Cadence Minerals plc announced that pre-feasibility studies (PFS) had started at the Amapá iron ore project in northeast Brazil.
PROCESSING PLANT AND RAILWAY
The company, working alongside DEV Mineração S.A . and Indo Sino Pty Ltd, has also made progress on the redevelopment of Amapá in several key areas.
DEV commissioned the PFS on the rehabilitation of the beneficiation and processing plant.
This will include reviewing the power supply options for the mine and plant, particularly the possibility of connecting to the grid network, enabling the mine and plant to be powered predominantly by lower-cost renewable energy.
A PFS is also being conducted on the 193km railway and associated infrastructure between Pedra Branca and DEV’s port at Santana.
The locomotive and rolling stock requirements for the mine will also be reviewed and costs calculated.
In the coming months, DEV is expected to appoint a consulting and engineering firm to start work on the port studies and a geotechnical investigation of the mine.
OTHER WORK
Other progress includes the jack-up rig at Santana port currently being righted and recovered.
Maintenance of the tailings dam, which began at the start of 2021, continues and will involve monitoring, geotechnical stability testing and compliance with statutory reporting.
This will ensure that the current dams will be suitable for future operations in accordance with Brazil’s more stringent regulatory environment.
EXPORTS
DEV has been working with Companhia Docas de Santana (CDSA) to load two 45,000 ton vessels simultaneously with iron ore for the first time.
Exports of sufficient iron ore to realise a total $20m profit are allowed from the Amapá stockpiles at the port ($10m on each occasion).
Cadence said that a portion of the funds was being used to redevelop Amapá, including commissioning studies, capital projects and working capital.
AMAPA IRON PROJECT
The project is a large-scale iron open pit ore mine with associated rail, port and beneficiation facilities.
Operations began in December 2007 and production increased to 4.8Mt and 6.1Mt of iron ore concentrate product in 2011 and 2012 respectively.
In early September 2020, investors DEV, Cadence and Indo Sino agreed in principle to the settlement terms proposed by bank creditors.
The execution of a settlement agreement would mean Cadence satisfying the remaining major precondition to make its initial 20% investment in Amapá.
On completion of the conditions and the release of the Cadence escrow monies, the company will hold 20% in the project via its joint venture company, which will own 99.9% of DEV.