Cadence Minerals PLC (LON:CNC) chief executive, Kiran Morzaria, provided an upbeat assessment of the potential of the Amapá iron ore project in Brazil after the green light was given to begin high-grade exporting stockpiled material to China.
Shipments are likely to start in “late Q2, early Q3”, he confirmed, adding: “We are in advanced discussions with off-takers and contractors, including the local port authorities and trucking companies.”
Speaking to Proactive’s Andrew Scott earlier, Morzaria said the former Anglo American and Cliffs Natural Resources mine, which is in the north of the country, had been “substantially de-risked”.
He pointed out the formerly producing operation comes complete with a rail spur and port – two pieces of infrastructure than can add significant costs to a project such as Amapá.
“Yes, it all requires some rehabilitation,” he added. “But it’s de-risked technically and has a product that was well-liked in China.”
Mineral resource investor Cadence has US$2.5mln sitting in escrow which it will hand over for a 20% stake in Amapá once the last of its pre-conditions is met. This requires a settlement to be reached with the secured bank creditors.
Amapá is host to 1.39 Mt ore in three stockpiles with an average grade of just over 62%. The proceeds from sales will help bring the mine back into production.
The project, which was shuttered in 2012, produced 6.1 Mt of iron ore concentrate.