**Summary**
Cadence Minerals Plc (AIMKDNC) has executed a binding **Prepayment Offtake Agreement** with its selected offtake and logistics partner, securing a **US$4.6 million prepayment and working capital facility** for the Amapá Iron Ore Project in Brazil. This agreement follows the completion of technical, legal, and commercial due diligence by the offtaker. The funding will enable the licensing, refurbishment, and restart of the **Azteca Plant**, a key component of the project.
**Key Highlights**
1. **Funding Structure**The US$4.6 million facility includes US$3.45 million for plant restart and US$1.15 million for working capital. Cadence contributes **US$391,000** from its oversubscribed equity raise, with the remainder funded by the offtaker.
2. **Financial Benefits**The prepayment structure is expected to deliver a **70% IRR** on Cadence’s investment, with no further equity required. Repayment will be aligned with iron ore shipments.
3. **Project Progress**The agreement de-risks the Amapá Project, strengthens Cadence’s 35.7% equity position, and accelerates the path to first production. The project team is now focused on obtaining the **mine installation licence**, with refurbishment and commissioning of the Azteca Plant expected to begin shortly after.
4. **Cashflow and Growth**Once operational, Azteca is expected to generate early cashflow to support working capital, operations, and the broader **5.5 Mtpa DR-grade development** at Amapá.
5. **Strategic Milestone**The restart of Azteca is a core component of Cadence’s staged strategy, moving the project from planning to execution and building a foundation for long-term growth.
**Next Steps**
Complete final licensing requirements, including archaeological surveys and engineering works, expected within **two months**.
Obtain federal and state environmental approvals, anticipated within **two months** thereafter.
Begin refurbishment and commissioning of the Azteca Plant, targeting **first production and shipment** within three months of licence issuance.
**About Amapá**
The project hosts a **JORC-compliant Mineral Resource** of 276 Mt @ 38% Fe and a **Proven and Probable Ore Reserve** of 195.8 Mt @ 39.3% Fe. The December 2024 Pre-Feasibility Study confirmed its potential to produce **5.5 Mtpa of 67.5% Fe DR-grade concentrate**, with a post-tax NPV10 of **US$1.97 billion**.
**Management Comment**
CEO Kiran Morzaria highlighted the agreement as a **major milestone**, enabling progress toward final licensing and plant refurbishment. The structure ensures Cadence retains full exposure to near-term cashflow and the project’s wider development with minimal capital contribution.
**Cautionary Note**
The announcement contains forward-looking statements based on current expectations and assumptions, subject to risks and uncertainties that could cause actual results to differ materially.