Cadence Minerals plc said its pre-feasibility study (PFS) confirmed the potential for high-grade iron ore concentrate production and strong returns over life of mine (LOM) at the Amapá iron ore project in northeast Brazil.
PFS
Wardell Armstrong International compiled the PFS which was managed by Pedra Branca Alliance Pte. Ltd, Cadence and Indo Sino Pte Ltd.
Cadence holds a 30% interest in Pedra Branca and a 30% interest in Amapá.
RESULTS
The PFS showed annual average production of 5.28 million dry metric tonnes per annum (Mtpa) of Fe concentrate, comprising 4.36 Mtpa at 65.4% Fe and 0.92 Mtpa at 62% Fe concentrate.
Profit after tax could be US$2.96 billion over LOM gross revenues of $9.39b.
The inaugural ore reserve is expected to be 195.8 million tonnes (Mt) at 39.34% Fe, demonstrating an 85% mineral resource conversion.
Cadence said that there were also exploration opportunities at the Tucano mine to extend further the initial mine life and potential capital savings at port loading facilities.
PROGRAMME
The company said that initial works would include optimising the capital expenditure, processing plant availability and efficiency.
Additionally, adjacent exploration targets would be developed to increase the mine life, after which work on a feasibility study could begin.
FINANCIAL INVESTMENT DECISION
Chief executive Kiran Morzaria added that the PFS re-enforced Cadence’s analysis that the Amapá project could be regenerated and restarted on a profitable basis over an initial 16-year mine life.
“The project benefits from integrated infrastructure under the owner’s control, a well-established processing route, low capital intensity and a quality product with an international reputation.
“Along with a skilled workforce, proximity to operational infrastructure and the potential to increase the mineral resource means that Amapá remains an incredibly attractive investment opportunity.
“The opportunity for DEV is to advance the Amapá iron ore project to a financial investment decision.
“This could be completed along with securing a strategic investor, offtake partner, separate listing, or a combination of these options.
“However, we recognise that there is still much work to complete at Amapá, which will ultimately deliver a feasibility study.”