10th Feb 2021 11:51
(Alliance News) - Cadence Minerals PLC on Wednesday said an Upper Court in Brazil has rejected an appeal by its bank creditors against shipping iron ore stockpiles, meaning port operations and shipment can resume.
Shares in Cadence were up 19% at 19.60 pence in London in morning trading.
In September, Cadence announce that the company itself, as well as DEV Mineracao SA and Indo Sino Pty Ltd, had agreed in principle to settlement terms proposed by secured bank creditors. Detailed talks and legal document drafting continue and an update will be published once binding documents are executed.
Such an agreement with bank creditors would satisfy the remaining major precondition for Cadence's initial 20% investment in the Amapa iron ore project in Brazil. On completion of conditions and release of Cadence escrow monies, the company will become a 20% shareholder in Amapa via its joint venture company, which will own a 99.9% stake in DEV.
Back in April 2020, the Commercial Court of Sao Paulo ruled that Amapa project owner DEV could start shipping iron ore stockpiles at its wholly owned port in Santana, Amapa, Brazil. Following this, bank creditors filed an interim order against this, which was approved by the State of Sao Paulo Upper Court.
However, on Tuesday this week, the Upper Court rejected the bank creditors appeal and, once the ruling is effective - up to a week from date of publication - the interim order will be annulled and DEV's original petition will be valid, meaning port operations and shipment can recommence.
DEV is permitted to export enough iron ore to realise a USD10 million profit from Amapa stockpiles at the port, with the first portion of this to be used to pay historic small and employee creditors, around USD2.5 million, after which around USD6 million will be used to start recommissioning Amapa project studies and begin maintenance and monitoring of current tailing dam facilities.
Remaining net revenues will help provide working capital for operations and be used for payment against the outstanding amount owed to bank creditors.
"Further announcements will be made concerning both the settlement agreement and the outcomes from the ruling once available," said Cadence.
Separately, Cadence noted Bacanora Lithium PLC's announcement that it has begun initial site activities at the Sonora lithium project, Mexico following last week's USD65 million fundraise. The company has engaged a local specialist ecological services company based in Sonora to begin initial site works.
Cadence holds Mexalit and Megalit joint venture companies and Mexalit owns the El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, which form part of the 20-year mine plan of Sonora.
By Anna Farley; [email protected]
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