Cadence Minerals upbeat on capex optimisation work

22nd Mar 2024 16:29

(Sharecast News) - Cadence Minerals announced the culmination of its capital expenditure optimisation programme at the Amapá Iron Ore Project on Friday, marking a significant milestone towards operational efficiency and sustainability.

The AIM-traded firm said the initiative, conducted at a pre-feasibility level, had yielded noteworthy savings in processing plant recommissioning costs, accompanied by a tangible increase in production capacity.

Through pre-feasibility study-level optimisation studies, Cadence said it had identified substantial capital savings amounting to 33%, or $63.2m, associated with the beneficiation plant at the Amapá Project.

That achievement underscored the company's commitment to prudent financial management, and also positioned it favourably in terms of cost competitiveness within the iron ore sector, the board said.

The optimisation programme also paved the way for a forecast uptick in production, with output expected to reach around 5.5 million metric tons per annum of iron ore concentrate.

Of that, 4.51 million tonnes per annum would comprise a 65% product, while 0.99 million annual tonnes would be a 62% product, reflecting a notable expansion in operational capacity.

In collaboration with its joint venture partners, Cadence Minerals said it would embark on a comprehensive redesign of the mine plan aimed at curtailing mining costs.

The revised capital expenditure framework and mine plan would serve as the cornerstone for an amended economic assessment at a pre feasibility study level.

Cadence said it was committed to advancing the development of a 67% 'green iron' product flow sheet at a production rate of 5.5 million tonnes per annum.

In addition, the optimisation programme yielded a favourable outcome in terms of capital efficiency, with the capital requirement for the entire project now positioned in the bottom quartile of comparables at $58 per million tonnes of annual capacity.

"We're thrilled to announce the successful completion of our capital expenditure optimisation program at the Amapá Iron Ore Project," said chief executive officer Kiran Morzaria.

"This effort has delivered a substantial 33% reduction in capital costs, saving $63.2m and forecasted a 4.8% to 5.5 million tonnes per annum increase in iron ore concentrate production.

"Moreover, given the Study was completed ahead of schedule, we do not anticipate any delays to the timeline already announced, even with the additional work associated with optimising the mine plan to accommodate the increased production."

Morzaria said Zephyr was "fully committed" to advancing the development of the 67% iron product flow sheet, aligning with its vision for sustainable growth and value maximisation.

At 1545 GMT, shares in Cadence Minerals were up 3.14% at 5.26p.

Reporting by Josh White for Sharecast.com.