Cadence Minerals PLC (AIM:KDNC) has announced a significant reduction in mining costs at the Amapá iron ore project in northern Brazil. Following a re-quotation from one of the country’s largest contractors, mining costs fell 36.7% from US$17.65 per dry metric tonne to US$11.17.
The company said this brings overall Free on Board costs down 19.2% to US$27.28 per tonne.
As a result, annual savings are estimated at US$33.3 million, with total savings of about US$500 million across the life of the mine.
The updated cash cost on a Cost and Freight basis is now US$55.46 per tonne.
“These revised mining costs represent a major improvement in the economics of the Amapá Project. With a CFR cost base of just over US$55 per tonne, we believe Amapá is positioned among the lowest-cost iron ore operations globally,” said Kiran Morzaria, chief executive of Cadence Minerals.
Cadence holds a 35.1% stake in the fully integrated Amapá project.
In London, Cadence shares were up just over 8% changing hands at 1.95p.