Cadence signs letter of intent to acquire stake in Iberian projects

(Sharecast News) - Cadence Minerals announced on Tuesday that it has signed a letter of intent (LOI) with Hesperian Metals, to acquire up to a 40% stake in two exploration projects in Spain and Portugal focussed on tungsten, antimony, and gold. The AIM-traded firm said the investment would be supported by a £1m fundraise, secured through a placing with predominantly institutional investors.

It said the projects would include the Pompeya Project in Spain, a 470-square-kilometre license area with multiple mineralised skarns and historic mine workings.

Initial investigations there confirmed the presence of tungsten ore, or scheelite, at surface and within old mine workings.

Rock chip samples from Pompeya returned tungsten oxide grades ranging between 3.3% and 4.8%.

The Sarzedas Project, located near Castelo Branco in eastern Portugal, meanwhile covers 57 square kilometres and contains several historic antimony, tungsten, and gold deposits, as well as waste dumps.

Grab samples from the dumps returned gold grades ranging between 0.4 grams and 109.9 grams per tonne, with a median grade of 30.9 grams per tonne.

The board noted that the Iberian Peninsula had a history of tungsten production, including notable deposits such as the Los Santos and Panasqueira mines, currently owned by Almonty Industries.

Tungsten, identified globally as a critical material due to its economic importance and limited substitution alternatives, had seen its benchmark price for ammonium paratungstate rise from $210 per metric ton unit in 2020 to about $390.

If the investment proceeds, Cadence said funds would be directed towards advancing exploration of the Pompeya and Sarzedas projects over the next six months, with a focus on identifying mineral resource targets.

"As our flagship Amapá project continues to advance and de-risk, our board is mindful of the changing macro landscape and our priority to ensure Cadence has maximum exposure to the critical minerals needed for energy and technology markets," said chief executive officer Kiran Morzaria.

"As such, we are excited by the potential opportunity with the Pompeya and Sarzeda projects, particularly given the increasing importance of tungsten as a strategic raw material.

"I look forward to reporting back on progress at the end of the exclusivity period with Hesperian Metals.

"I am also pleased to confirm the company has successfully raised £1m before expenses to fund our investment into the Pompeya and Sarzeda projects and our continued investment into Amapá."

At 1349 GMT, shares in Cadence Minerals were down 41.78% at 1.6p.

Reporting by Josh White for Sharecast.com.