Cadence Minerals will resume port operations and the shipment of iron ore from its Amapá project after a Brazilian Court rejected an appeal by its creditors against shipping the stockpiles.

 

Over the next 18 months, the Amapá project will produce 1.4mn mt of iron ore with a 62pc Fe content, Kiran Morzaria, chief executive officer at Cadence Minerals, told the local media last week.

 

In April 2020, the Commercial Court of Sao Paulo ruled that Amapá project owner DEV could start shipping iron ore stockpiles at its wholly-owned port in Santana, Amapá, Brazil. In August and September, bank creditors filed an interim order against this, which was approved by the State of Sao Paulo Upper Court. However, the court reversed this order on Feb 9 and ruled that Cadence would be allowed to make its shipments. 

 

In September 2020, Cadence had also announced that DEV Mineração, Cadence, and Indo Sino had agreed to settlement terms proposed by the secured bank creditors. 

 

The companies are negotiating legal and financial terms with the creditors and will publish an update once the binding documents are executed, Cadence said in a statement on Feb 10. It added that the execution of such an agreement would satisfy the remaining major precondition for Cadence’s initial 20pc investment in the Amapá iron ore project. 

 

Cadence’s escrow amount will be released once this agreement is completed, after which it will become a 20pc shareholder in the Amapá Project through its joint venture company that will own a 99.9pc stake in DEV Mineração.

 

With the resumption of shipments, DEV can now export iron ore and earn around $10mn of which, $2.5mn will be used to pay off smaller creditors and $6mn will be used to recommission the Amapá project’s exploration studies and begin the maintenance and monitoring of its current tailing dam facilities.

 

Last year, Brazil exported, about 341.6mn mt of iron ore, up by 0.3pc from 340.5mn mt shipped in 2019, according to the latest Brazilian Mining Association figures.

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