Cadence Minerals to invest in former Anglo American Iron Ore mine
told investors today it has entered into a binding investment agreement to acquire an interest in the former Anglo American and Cliffs Natural Resources Amapá Iron Ore Mine.
The Amapá Project is a large-scale open pit iron ore mine an associated railway, private port, and beneficiation facilities located in the Amapá state, north-east, Brazil.
The mine has a total historic mineral resource of an estimated 348 million tonnes of ore at @38.9% iron content.
Anglo American sold it in 2012, valuing its 70% stake at $462m. During its operation the mine generated an operating profit of up to $171 million annually.
The agreement will see Cadence invest $6 million over two stages to acquire up to 27% of a joint venture company Pedra Branca Alliance Pte. Ltd with Indo Sino.
If Indo Sino seek further investors or an investment in the Joint Venture, the agreement also provides Cadence with a first right of refusal to increase its stake to 49%.
The investment is conditional on some material pre-conditions, namely the grant of key operating licences and the release of bank securities over the asset.
In the annual report of the company, Andrew Suckling, Non Executive Chairman said that he “believes the Amapa Iron Ore opportunity to be transformational at a critical time in the Iron Ore market”
The binding agreement seems to be consistent with the company’s strategy of searching for stakes in assets that are unlisted but have a potential to bring attractive value to shareholders.
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