Cadence signs terms to fund restart of Azteca plant in Brazil

LONDON - Cadence Minerals Plc (AIM:KDNC) has signed a Heads of Terms agreement with an international shipping and trading group to fund the restart of the Azteca Plant at the Amapá Iron Ore Project in Brazil, according to a statement released by the company on Tuesday.

The agreement will provide US$4.6 million in funding through a pre-payment offtake structure, with Cadence contributing approximately 10-15% of the total amount. The funding will be used to license, refurbish, and restart the plant, as well as provide initial working capital.

The Azteca Plant is expected to produce around 380,000 tonnes per annum of 65% Fe concentrate, using approximately 2 million tonnes of high-grade tailings material from Dyke 5 as feedstock.

According to the company, the plant is projected to have operating costs of US$37 per tonne on a Free on Board basis and US$79 per tonne Cost and Freight into China, compared to current market prices of around US$120 per tonne.

The funding will be provided in two components: US$3.45 million for plant financing and US$1.15 million for working capital. Cadence estimates the structure will deliver approximately 70% Internal Rate of Return on its investment share, with repayments made per tonne of iron ore shipped.

The company stated that once operational, the Azteca Plant is forecast to be cash flow positive from the first shipment, providing financial support for the development of the larger 5.5 million tonnes per annum Direct Reduction-grade project at Amapá.

First production from the Azteca Plant is anticipated around three months after license issuance, pending completion of remaining studies and permits.

Cadence currently holds a 35.7% equity stake in the Amapá Project, representing a total investment of approximately US$15.5 million as of the end of June 2025.

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