TIDMKDNC
RNS Number : 2259Z
Cadence Minerals PLC
13 December 2017
Cadence Minerals Plc
("Cadence Minerals", "Cadence" or "the Company")
Feasibility Study Estimates Net Present Value of US$1.25 Billion
for the Sonora Lithium Project
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to
announce that Bacanora Minerals Ltd ('Bacanora') has today
published a summary of the Feasibility Study ("FS") for the Sonora
Lithium Project (the"Project" or "Sonora") in Mexico. The results
confirm the positive economics and favourable operating costs of a
35,000 tonnes per annum ("tpa") battery grade Li(2) CO(3)
operation. The FS estimates a pre-tax project Net Present Value
("NPV") of US$1.253 billion at an 8% discount rate and an Internal
Rate of Return ("IRR") of 26.1%, and Life of Mine ("LOM") operating
costs of US$3,910/t of lithium carbonate ("Li(2) CO(3) ").
Following the results of the FS, Bacannora intends to progress
the Sonora Lithium Project through the development stages over the
next 24 months with the detailed design engineering phase currently
scheduled for late Q1 2018.
The full Bacanora announcement can be found at: Bacanora
Minerals Feasibility Study
Highlights from the Bacanora release:
Two stage open-pit operation at Sonora: Stage 1 - 17,500 tpa for
4 years; Stage 2 - 35,000 tpa
-- Estimated Project pre-tax IRR of 26.1%; NPV of US$1.253
billion (at 8% discount rate) with a simple Stage 1 project payback
of four years. Revenues are based on a flat US$11,000/t for battery
grade Li(2) CO(3) over LOM, significantly below the current Li(2)
CO(3) price range of US$12,000 - 20,000/t
-- Low estimated LOM operating costs of US$3,910/t of Li(2)
CO(3) - lower than the new lithium brine operations being reported
in Argentina
-- Average LOM annual earnings before interest, taxes,
depreciation and amortisation ("EBITDA") estimated at US$229
million per annum
Sonora: a large lithium deposit
-- Measured plus Indicated Mineral Resource estimate of over 5
million tonnes ("Mt") (comprising 1.9 Mt of Measured Resources and
3.1Mt of Indicated Resources) of lithium carbonate equivalent
("LCE")and an additional Inferred Mineral Resource of 3.7 Mt of
LCE
-- Low stripping ratio: open-pit mine design indicates a total
of 37.1 Mt of ore to be mined over the planned 19-year mine life
with an average stripping ratio of approximately 3.4:1 over LOM
Conventional flow sheet: uses established sulphate route
processing technology
-- Integrated plant designed to initially process 1.1Mt of ore
per year during Stage 1, subsequently increasing to 2.2 Mt per year
for Stage 2
-- Stage 1 capital cost estimate of US$420 million includes -
mining, processing plant, infrastructure, construction of Tailings
Management Facility ("TMF"), general administration costs as well
as the requisite contingencies
-- Potential to sell up to 30,000 tpa of potassium sulphate
("SOP", "K(2) SO(4) ") for sale to the Mexican fertiliser
industry
Next Steps: advance Sonora towards production to satisfy
expected continuing growth in demand for lithium driven by growing
sectors such as electric vehicles and energy storage
Subject to Bacanora board approval and other key milestone
events, project detailed design is expected to commence in late Q1,
2018.
Kiran Morzaria, Chief Executive Officer of Cadence,
commented:
"These results confirm the potential of the Sonora Project to
become a significant producer of battery grade lithium for the
emerging industries of electric cars and advanced energy storage.
Together with Bacanora's existing off take agreement, Bacanora is
now moving onto the development phases of the Project and we look
forward to its continued progress towards production."
The Sonora Lithium Project and Details of Cadence's
ownership:
Cadence Minerals holds approximately 9% of the equity in
Bacanora Minerals 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. These concessions form
part of the Sonora Lithium Project as assessed in the FS published
a Summary of which has been published today by Bacanora.
Megalit does not form part of the Sonora Lithium Project and
does not form part of the FS released by Bacanora.
The direct and indirect interests of Cadence in the Sonora
Lithium Project and other mineral concessions in the Sonora
province are as follows:
- La Ventana and La Ventana 1, which are 100 percent owned by
Minera Sonora Borax S.A. de C.V.("MSB"), a wholly-owned subsidiary
of Bacanora; Cadence, through its direct interest of approximately
9% of Bacanora, has an indirect interest in these concessions of
approximately 9%.
- El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions,
which are held by Mexilit S.A. de C.V. ("Mexilit"). Cadence has a
30% direct interest in Mexalit through its Joint Venture with
Bacanora, and when combined with Cadence's direct interest of
approximately 9% in Bacanora, has a total economic interest in
Mexalit of approximately 36%.
- Buenavista, San Gabriel and Megalit concessions, which are
held by Megalit S.A. de C.V. ("Meglait"). Cadence has a 30% direct
interest in Megalit through its Joint Venture with Bacanora, and
when combined with Cadence's direct interest of approximately 9% in
Bacanora, has a total economic interest in Megalit of approximately
36%.
- Ends -
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
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 GBP25 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
UPDTJBMTMBTBBRR
(END) Dow Jones Newswires
December 13, 2017 05:29 ET (10:29 GMT)
Cadence Minerals (LSE:KDNC)
Historical Stock Chart
From Apr 2024 to May 2024
Cadence Minerals (LSE:KDNC)
Historical Stock Chart
From May 2023 to May 2024