17:45 Fri 27 Sep 2019
Cadence Minerals PLC - Interim results for the period ended 30 June 2019
("Cadence Minerals", "Cadence" or "the Company")
Interim Results for the six months ended
HIGHLIGHTS
· Cadence entered into an investment agreement to acquire up to 27% of the
· Before its sale in 2012 Anglo American valued (impaired) its 70% stake in the
· During its operation, the mine generated an annual operating profit of up to U$171 million (100%).
· The total historic mineral resource contains an estimated 348 million tonnes ("Mt") of ore @ 38.9% iron content ("Fe").
· Macarthur Minerals (Cadence equity ownership approx. 9%) refocused efforts on their iron ore assets and secured a binding Life-Of-Mine Off-Take Agreement with
· European Metals (Cadence equity ownership approx. 19%) published a pre-feasibility study for the production of lithium hydroxide, increasing the net present value of the project 105% to
INVESTMENT REVIEW
In June this year Cadence Minerals entered into a binding investment agreement ("the Agreement") with
The Amapá Project is a large-scale iron open pit ore mine with associated rail, port and beneficiation facilities and commenced operations in
A summary of the asset is as below:
· Before its sale in 2012 Anglo American valued its 70% stake in the Amapá Project at
· During its operation, the mine generated an annual operating profit of up to U$171 million (100%)
· The total historic mineral resource contains an estimated 348 million tonnes ("Mt") of ore @ 38.9% iron content ("Fe")
· The ore is beneficiated to 65%
· 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
· Subject key preconditions being met, the planned shipment of a 1.39 million tonne stockpile is scheduled to commence in
· Potential for the mine and existing infrastructure to be brought to market swiftly with mining and processing anticipated to restart in 2021 subject to the grant of the necessary permits, regulatory consents and project financing.
To acquire its 27% interest, Cadence will invest
Our investment is conditional on several key preconditions the first is the approval of the judicial restructuring plan ("JRP"), which was completed at the end of August. Once the remaining pre-conditions relating to the reinstatement of a concession on the railway licenses and bank creditor arrangements have been met, the
The approval of the JRP and the fulfilment of the preconditions outlined above will result in Cadence's and IndoSino's joint venture company
Cadence's next stage of investment will be a further investment of
As part of the JRP Amapá submitted an outline of an operational and financial plan that
· The total initial estimate of capital investment of approximately
· Rehabilitation to be completed by the end of 2021 with new production in 2022. Full production by 2024 of 5.3 million tonnes ("Mt") of iron ore per annum.
· At full production and using
· an average net revenue after shipping of
· and an average EBITDA of
European Metals Holdings Limited ("EMH")
Cadence has been investing in European Metals since
During the period EMH made significant progress. Drilling continued at the site with five of the eight-hole programme completed; this drilling programme was carried out to define the first two years of mining within the Cinovec-south area. The results of this programme have either been in line with or exceeded, EMH's expectations particularly with regard to the tin intercepts.
In addition to the drilling results, EMH published a pre-feasibility study on producing battery-grade lithium hydroxide for as an alternative to battery-grade lithium carbonate. The result significantly enhanced the forecast economics of the
Highlights of the study are: (all $ figures in this release are US Dollars and increases refer to the 2017 PFS Lithium Carbonate study):
· Net estimated overall cost of production post-credits:
· Project Net Present Value ("NPV") increases 105% to:
· Internal Rate of Return ("IRR") was increased 37% to 28.8% (post-tax)
· Total Capital Cost:
· Annual production of Battery Grade Lithium Hydroxide: 25,267 tonnes
· Studies are based on only 9.3% of reported Indicated Mineral Resource and a mine life of 21 years processing an average of 1.68 Mtpa ore
· The process used to produce lithium hydroxide allows for the staging of lithium carbonate and then lithium hydroxide production to minimise capital and startup risk and enables the production of either battery-grade lithium hydroxide or carbonate as markets demand
After the period end, EMH entered into an agreement with
Macarthur Minerals ("Macarthur")
Cadence holds approximately 9% of the equity in Macarthur. Macarthur has three iron ore projects in the Yilgarn region of
During the period Macarthur focused its efforts on its Iron Assets in
The main highlights for Macarthur over the period were:
· Opened an up to
· Binding Life-Of-Mine Off-Take Agreement with
· Macarthur entered into exclusive negotiation agreement with Aurizon for rail haulage services for the
· Infill drilling program planned for the Moonshine magnetite deposit
· Engineering firm
· Applications have been made for three additional prospective iron ore tenements. These were properties released by Cliffs Natural Resources and are adjacent to the iron ore operations of Mt Jackson and Deception Mines
Bacanora Lithium Plc ("Bacanora")
At the period end Cadence owned less than one per cent of Bacanora's equity and a 30% stake in the
Bacanora has two lithium development assets, the
Bacanora's principal asset is the
Bacanora continued to progress the strategic investment by Ganfeng Lithium Co., Ltd. ("Ganfeng") during the period and signed the investment agreement at the end of
· Cornerstone strategic investment of 29.99% in Bacanora for
· Project level investment of 22.5% in
· Additional long-term offtake at a market-based price per tonne
· Gangfeng will complete a review within six months of the EPC engineering design and capital costs of
· Gangfeng will provide a plant and process commissioning team to assist Bacanora in delivering first production in 2021
At the time of publishing Ganfeng was awaiting final approval from Chinese authorities to make its investment.
Cadence owns a 30% free carried interest in the Yangibana North, Gossan, Hook, Kanes Gossan, Lions Ear and Bald
A considerable amount of work over this period has been to define the geological resource and reserves, optimise the process flow, carry out detailed design and engineering work required for the setting up of a process plant, negotiations on equipment supply and no less crucial securing project finance. An early works permit was granted which allowed the initiation of infrastructure work and bring on-site a 340 rooms accommodation camp ready for occupation when mine construction commences.
On geology, there was a 34% increase in probable ore reserves to 10.35 million tonnes at 1.22% TREO including 0.43%Nd2O3+Pr6O11, supporting an initial 11 years operational life for the project based on the JORC certified resource of 21.7 million tonnes.
The current mine plan and production targets set out by the operator incorporates 10.35 million tonnes of Probable Ore Reserves, of which 1.96 million tonnes is part our joint venture asset, Yangibana North, which according to the operator's production targets are scheduled to be mined from year 8 to year 14. These production targets include indicated mineral resources, hence the longer mine life.
Lithium Assets in
In March this year Cadence announced that it has agreed to acquire three highly prospective assets in
Highlights of the assets include:
· The acquisition covers three projects - Picasso (
·
· Demonstrating exploration upside for Picasso, the
Preliminary exploration work was concluded in April with positive results, and Cadence increased its stake from 4% to 24%. Early exploration work will begin soon to test and sample targets that have been identified during the preliminary exploration.
Other Investments
Cadence also retains equity positions in Sagon Resources Ltd (formerly
FINANCIAL REVIEW
During the period, the Group made a loss before taxation of
There was a weighted basic loss per share of 0.003p (
Administrative expenses decreased by
The total assets of the group increased from
It is important to note that this does not include our investment in EMH. Our investment in EMH is classified as an investment in an associate and held at a value of
Our borrowings of
During the period, our net cash outflow from operating activities was
For further information, please contact |
|
|
|
|
+44 (0) 207 440 0647 |
|
|
|
|
|
|
|
+44 (0) 207 220 1666 |
|
|
|
|
|
|
|
+44 (0) 207 399 9400 |
|
|
CADENCE
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED
|
Notes |
Unaudited Period ended |
|
Unaudited Period ended |
|
Audited Year ended |
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
Income |
|
|
|
|
|
- |
Unrealised profit/(loss) on assets held for sale |
|
1,118 |
|
(3,730) |
|
(7,440) |
Realised (loss)/profit on assets held for sale |
|
(264) |
|
105 |
|
(1,967) |
Other income |
|
4 |
|
48 |
|
140 |
|
|
858 |
|
(3,577) |
|
(9,267) |
|
|
|
|
|
|
|
Share based payments |
|
- |
|
(3) |
|
(7) |
Other administrative expenses |
|
(672) |
|
(785) |
|
(1,559) |
Total administrative expenses |
|
(672) |
|
(788) |
|
(1,566) |
|
|
|
|
|
|
|
Operating profit/(loss) |
|
186 |
|
(4,365) |
|
(10,833) |
|
|
|
|
|
|
|
Share of associates losses |
|
(274) |
|
(182) |
|
(555) |
Finance cost |
|
(197) |
|
(59) |
|
(377) |
(Loss)/profit before taxation |
|
(285) |
|
(4,606) |
|
(11,765) |
|
|
|
|
|
|
|
Taxation |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
(Loss)/profit attributable to the equity holders of the Company |
|
(285) |
|
(4,606) |
|
(11,765) |
|
|
|
|
|
|
|
Other comprehensive income/(expenditure) |
|
|
|
|
|
|
Foreign currency translation differences |
|
47 |
|
(53) |
|
(150) |
Other comprehensive income/(expenditure) for the period net of tax |
|
47 |
|
(53) |
|
(150) |
|
|
|
|
|
|
|
Total comprehensive expenditure for the period |
|
(238) |
|
(4,659) |
|
(11,915) |
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
Basic (pence per share) |
3 |
(0.003) |
|
(0.059) |
|
(0.150) |
Diluted (pence per share) |
3 |
(0.003) |
|
(0.051) |
|
(0.145) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED
|
Share capital |
Share premium account |
Share-based payment reserve |
Hedging, Loan & Exchange reserves |
Retained earnings |
Total equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
Balance at |
1,202 |
27,552 |
3,178 |
337 |
(5,545) |
26,724 |
Share based payments |
- |
- |
3 |
- |
- |
3 |
Transfer on lapse of warrants |
- |
- |
(132) |
- |
132 |
- |
Transactions with owners |
- |
- |
(129) |
- |
132 |
3 |
Foreign exchange |
- |
- |
- |
(53) |
- |
(53) |
Profit for the period |
- |
- |
- |
- |
(4,606) |
(4,606) |
Total comprehensive loss for the period |
- |
- |
- |
(53) |
(4,606) |
(4,659) |
Balance at |
1,202 |
27,552 |
3,049 |
284 |
(10,019) |
22,068 |
Share based payments |
- |
- |
4 |
- |
- |
4 |
Transfer on lapse of warrants |
- |
- |
(1,661) |
- |
1,661 |
- |
On settlement of loan notes |
- |
- |
|
(412) |
|
(412) |
Transactions with owners |
- |
- |
(1,657) |
(412) |
1,661 |
(408) |
Foreign exchange |
- |
- |
- |
(97) |
- |
(97) |
Loss for the period |
- |
- |
- |
- |
(7,159) |
(7,159) |
Total comprehensive loss for the period |
- |
- |
- |
(97) |
(7,159) |
(7,256) |
Balance at |
1,202 |
27,552 |
1,392 |
(225) |
(15,517) |
14,404 |
Issue of share capital |
232 |
2,668 |
- |
- |
- |
2,900 |
Costs of share issue |
- |
(105) |
- |
- |
- |
(105) |
Transactions with owners |
232 |
2,563 |
- |
- |
- |
2,795 |
Foreign exchange |
- |
- |
- |
47 |
- |
47 |
Loss for the period |
- |
- |
- |
- |
(285) |
(285) |
Total comprehensive loss for the period |
- |
- |
- |
47 |
(285) |
(238) |
Balance at |
1,434 |
30,115 |
1,392 |
(178) |
(15,802) |
16,961 |
STATEMENT OF FINANCIAL POSITION
AS AT
|
|
Unaudited |
|
Unaudited |
|
Audited |
|
30 June 2019 |
|
30 June 2018 |
|
31 December 2018 |
|
|
|
|
|
|
|
|
Assets |
Notes |
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
Non-current |
|
|
|
|
|
|
Intangible assets |
|
2,438 |
|
1,875 |
|
2,172 |
Investment in associate |
|
12,170 |
|
12,918 |
|
12,483 |
|
|
14,608 |
|
14,793 |
|
14,655 |
Current assets |
|
|
|
|
|
|
Trade and other receivables |
|
1,919 |
|
461 |
|
315 |
Assets held for sale |
|
2,330 |
|
9,946 |
|
2,895 |
Cash and cash equivalents |
|
536 |
|
216 |
|
468 |
Total current assets |
|
4,785 |
|
10,623 |
|
3,678 |
|
|
|
|
|
|
|
Total assets |
|
19,393 |
|
25,416 |
|
18,333 |
|
|
|
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
|
372 |
|
290 |
|
223 |
Borrowings |
|
2,060 |
|
3,058 |
|
3,706 |
Total current liabilities and total liabilities |
|
2,432 |
|
3,348 |
|
3,929 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Share capital |
4 |
1,434 |
|
1,202 |
|
1,202 |
Share premium |
|
30,115 |
|
27,552 |
|
27,552 |
Share based payment reserve |
|
1,392 |
|
3,049 |
|
1,392 |
Hedging & Exchange reserve |
|
(178) |
|
284 |
|
(225) |
Retained earnings |
|
(15,802) |
|
(10,019) |
|
(15,517) |
|
|
|
|
|
|
|
Total equity and liabilities |
|
|
|
|
|
|
to owners of the company |
|
16,961 |
|
22,068 |
|
14,404 |
|
|
|
|
|
|
|
Total equity and liabilities |
|
19,393 |
|
25,416 |
|
18,333 |
|
|
|
|
|
|
|
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD
|
|
Unaudited Period ended |
|
Unaudited Period ended |
|
Audited Year ended |
|
|
|
|
|
|
31 December 2018 |
|
|
|
|
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
Cash flows from operating activities |
|
|
|
|
|
|
Operating profit/(loss) |
|
186 |
|
(4,365) |
|
(10,833) |
Net realised/unrealised profit on assets held for sale |
|
(854) |
|
3,625 |
|
9,407 |
Equity settled share-based payments |
|
- |
|
3 |
|
7 |
Decrease/(increase) in trade and other receivables |
|
(4) |
|
261 |
|
407 |
Increase/(decrease) in trade and other payables |
|
149 |
|
28 |
|
(39) |
Net cash outflow from operating activities |
|
(523) |
|
(448) |
|
(1,051) |
|
|
|
|
|
|
|
Taxation |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Payments for investments in assets held for sale |
|
- |
|
(476) |
|
(523) |
Receipts on sale of assets held for sale |
|
1,419 |
|
438 |
|
1,755 |
Receipts from sale of/(payments for) investments in associates |
|
39 |
|
- |
|
(50) |
Investment in exploration costs |
|
(266) |
|
(100) |
|
(325) |
Net cash outflow from investing activities |
|
1,192 |
|
(138) |
|
857 |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Proceeds from issue of share capital |
|
1,300 |
|
- |
|
- |
Share issue costs |
|
(105) |
|
- |
|
- |
Net (loan repayments)/borrowings |
|
(1,599) |
|
(1,176) |
|
(998) |
Finance cost |
|
(197) |
|
(59) |
|
(377) |
Net cash inflow from financing activities |
|
(601) |
|
(1,235) |
|
(1,375) |
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
68 |
|
(1,821) |
|
(1,569) |
Cash and cash equivalents at beginning of period |
|
468 |
|
2,037 |
|
2,037 |
Cash and cash equivalents at end of period |
|
536 |
|
216 |
|
468 |
NOTES TO THE INTERIM REPORT
FOR THE PERIOD ENDED
1 BASIS OF PREPARATION
The interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention. The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended
The principal accounting policies of the Group are consistent with those detailed in the
GOING CONCERN
The Directors have prepared cash flow forecasts for the period ending
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results
2 SEGMENTAL REPORTING
An operating segment is a distinguishable component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group's chief operating decision maker to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available.
The chief operating decision maker reviews financial information for and makes decisions about the Group's performance as a whole. The Group has not actively traded during the period.
Subject to further acquisitions the Group expects to further review its segmental information during the forthcoming financial year.
3 PROFIT PER SHARE
The calculation of the loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.
|
Unaudited |
|
Unaudited |
|
Audited |
|
six months ended |
|
six months ended |
|
year ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
(Loss)/profit on ordinary activities after tax (£'000) |
(285) |
|
(4,606) |
|
(11,765) |
|
|
|
|
|
|
Weighted average number of shares for calculating basic loss/profit per share |
8,335,217,332 |
|
7,851,440,338 |
|
7,851,440,338 |
Share options and warrants exercisable |
280,000,000 |
|
1,259,575,345 |
|
280,000,000 |
Weighted average number of shares for calculating diluted loss/profit per share |
8,615,217,332 |
|
9,111,015,683 |
|
8,131,440,338 |
|
|
|
|
|
|
Basic loss per share (pence) |
(0.003) |
|
(0.059) |
|
(0.150) |
Diluted loss per share (pence) |
(0.003) |
|
(0.051) |
|
(0.145) |
4 SHARE CAPITAL
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
|
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
Allotted, issued and fully paid |
|
|
|
|
|
173,619,050 deferred shares of 0.24p ( |
417 |
|
417 |
|
417 |
10,172,652,446 ordinary shares of 0.01p ( |
1,017 |
|
785 |
|
785 |
|
1,434 |
|
1,202 |
|
1,202 |
This information is provided by RNS, the news service of the
The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of...
FOR OUR FULL DISCLAIMER CLICK HERE