Cadence revises Amapa costs downwards, shares pop
By Josh White
Date: Monday 18 Aug 2025
(Sharecast News) - Cadence Minerals said on Monday that a reassessment of mining costs at its Amapá iron ore project in northern Brazil had delivered a material reduction in operating expenses, positioning the project among the lowest-cost producers globally.
Mining costs had been cut by 36.7% to $11.17 per dry metric tonne (DMT) from $17.65 per DMT following a new quotation from one of Brazil's largest mining contractors.
As a result, free on board (FOB) costs had fallen 19.2% to $27.28 per DMT, while cost and freight (CFR) cash costs have been reduced to $55.46 per DMT.
The AIM-traded firm said the changes equated to estimated savings of $33.3m per year, or around $500m over the life of mine.
"These revised mining costs represent a major improvement in the economics of the Amapá Project," said chief executive Kiran Morzaria.
"With a CFR cost base of just over $55 per tonne, we believe Amapá is positioned among the lowest-cost iron ore operations globally.
"Importantly, these savings are based on the production plan for a premium DR-grade iron ore product, which is expected to capture higher market pricing than standard 62% Fe products.
"This combination of low costs and premium pricing potential delivers significant annual and life-of-mine savings, strengthens our competitiveness, and further de-risks the project as we progress towards development."
Cadence said the revised costs followed the updated pre-feasibility study published in December, which outlined a 15-year life of mine producing 5.5 million tonnes per annum of 67.5% iron direct reduction grade concentrate.
The company holds a 35.1% equity interest in Amapá, which includes an integrated mine, rail, port and beneficiation plant.
Against the global cost curve, Cadence said Amapá's updated CFR cost base compared favourably with major producers, sitting below Rio Tinto's Pilbara costs of about $58 to $60 per DMT and Vale's Northern System at roughly $60 per DMT.
The company added that the new cost profile reflected the project's low strip ratio of 0.4-to-one and limited blasting requirements, with only around a quarter of ore needing blasting.
At 1519 BST, shares in Cadence Minerals were up 15.28% at 2.08p.
Reporting by Josh White for Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN