Updated Mineral Resource Estimate - Amapa Iron Ore

Cadence Minerals Plc

("Cadence Minerals", "Cadence" or "the Company")

 

Updated Mineral Resource Estimate for the Amapa Iron Ore Project

 

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce the completion of the update of the Mineral Resource Estimate ("MRE") in respect of its investment in the Amapá Iron Ore Project Brazil.

 

Highlights:

·    Mineral Resource of 176.7 million tonnes ("Mt") grading 39.7% Fe in the Indicated category, reported within an optimised pit shell and using a cut-off grade of 25% Fe.

·    Mineral Resource of 8.7Mt at 36.9% in the Inferred category, reported within an optimised pit shell and using a cut-off grade of 25% Fe.

·    This Mineral Resource represents a 21% increase in total mineral resources compared to the equivalent MRE published by Anglo American 2012.

·    The MRE will form the basis of the mine planning studies within the scoping study, to support the operational plan to produce 4.4Mt of 65% Fe and 0.3 Mt of 62% Fe per annum.

·    Significant potential exists to increase the resource base after the completion of metallurgical and optimisation studies on the surficial Colluvium and Canga and the underlying Semi Compact and Compact Itabirite material types.

 

Cadence CEO Kiran Morzaria commented:

"We are delighted that, following a significant effort from all involved, Cadence has been able to release an updated Mineral Resource Estimate for the Amapá Project. This significantly builds on our confidence in the economics identified during our internal desk studies and on-site due diligence.  The increase in overall mineral resource coupled with the historic operations and iron ore quality provides a robust platform on which to base our ongoing scoping study.

 

We now look to the future with a palpable sense of excitement, and I would once again like to thank all parties involved in working so hard in the adverse conditions created by COVID to bring Amapá back to life. I look forward to reporting further developments."

 

Further Information.

Baker Geological Services Ltd ("BGS") was commissioned by Cadence to prepare a MRE and technical report on Dev Mineração S.A the Mineral Assets Dev Mineração S.A ("Dev") comprising the Amapá Iron Ore Deposit ("Amapá" or the "Project") located in Amapá State, Brazil.

 

The MRE will now form the basis of mine planning and open-pit optimisation studies being carried out as part of our scoping study on the Amapá Project. Wardell Armstrong LLP ("Wardell Armstrong") have been appointed to supervise and prepare the scoping study. As announced previously, the operational plan envisages that the mined material will be beneficiated into a 65% Fe Pellet Feed and 62% Spiral Concentrate at an average rate of 4.4Mt and 0.3Mt per annum.

 

At the time of writing, the Mining Rights to the Project are held by Dev. Dev is currently under a Judicial Restructuring Plan ("JRP") which was approved by creditors in August 2019. Under the JRP, there are certain preconditions for Cadence to gain an equity stake in Dev. The remaining precondition outstanding is to reach a binding agreement with the secured bank creditors. After the latter is completed, Cadence will release its monies held in escrow and 99.9% of the equity of Dev will be transferred to a joint venture company Pedra Branca Alliance Pty. Ltd ("PBA") jointly owned by Cadence (20%) and its joint venture partner IndoSino Pty. Ltd ("IndoSino") (80%). Cadence's next stage of investment will be a further investment of US$3.5 million on the grant of all operational and environmental licenses, at which point Cadence will own 27% of PBA. Cadence also has the first right of refusal to increase its stake to 49% in PBA.

 

Prior to this MRE, the most recent MRE on the Amapá Project was completed in 2012 by Anglo American. The MRE, with an effective date of 29 October 2020, has been reported in accordance with the Canadian National Instrument 43-101 ("NI 43-101") Standards for Disclosure for Mineral projects. The estimation process followed the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) "Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines" (CIM, 2019). BGS employee, Mr Howard Baker takes Qualified Person ("QP") responsibility for the MRE.

 

To determine the final Mineral Resource Statement, the model has been subjected to a pit optimisation exercise to determine the proportion of the material defined that has a reasonable prospect of economic extraction. This was undertaken by Wardell Armstrong International ("WAI") with input from Cadence and BGS.

 

The Mineral Resource Statement generated by BGS has been restricted to the Indicated and Inferred Friable Haematite, Friable Itabirite and Friable Altered Itabirite material falling within an optimised pit shell and using a metal price of 130 USD/tonne for a 65% Fe concentrate. A cut-off grade of 25% Fe has been used for reporting material within the pit shell, this being the operational cut-off grade employed during mining operations.

 

Using the above criteria, this represents the material which BGS considers has a reasonable prospect for eventual economic extraction potential.

 

The statements have been classified by Qualified Person, Howard Baker (FAusIMM(CP)) in accordance with the Guidelines of NI 43-101 and accompanying documents 43-101.F1 and 43-101.CP. The Amapá Mineral Resource Estimate has an effective date of 29 October 2020.

 

The Amapá Project, at a cut-off grade of 25% Fe and reported within an optimised pit shell contains an Indicated Mineral Resource of 176.7 Mt grading 39.7% Fe, 30.0% SiO₂, 6.2% Al₂O₃, 1.2% Mn and 0.17% P and an Inferred Mineral Resource of 8.7 Mt grading 36.9% Fe, 29.4% SiO₂, 7.4% Al₂O₃, 1.63% Mn and 0.44% P (Table 1)

 

Table 1:     Gross and attributable Amapá Mineral Resource Statement reported within an optimised pit and above a cut-off grade of 25% Fe

Classification	Material	Tonnes Millions	Attributable Tonnes (Millions) (6)	Fe (%)	SiO2 (%)	Al2O3 (%)	Mn (%)	P (%)
Indicated	Friable Haematite	0.6	0.12	58.6	12.2	1.8	0.30	0.10
	Friable Itabirite	59.5	11.9	42.0	33.1	3.4	0.67	0.09
	Friable Altered Itabirite	116.5	23.3	38.4	28.5	7.7	1.47	0.21
Sub-Total		176.7	35.32	39.7	30.0	6.2	1.20	0.17
Inferred	Friable Itabirite	1.3	0.26	40.4	38.0	2.7	0.29	0.05
	Friable Altered Itabirite	7.4	1.48	36.3	27.9	8.2	1.87	0.51
Sub-Total		8.7	1.74	36.9	29.4	7.4	1.63	0.44

 

Notes:

(1) The Mineral Resource is considered to have reasonable prospects for eventual economic extraction.

(2) Mineral Resources, which are not Mineral Reserves, have no demonstrated economic viability.

(3) Amapá has an effective date of 29 October 2020.

(4) The Mineral Resource Estimate was constrained within lithological and grade based solids and within an optimised pit shell defined by the following assumptions; metal price of 130 USD/t of 65% Fe concentrate; iron recovery of 75.4% Fe, Processing costs of 3.67 USD/t dry feed and a mining cost of 1.61 USD/t rock.

(5) Mineral Resources have been classified according to the "CIM Standards on Mineral Resources and Reserves: Definitions and Guidelines (November 2019)" by Howard Baker (FAusIMM(CP)), an independent Qualified Person as defined in NI 43-101.

(6) The attributable tonnes represents the part of the Mineral Resource that will be attributable to Cadence Minerals on the vesting of its initial 20% in the Project, and is subject to the fulfilment of the conditions precedent in the court approved judicial restructuring plan.

 

The open-pit optimisation shows a strip ratio of 1: 1.14 (ore tonnes: waste tonnes).

 

BGS notes that the Mineral Resource has a reasonable prospect for eventual economic extraction but are not currently considered Mineral Reserves. Mineral Reserves are estimates of the tonnage and grade or quality of material contained in a Mineral Resource that can be economically mined and processed. To be considered a Mineral Reserve, modifying factors must be applied to the MRE as part of the preparation of a prefeasibility study or a feasibility study as outlined in the CIM Definition Standards. The estimated amount of saleable material contained in the final product must demonstrate a positive net present value using an appropriate discount rate and must demonstrate that eventual extraction could be reasonably justified.

 

BGS are not aware of any factors (environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors) that have materially affected the Mineral Resource Estimate.

 

The data used for the MRE update, including drill hole databases, topographic surveys and the previous 2012 Mineral Resource Model, was provided by Dev with the work undertaken by BGS taking place during the global COVID-19 Pandemic and as such, a site visit by BGS has not taken place as part of this update. That said, Howard Baker of BGS visited the Project in March 2015 and understands that no additional technical studies, including exploration drilling, have taken place since this date. At the time of the BGS site visit in 2015, the operation had been on care and maintenance for approximately 12 months. BGS did, however, undertake a full tour of the mine site, the core shed and discussed the Project with Dev personnel, Zamin Ferrous Ltd being the owners of the Project at the time of the site visit.

 

The Mineral Resource Statement has been limited to the Friable Hematite, Friable Itabirite and Friable Altered Itabirite material types. Historic mineral resources included Colluvium and Canga material within the resource statement, however, BGS noted that during its site visit in 2015 that neither material was being processed and all the material was being stockpiled, and as such both Colluvium and Canga material types have been excluded from the updated Mineral Resource Statement.  Similarly, no test work has been undertaken on the Semi Compact and Compact Itabirites, and it has not been demonstrated that a saleable concentrate can be generated from these material types.

 

Due to the lack of a recent site visit, it has not been possible to undertake any verification studies such as check sampling from the existing core, pit mapping or more detailed studies such as twin drilling and the acquisition of up to date topographic surveys. As such, all data has been taken on face value and verified where possible for obvious errors. All historical protocols have been accepted with the logging, assaying, and associated quality control studies included within this update, as per the previous 2012 Anglo American Mineral Resource Estimate. The 2012 Mineral Resource model has been reviewed by BGS as part of this study and following observations from the site visit in 2015 by BGS, an update to the Resource Model has been undertaken, using the data as supplied.

 

Data Quality and Quantity

Exploration at the Project commenced in January 2005 with drilling being carried out at various stages up until completion in August 2012.

 

BGS was supplied with the raw drill data (collars, geology, assay, and survey data) for the Project and generated a desurveyed drill hole file for analysis. In total, the drill hole file generated included 1,046 drill holes for a total of 76,575 m of drilling.

 

No validation or check sampling has taken place as part of this update with all QA/QC data restricted to that reported in the 2012 Anglo American Mineral Resource Estimation report. However, the processes put in place appear robust and follow standard industry practise and BGS opines that the results provide confidence that the data within the drill hole database is suitable for use in a MRE.

 

 

Figure 1: Distribution of drill holes and Fe assays

 

Geological Model

Iron mineralisation at the Amapá Project is hosted within a folded Banded Iron Formation ("BIF") or itabirite that has been metamorphosed to Amphibolite grade. Granitic pegmatite intrusions crosscut the mineralisation that result in zones of hydrothermal alteration, and tropical weathering of the BIF has resulted in an iron formation of variable oxidation state and competency. The weathering process results in quartz being leached away, leaving an enriched itabirite.

 

Figure 2: Local geology of the Amapá Project, Itabirite unit (blue) showing synformal structure of the itabirite complex (blue).

 

Through an iterative process, the lithological logging codes were used to model the different material type / litho-geochemical domains with the domains being assessed through statistical checks. The statistical relationships observed, based on the modelling of the logging codes, shows that the itabirite system is well understood with the litho-geochemistry representing the logging applied. BGS acknowledges that the modelled lithology results in overlapping grade boundaries, but this is common in deposits with transitional weathering profiles.

 

The model was created by grouping all itabirite units to create an overall iron formation domain. The iron formation wireframe was then created by applying a trend to the interpretation to consider the overall dip/strike of the Amapá system. The iron formation wireframe was then cut by creating a pegmatite intrusive wireframe.

 

Various litho-geochemical zones were then created within the iron formation wireframe using the same structural trend as that applied to the overall iron formation. The wireframes were created as a series of intrusives that cut against one another. This method was adopted due to the complex interaction between the differing units because of the weathering system.

 

Figure 3: Distribution of the key itabirite (HP, ITBF, ITAF, ITBB/ITAB, ITC) and alteration zones (RCB/RCBC, ZAH/ZAHC).

 

Finally, BGS created surface colluvium and canga domains along with the host mica-schist and amphibolite units.

 

Mineral Resource Estimate

The MRE was completed in Leapfrog Edge and Datamine Studio RM.  A composite file was used in a geostatistical study (variography and Quantitative Kriging Neighbourhood Analysis - "QKNA") that enabled Ordinary Kriging ("OK") to be used as the main interpolation method. The results of the variography and the QKNA were utilised to determine the most appropriate search parameters used in the grade estimate.

 

The interpolation used an elliptical search using orientation data from a structural trend used to guide the estimation through areas of fluctuating dip/strike. Grades of Fe, Al₂O₃, SiO₂, P, LOI, CaO, MgO, Mn, P, and TiO₂ were interpolated into the empty block model using OK and being based on the determined interpolation parameters and the results of geostatistical study.

 

Post estimation processes calculated the Slope of Regression to enable an assessment of the quality of the estimate, and a dry density was applied to the model using the moisture content of the different lithologies.

 

The interpolated block model was validated through visual checks and a comparison of the mean input composite and output model grades. BGS is confident that the interpolated block grades are a reasonable reflection of the available sample data.

 

Mineral Resource Classification

Based on the work undertaken and the statistical validation steps carried out, BGS is confident that the geological model created honours the understanding of the local scale geology and weathering / alteration controlled grade distribution as accurately as possible given the current data available.

 

It has not been possible to assess the validity of the QA/QC data presented during the 2012 MRE report. However, the processes put in place appear robust and follow standard industry practise and BGS opines that the results provide confidence that the data within the drillhole database are suitable for use in a MRE. It is however strongly recommended that a detailed sample verification programme be put in place, using existing core or pulps where possible along with a twin drilling campaign.

 

Density measurements have been taken on a wet basis with moisture being recorded that BGS has used to determine a dry density. BGS acknowledges that recording wet density is common practice in South America, although BGS does not consider this the industry norm. BGS strongly recommends that a density test work programme be introduced, using existing core samples or through in pit test pits.

The data used in the geostatistical analysis resulted in suitably reliable downhole variograms for all zones that allowed the nugget variance to be fixed with robust directional variograms being developed.

QKNA studies were undertaken using the variograms, and suitable estimation parameters were selected through testing alternative sample support and search ellipse scenarios. The slope of regression was calculated, giving an indication of the quality of the estimated grade. Due to the level of sample support, the slope of regression values recorded were considered high and indicative of a good quality grade estimate.

 

BGS employed numerous validation techniques and is confident that the estimated block grades are a reasonable reflection of the input sample data. Visual and statistical checks showed that very little bias has been introduced.

 

The Project has been classified as containing Indicated and Inferred Mineral Resources and is primarily based on the quality of the grade estimate and degree of sample support. No Measured Mineral Resources have been assigned due to the lack of independent QA/QC and limited and reliable dry density data.

 

Figure 4 Amapá resource classification. Red=Inferred, Orange=Indicated

 

Resource Potential

BGS recognises an opportunity to assess the potential of the other iron-bearing domains logged and modelled as part of this update. This primarily includes the Semi Compact and Compact Itabirites along with the Canga and Colluvium that was previously included in the 2012 Mineral Resource Statement but has been excluded from this update.

 

It is recommended that metallurgical test work programmes on all iron-bearing material types are undertaken to assess the upgrade potential.

 

Canga and Colluvium material above a 25% Fe cut-off and within the optimised pit shell, but excluded from the Mineral Resource Statement totals 49 Mt of Colluvium grading 38.5% Fe, 21.5% SiO₂, 12.4% Al₂O₃, 0.55% Mn and 0.16% P and 6.4 Mt of Canga grading 46.7% Fe, 10.7% SiO₂, 11.2% Al₂O₃, 0.22% Mn and 0.47% P.

 

On a global basis, and not restricted to a pit shell or cut-off grade, BGS has modelled an additional 800 Mt of Indicated and Inferred Semi Compact and Compact Itabirite that lie predominantly below the existing Itabirite resource. This provides a significant opportunity should future metallurgical and optimisation test work show the material can be upgraded economically to a saleable concentrate.

 

Qualified Person

The information that relates to Mineral Resources is based on information compiled by Mr Howard Baker, who is a Chartered professional Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM(CP)) #224239. Mr Baker has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the type of activity which he is undertaking to qualify as a Qualified Person in accordance with NI 43-101. Mr Baker consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

 

Mr Baker of BGS is a resource geologist with 25 years' experience covering multiple commodities from early-stage exploration through to definitive feasibility studies. Mr Baker is the Managing Director of BGS and previously worked for the International Mining Consultancy, SRK Consulting (UK) Ltd ("SRK") where he was employed for eight years as a Principal Consultant and Practice Leader. In his time at SRK, he focussed on the management of Mineral Resource Estimates with a strong focus on technical quality management and compliance to international reporting codes. In addition, he played a key role in advising on suitable exploration protocols and drill programmes and effectively assisted clients in the development of numerous large-scale iron ore projects. Prior to his time at SRK, Mr Baker lived and worked in Australia, working for Rio Tinto, BHP Billiton, Iluka Resources and Anaconda Nickel

 

Mr Baker has extensive global experience in the geology and Mineral Resource Estimation of iron ore projects and worked as a mine geologist and specialist resource geologist in the iron ore Pilbara district of Western Australia.

 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 

About the Amapá Project

The Project commenced operations in December 2007 with the first production of iron ore concentrate product of 712 kt in 2008.  In 2008 Anglo American (70%) and Cliffs (30%) acquired the Amapá Project in 2008 as part of a larger package of mining assets in Brazil.

Production steadily increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012, respectively.  During this period Anglo American report operating profits from their 70% ownership in the Amapá Project of USD 120 million (100% USD 171 million) and USD 54 million (100% USD 77 million).

Prior to its sale in 2012 Anglo American valued it's 70% stake in Amapá Project at USD 866 million (100% 1.2 billion) it impaired the asset in its 2012 Annual Accounts to USD 462 million (100% USD 660 million.

Amapá filed for judicial protection in August 2015 in Brazil and mining ceased at the Amapá Project. A judicial order in early 2019 offered investors and creditors the opportunity to file a revised JRP. Cadence and IndoSino filed a conditional JRP which was approved by creditors in August 2019. Cadence, IndoSino and Dev have continued to develop the Project and satisfy the conditions of the JRP. Once the preconditions of the JRP are met, The Investors will own 99.9% of the Amapá Project (Initial ownership by Cadence of 20%).

Once the asset has vested into the Investors joint venture company, we intend to embark on the rehabilitation of the Project, including the completion of commissioning studies required of bank finance, shipping of the iron ore from the stockpile and eventually the restart of full operations.

The historic mine plan would mean that the Amapá Project would produce at steady-state production an estimated 4.4 Mt of 65% Fe and 0.9 Mt of 62% Fe per annum for approximately 14 years.

Forward-Looking Statements

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ''believe'' ''could'' "should" ''envisage'' ''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

Glossary

 

Al2O3	Aluminium oxide is a chemical compound of aluminium and oxygen
Assaying	The chemical analysis of rock or ore samples to determine the proportions of metals
Block model	A three-dimensional electronic model in which geological characteristics and qualities are housed.
Canga	An iron-rich rock formed where material weathered from an original iron ore deposit has been cemented by iron minerals.
Colluvium	Loose, unconsolidated material that accumulates above the weathering iron ore bodies.
Core	A cylindrical section of a naturally occurring substance. Most core samples are obtained by drilling with special drills into the substance, such as sediment or rock, with a hollow steel tube, called a core drill. The hole made for the core sample is called the "core hole."
Cut-off grade	The lowest grade of mineralised material that qualifies as ore in a given deposit or rock of the lowest assay included in an ore estimate.
Dip	The angle at which a bed, stratum, or vein is inclined from the horizontal, measured perpendicular to the strike and in the vertical plane.
Directional Variograms	Directional variograms and semivariograms are commonly used where geological features are heterogeneous. For example, fluvial environments dominated by valleys, channels and point bars are likely to have directional components that are detectable. Geostatistical models that use directional variograms can be expected to be more reliable in these circumstances.
Discount rate	The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.
Drillhole	A drill hole formed by the act or process of drilling boreholes using bits s the rock-cutting tool. The bits are rotated by various types and sizes of mechanisms motivated by steam, internal-combustion, hydraulic, compressed air, or electric engines or motors.
Fe	Chemical symbol for iron. It is a metal that belongs to the first transition series and group 8 of the periodic table. It is by mass the most common element on Earth, right in front of oxygen (32.1% and 30.1%, respectively), forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust.
Feasibility study	This study is the most detailed and will determine definitively whether to proceed with the project. A detailed feasibility study will be the basis for capital appropriation and will provide the budget figures for the Project. Detailed feasibility studies require a significant amount of formal engineering work, are accurate to within 10-15% and can cost between ½-1½% of the total estimated project cost.
Itabirite	Itabirite is a banded quartz hematite schist, very similar to banded iron formation in appearance and composition. Friable Itabirite is extensively weathered leading to disaggregation of the individual mineral grains comprising the rock;
Haematite	An iron oxide mineral with the chemical formula Fe2O3;
Grade	Relative quantity or the percentage of ore mineral or metal content in an ore body;
Indicated Mineral Resources	That part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade, and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed;
Inferred Mineral Resources	That part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes which may be limited or of uncertain quality and reliability;
Interpolation	Estimation of a statistical value from its mathematical or graphical position intermediate in a series of determined points;
Kt	Thousand tonnes;
Lithologies	The lithology of a rock unit is a description of its physical characteristics visible at outcrop, in hand or core samples, or with low magnification microscopy. Physical characteristics include colour, texture, grain size, and composition;
Measured Mineral Resources	The part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade, and mineral content can be estimated with a high level of confidence.
Metallurgical test work	This is the process of testing of how the resource material will respond to standard metallurgical processes, such as flotation, gravity concentration and leaching. They are conducted on coarse assay reject material using standard test conditions. The objective is to determine how the resource material reacts to commonly accepted recovery processes and gain a preliminary estimate of metal recoveries.
Mine planning	A plan or schedule of the extraction of ore to optimise the return (of profit) on investment, through capital investment, design, extraction scheduling, and preparation of the mineral product according to specifications.
Mineral Reserves	The economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social, and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Ore Reserves are sub-divided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves.
Mineral Resource	A concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality, and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics, and continuity of a Mineral Resource are known, estimated, or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
Mn	Chemical symbol for Manganese. It has an atomic number 25. It is not found as a free element in nature; it is often found in minerals in combination with iron.
Implicit modelling	Implicit modelling is generated by computer algorithms directly from a combination of measured data and user interpretation. The modelling requires a geologist's insight, but this is made in the form of trends, stratigraphic sequences, and other geologically meaningful terms. This approach is faster, more flexible, and fundamentally better suited to modelling geology.
Modifying factors	The term 'modifying factors' is defined to include mining, metallurgical, economic, marketing, legal, environmental, social and governmental considerations.
Net present value	This is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyse the profitability of a projected investment or Project.
Open pit	An excavation or cut made at the surface of the ground for the purpose of extracting ore and which is open to the surface for the duration of the mine's life
Ordinary kriging	In the estimation of mineral resources by geostatistical methods, the use of a weighted, moving-average approach both to account for the estimated values of spatially distributed variables, and to assess the probable error associated with the estimates.
P	The chemical symbol for Phosphorus with atomic number 15.
Pellet feed	Iron ore fines used to produce pellets
Pit Optimisation	A process whereby a series of optimised shells for open pits are generated each corresponding to a specific commodity price assumption.
Pit shell	A design of aa open-pit obtained from the process of open-pit optimisation
Prefeasibility study	Is more detailed than a Scoping Stud. A Prefeasibility study is used in determining whether to proceed with a detailed feasibility study and as a "reality check" to determine areas within the Project that require more attention. Prefeasibility studies are done by factoring known unit costs and by estimating gross dimensions or quantities once conceptual or preliminary engineering and mine design has been completed. Prefeasibility studies have an accuracy within 20-30%.
QA/QC	Quality Assurance and Quality Control programme to assess the quality and reliability of data collected and stored.
Quantitative Kriging Neighbourhood Analysis	A quantitative method of testing different estimation parameters (e.g. block size) and, by assessing their impact on the quality of the resultant estimate, select the optimal value for each parameter. This will be dependent on several factors within a deposit: the inherent variability, the ranges of grade continuity and the data spacing.
Scoping study	An order of magnitude study is an initial financial appraisal of a mineral resource. Depending on the size of the project, an order of magnitude study may be carried out. It will involve a preliminary mine plan and is the basis for determining whether to proceed with more detailed engineering work. Order-of-magnitude studies are developed by copying plans and factoring known costs from existing projects completed elsewhere and are accurate to within 40-50%;
SiO2	Silicon dioxide, also known as silica, is an oxide of silicon most commonly found in nature as quartz and in various living organisms. In many parts of the world, silica is the major constituent of sand.
Spiral concentrate	Iron Ore product produced from the beneficiation plant.
Strip Ratio	This refers to the ratio of the volume of overburden (or waste material) required to be handled in order to extract some tonnage of ore.
Strike	This is the direction of the line formed by the intersection of a fault, bed, or other planar feature and a horizontal plane. Strike indicates the attitude or position of linear structural features such as faults, beds, joints, and folds.
t	Tonnes
Twin drilling	The drilling of holes near a previous drill hole it is a traditional technique used for verification of intersections of high-grade mineralisation, testing of historic data, or confirmation of drillhole data during geological due diligence studies.
Validation	Assessing the quality of block model estimates by comparison with raw assay data.

 

- Ends -

 

For further information:
Cadence Minerals plc	+44 (0) 7879 584153
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)	+44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)	+44 (0) 207 399 9400
Jon Belliss