Cadence Minerals invests in former Anglo American, Cliffs iron ore mine in Brazil

Monday, 10 June 2019 21:28:26 (GMT+3)   |   Sao Paulo

UK-based investment firm Cadence Minerals said it entered into a binding investment agreement with Indo Suno to invest and buy up to a 27 percent stake in the former Anglo American and Cliffs Natural Resources-owned Amapá iron ore mine in Brazil, it said.

The project includes a beneficiation plant, a railway and a private port owned by DEV Mineração. Under the terms of the deal, Cadence will have up to a 27 percent stake of joint venture (JV) Pedra Branca Alliance Pte, which will own 99.9 percent of the Amapá iron ore project.

“Should Indo Sino seek further investors or an investment in the JV Co the agreement also provides Cadence with a first right of refusal to increase its stake to 49 percent in the JV Co,” the UK-based company said.

Cadence said it would invest $6 million in two stages to buy the 27 percent stake. The first stage is for a 20 percent share in the JV for $2.5 million. Then, it would pay an additional $3.5 million for the remaining 7 percent stake.

“If Cadence is unable to complete the second stage of the investment or not exercise its right of first refusal under the terms of the Agreement, Indo Sino will have a twelve-month option to buy the shares in the JV held by Cadence for 1.5 times the price paid by Cadence for such shares,” Cadence said.

Cadence said its investment depends on certain conditions, including the grant of key operating licenses and the release of bank securities over the asset. Cadence will have the right to nominate two members for a five-member board. The other three members will be comprising of “one member jointly appointed by Cadence and Indo Sino and two appointed by Indo Sino.”

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