lithium Supplies Pty Ltd | Purpose |
Stage 1 | 4% | 4% | £0.05 M | £0.05 M | Earn-in early non-invasive exploration (pre -exploration permits being granted) |
Stage 2 | 20% | 24% | 95,153,846 shares in Cadence | 57,692,308 shares in Cadence | On grant of exploration permits - acquisition of Lithium Technologies and Lithium Supplies shares |
Stage 3 | 7.5% | 31.5% | £0.15 M | £0.15 M | Earn - in on commencement of exploration works after grant exploration permits |
Stage 4 | 17.5% | 49% | £0.35 M | £0.35M | Earn - In on identification of suitable drill targets |
Stage 5 | 51% | 100% | 480,769,231 shares in Cadence | 192,307,692 shares in Cadence | 1-year option to acquire all the outstanding share capital of Lithium Technologies and Lithium Supplies |
The vendors of the assets will retain a 1.5% net smelter royalty on products produced from the assets. The royalty will be deferred and only become payable upon the repayment of the capital and any debt associated with establishing a mineral processing facility.
For further information, please contact.
Cadence Minerals plc +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker) +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Hannam & Partners LLP (Joint Broker) +44 (0) 207 907 8500
Neil Passmore
Giles Fitzpatrick
Square1 Consulting +44 (0) 207 929 5599
David Bick
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.
About Cadence Minerals:
Cadence is dedicated to smart investments for a greener world. The planet needs rechargeable batteries on a global scale - upcoming supersized passenger vehicles, lorries and buses - require lithium and other technology minerals to power their cells. Cadence is helping find these minerals in new places and extracting them in new ways, which will meet the demand of this burgeoning market. With over £20 million vested in key assets globally, Cadence is helping us reach tomorrow, today.
Cadence invests across the globe, principally in lithium mining projects. Its primary strategy is taking significant economic stakes in upstream exploration and development assets within strategic metals. We identify assets that have strategic cost advantages that are not replicable, with the aim of achieving lower quartile production costs. The combination of this approach and seeking value opportunities allows us to identify projects capable of achieving high rates of return.
The Cadence board has a blend of mining, commodity investing, fund management and deal structuring knowledge and experience, that is supported by access to key marketing, political and industry contacts. These resources are leveraged not only in our investment decisions but also in continuing support of our investments, whether it be increasing market awareness of an asset, or advising on product mix or path to production. Cadence Mineral's goal is to assist management to rapidly develop the project up the value curve and deliver excellent returns on its investments.
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