Cadence Minerals (LON: KDNC) said that the sale and shipment of the second batch of iron ore from Amapa have been completed, causing a rally in its share price.
Cadence Minerals shares are currently trading at 29p, up 6.39% on the day.
In an operational update on the Amapa Iron Ore Project in Brazil, the AIM-listed firm stated that shipping continues at pace with DEV Mineração S.A. (DEV) having shipped and sold the second batch of iron ore from the stockpiles.
The company also completed the loading of 48,670 wet tonnes of iron ore sinter fines (approximately 58% Fe) at Companhia Docas de Santana in record time (60 hours), which bodes well for DEV's plan to increase the frequency of shipping from CDSA over the coming months.
R$7.5 million has been deposited into the judicial account to be utilised to pay ex-employees and small creditors, while the remainder of the profit from the first shipment is being used as per an approved court petition, which stated that it would pay outstanding claims from former employees and small creditors from the net profit of the sale of the iron ore stockpile.
KPMG Brazil will manage the payments to the creditors, and once fully paid, it will mark the completion of a crucial step in the company's Judicial Restructuring Plan.
Concerning the recommissioning of the Amapa Project, Cadence said vital personnel have been engaged. A new head of shipping operations is now responsible for the efficient and safe movement of the iron ore shipments.
The company is also working on the reinstatement of critical concessions and operational licenses, focusing on the reinstatement of DEV's private port concession. According to its statement, DEV, IndoSino, and Cadence have engaged with the relevant authorities, highlighting the macroeconomics and the local and regional importance of the Amapa Project.
In September 2020, Cadence announced that itself, DEV, and Indo Sino had agreed in principle to settlement terms proposed by secured bank creditors. The company said investors and DEV remain in constant communication with the Bank Creditors and all parties are aligned to finalise the agreement.
If the settlement agreement is completed, it would represent the satisfaction of Cadence's remaining major precondition to make its initial 20% investment in the Amapa Project. Cadence stated that “upon completing the conditions and the release of the Cadence escrow monies, Cadence will become a 20% shareholder in the Amapa Project via our joint venture company, which will own 99.9% of DEV.
“After this, Cadence will invest a further US$3.5 million to increase its stake to 27% in the Amapa project.”
Cadence CEO Kiran Morzaria said: “We are pleased and proud that the sale and shipment of the second batch of iron ore from Amapa has completed so quickly. That the customer is once again one of the world's largest globally diversified natural resource companies is a clear signal that Amapa is very much back in business, with keen demand for its product.”
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