Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that our joint venture company Pedra and Branca Alliance ('PBA') and DEV Mineracao S.A. ('DEV') have entered into a memorandum of understanding ('MOU') with Sinoma Tianjin Cement Industry Design & Research Institute Co., Ltd. a wholly owned subsidiary of Sinoma International Engineering Co., Ltd. ('TCIDR').
Through its wholly owned subsidiary, DEV, PBA owns and operates the Amapa Iron Ore Project in Brazil ('Amapa Project').
The MOU is the result of our ongoing discussions between the parties to progress the development of the Amapa Project jointly.
Development Programme
Under the MOU, TCIDR will provide a final proposal to complete the Definitive Feasibility Study ('DFS'), and on completion of a successful DFS, will submit a fixed price Engineering Procurement and Construction ('EPC') contract for the Amapa Project. The DFS, EPC contact and any other services provided by TCIDR are subject to both the services being provided on a competitive basis and to PBA's and DEV's commercial evaluation and approval. TCIDR will be appointed the General EPC contractor for the Amapa Project once these approvals have been granted and the provision of TCIDR-facilitated project financing is secured. This will require the execution of legally binding documents.
Project Financing
Under the MOU, TCIDR will use its best commercial efforts to secure the required financing for the construction and re-development of the Amapa Project, including the necessary guarantees, project finance insurance and debt financing. In this regard, TCIDR is in discussion with SinoSure China Export & Credit Insurance Corporation and China Development Bank.
PBA, DEV and TCIDR will now develop a roadmap to seek to secure the financing for the DFS and subsequent project financing for the Amapa Project, and a fixed price EPC contract between DEV and TCIDR that will have the project finance, export credit insurance and credit support by TCIDR.
Cadence Increase in Ownership in the Amapa Project
Up to the end of September 2023, Cadence's total investment in the Amapa Project stood at approximately US$12.1 million; as a result, Cadence's equity stake in the project has increased to 32.6%.
Cadence Chairman Andrew Suckling commented: 'This Cadence Minerals management team, of which I am proud to be part, have worked tirelessly with PBA and DEV, local Government and contractors to bring Amapa to this point. Investments of this nature are rarely straightforward, but our management and shareholders are now starting to see a tangible return from bringing this large and complex infrastructure back to life. Along with Kiran, I have witnessed firsthand the rejuvenating effect the recommissioning process has had on the region and community, and now, with this MOU, there is a real sense that we can re-develop this project back to its name plate capacity.
Cadence CEO Kiran Morzaria added: 'From a strategic standpoint, for Cadence and PBA, the MOU with TCIDR represents a potential one-stop shop solution, coupling our requirements for final project funding with engineering, construction and technical expertise. Following this, our next steps will be the completion of the remaining optimisation studies followed by the DFS.'
'Our investment to date has resulted in an increased shareholding, which now stands at 32.6%, and I am both pleased and proud that having first submitted a judicial restructuring plan to creditors in 2019, we are now making rapid progress. I and my colleagues look forward to the completion and recommissioning of this substantial project.'
About the Amapa Iron Ore Project
The Amapa Project is a brownfield integrated iron ore project in the Amapa State of Brazil. It has Mineral Resources of 276 million tonnes (Mt) at 38.33% Iron (Fe) and Ore Reserves of 196 Mt at 39.34%. The project consists of the mine, processing plant, wholly owned port and a 194km railway, all of which will be operated by DEV. A Pre-Feasibility Study ('PFS') was published in January 2023. The PFS delivered a Post-tax Net Present Value of US$949 million ('M') at a discount rate of 10% and a post-tax Internal Rate of Return of 34%, with an average annual life of mine EBITDA of US$235 M annually. After ramp-up, the planned yearly average production will be 5.7 million wet metric tonnes per annum ('Mtpa') of Fe concentrate, consisting of 4.7 Mtpa at 65.4% Fe and 1 Mtpa at 62% Fe concentrate.
About Sinoma Tianjin Cement Industry Design & Research Institute Co., Ltd
TCIDR is a wholly owned subsiduairy of SINOMA International Engineering Co., Ltd. ('SINOMA International') is the technology and engineering platform under the Fortune Global 500 Group - China National Building Material Group Co., Ltd. It is also the world's leading service provider for cement technology, equipment and engineering system integration, a high-tech and technological innovation demonstration enterprise of China, as well as one of the 'Going Global' benchmarking enterprises recognized by the State-owned Assets Supervision and Administration Commission of the State Council.
In 2001, SINOMA International was established by integrating the quality assets of China's cement technology, equipment and engineering business. In 2005, it was listed on the Shanghai Stock Exchange (600970 SH). Through technology import, assimilation, and independent innovation, the company has developed and built a series of production lines starting from China's first production line with a daily output of 1,000 tons to the world's largest production line with a daily output of 14,000 tons.
Over the past 20 years, SINOMA International has positioned itself as an 'innovative, international and value-oriented' company, SINOMA International has so far won contracts for nearly 300 cement productions lines in more than 80 countries .
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Cautionary and Forward-Looking Statements
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SINOMA INTERNATIONAL ENGINEERING CO.,LTD 
