Cadence Minerals Secures US$4.6M Funding to Restart Amapá Azteca Plant

Further studies are planned to assess whether the broader tailings resource – from around 28 million tonnes generated historically – can support longer-term production, alongside the development of the main 5.5 Mtpa direct reduction-grade (67.5% Fe) project.

Costs and margins: why the restart could be cashflow positive from day one

Cadence guides that, once restarted, the Azteca Plant should have average operating costs of US$37/t Free on Board (FOB) for the first three years and around US$79/t on a Cost and Freight (CFR) basis into China. Against current market prices of roughly US$120/t (65% Fe fines CFR China), that spread suggests robust early margins, recognising that shipping terms and grade adjustments will apply.

The company expects the plant to be net cashflow positive from the first shipment. Combined with the per-tonne repayment structure, that underpins the flagged circa 70% IRR on Cadence’s share.

Key metric	Figure
Prepayment offtake	US$4.6 million
Azteca Plant Financing	US$3.45 million
Working capital	US$1.15 million
Cadence contribution	Approximately 10-15% of prepay
Expected IRR (Cadence share)	Circa 70%
Azteca output (post-refurb)	Circa 380,000 tpa at 65% Fe
Dyke 5 tailings feed	Approx. 2 million tonnes at ~55% Fe
Operating costs (FOB/CFR)	US$37/t FOB; ~US$79/t CFR China
Market price context	~US$120/t (65% Fe fines CFR China)

Permitting, timeline and what to watch next

Once the binding agreement is executed, the remaining studies and permits can be completed. First production from Azteca is anticipated around three months after licence issuance.

Two items remain for the mine installation licence:

• A supplementary archaeological survey.
• Engineering designs for water reticulation and sewage treatment systems.

Both studies are expected to take roughly two months, followed by a two-month review. The company does not expect the archaeological work to identify material issues, noting previous assessments found no sites impacted by the planned development or 15-year mine life.

Strategic fit with the 5.5 Mtpa DR-grade Amapá plan

Amapá is a fully integrated iron ore operation with mine, rail, port and beneficiation infrastructure. It carries a JORC Mineral Resource of 276 million tonnes at 38% Fe and a Proven and Probable Ore Reserve of 195.8 million tonnes at 39.34% Fe.

The December 2024 updated Pre-Feasibility Study confirmed potential to produce 5.5 Mtpa of 67.5% Fe direct reduction (DR) grade concentrate over a 15-year mine life, with a post-tax NPV (10%) of US$1.97 billion and pre-production capital of US$377 million. In August 2025, the Project reported reduced C1 cash costs to US$27.28/dmt FOB Santana and US$55.46/dmt CFR China.

In that context, Azteca’s restart is the near-term cash generator and credibility builder. Cash from early shipments can support staged development of the larger DR-grade project, while operating the plant strengthens the social licence to operate and demonstrates that Amapá is once again a producing asset.

Ownership and partner alignment

As at end-June 2025, Cadence’s total investment in Amapá is approximately US$15.5 million for a 35.7% equity stake. The offtaker is a UK-based international logistics, shipping and trading group with over a century of sector experience – helpful for marketing, shipping and execution. Importantly, Cadence earns pro-rata economics and a share of the marketing fee from Dyke 5 production under the offtake.

Josh’s take: positives, risks and the setup for investors

What looks positive

• Funding lined up: Heads of Terms for US$4.6 million with drawdown linked to milestones keeps discipline tight.
• Per-tonne repayment: Aligns returns with output and avoids an equity raise in this announcement.
• Economics: Low FOB costs (US$37/t) and CFR costs (~US$79/t) against ~US$120/t pricing indicate healthy early margins.
• Speed: First production targeted around three months after licence issuance points to near-term cash generation.
• Strategic: Early cash flow and operating credibility de-risk the larger 5.5 Mtpa DR-grade project with US$1.97 billion NPV (10%).

What to keep an eye on

• Conditionality: Final assays and definitive documents still to go – standard, but not done until it’s done.
• Permitting: Archaeological survey and water/sewage engineering designs must be completed and approved.
• Execution: Refurbishment, commissioning and logistics for the first ~50,000 tonnes need to run to plan.
• Market exposure: Iron ore prices can move; margins depend on realised pricing and product specifications.
• Feed and recoveries: Dyke 5’s ~2 million tonnes at ~55% Fe is a solid start, but long-term tailings processing needs further study.

Bottom line

This is a meaningful step in Cadence’s staged strategy at Amapá. The prepayment offtake backs a low-capex restart at Azteca, with cashflow expected from the first shipment and a circa 70% IRR on Cadence’s co-investment. If the conditions are met and the plant restarts on schedule, the early cash generation and operational proof-point should support momentum into the larger DR-grade development.

For now, watch for definitive agreements, permitting progress and a commissioning timetable. On delivery, this has the potential to translate into tangible cash returns while building the case for Amapá’s long-term scale.