Cadence unveils accelerates production plan for Amapa
By Josh White
Date: Friday 27 Jun 2025
(Sharecast News) - Cadence Minerals unveiled an accelerated production plan for its Amapá Iron Ore Project in Brazil on Friday, alongside a fully subscribed equity placing that raised £0.4m.
The AIM-traded company said the staged development strategy was designed to fast-track production with low upfront capital costs.
It said the initial focus was on recommissioning the Azteca Plant, targeting annual production of about 380,000 tonnes of 65% iron ore concentrate from historic reverse float cell feed.
The plant previously operated successfully in 2012 producing 62% concentrate.
Pre-production capital expenditure was estimated at $3.5m, with an FOB cost of $37 per dry metric tonne and a CFR China cost of $79 per tonne.
Cadence said it was in discussions with an offtaker to fund both capital expenditure and working capital requirements for the Azteca Plant, aiming to minimise shareholder dilution.
At current benchmark prices of $103 per tonne CFR China, the operation was expected to generate a margin of $24 per tonne.
Production was expected to begin within three months of receiving the mining installation licence.
Free cash flow from the initial phase would be used to advance detailed engineering and support the recommissioning of a larger 5.5 million tonne per annum operation producing 67.5% direct reduction (DR) grade iron ore, including upgrades to the mine, beneficiation plant, rail, and port.
The project also had 28 million tonnes of historic tailings, which could supplement future production capacity.
"The staged development strategy at Amapá represents a transformational opportunity for Cadence," said chief executive Kiran Morzaria.
"With a low upfront capital requirement, competitive cost structure, and access to historic high-grade tailings, the project is poised to begin cash-generative operations within months of licence issuance."
Morzaria said the recommissioning of the Azteca Plant was a "critical first step" in the firm's strategy to unlock the full value of Amapá.
"The long-term goal remains clear: to build a 5.5 million tonne, high-grade iron ore operation capable of supplying the growing direct reduction pellet feed market."
At 1230 BST, shares in Cadence Minerals were up 1.2% at 1.52p.
Reporting by Josh White for Sharecast.com.
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