18th Jun 2019 15:52
(Alliance News) - Cadence Minerals PLC noted updates from two investees Tuesday - Toronto-listed MacArthur Minerals Ltd and Australian Securities Exchange-listed Auroch Minerals Ltd.
MacArthur, in which Cadence holds a 9.8% interest, received the results from a preliminary economic assessment on its 100%-owned Lake Giles iron ore project in Western Australia, showing that the project is "potentially economically viable" and further project development is "justified".
"The preliminary economic assessment undertaken by Macarthur on the Lake Giles iron ore project confirms quality, potential profitability and long term revenue potential for the Lake Giles iron ore project, driven, as the company points out, by a dramatic shift in high grade magnetite concentrate pricing," said Cadence Chief Executive Kiran Morzaria.
The project's after-tax net present value following the assessment stands at USD375 million, with a project life of 31 years with a saleable product of 2.5 million to 3.4 million tonnes per annum.
Total project costs are estimated at USD4.5 billion with total revenue estimated at USD6.8 billion. The Lake Giles iron ore project includes the Moonshine magnetite and Ularring hermatite mineral resources.
Cadence said the iron ore market has undergone a "dramatic shift" since previous assessments of the two mineral resources at Moonshine and Ularring were carried out.
According to Cadence, low grade iron ore is "currently heavily discounted" while high-grade ore is attracting "premium pricing".
"In response, Macarthur has revised its strategy to align the projects with the robust current and forecast market conditions, capital markets and available capacity of regional infrastructure," Cadence added.
Separately, fellow Cadence investee Auroch Minerals has completed a ground-gravity survey at its Arden zinc project in south Australia.
Cadence currently holds a 6.5% interest in Auroch.
The survey delineated an "intense" gravity anomaly extending 2 kilometres at the Ragless Range prospect.
"The anomaly may be indicative of thickened mineralised horizons of the high-grade zinc mineral smithsonite that was identified in drill-hole RRDD007, which has a very high density and hence contrasts greatly with the relatively low-density sedimentary host rocks of the area," added Cadence.
Morzaria said: "Under the guidance of Aidan Platel and his team, the Auroch investment case continues to build. Cadence Minerals look forward to the next phase of developments."
Cadence said the Arden project is a "large relatively unexplored exploration area", about 335 kilometres north of Adelaide.
Shares in Cadence Minerals were down 2.8% Tuesday at 0.14 pence each.
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