Cadence Minerals plc (AIM: KDNC) is pleased to announce that LCM Funding SG Pty Ltd (“LCM “) has completed due diligence and issued a Funding Confirmation Notice (“FCN”) under the Arbitration Funding Agreement (“AFA”) entered into between LCM, Cadence and Cadence’s wholly owned subsidiary, REM Mexico Limited (“REM Mexico”), regarding claims in relation to Cadence and REM Mexico’s investments in the Sonora Lithium Project in Sonora State, Mexico. With funding secured, Cadence and REM Mexico intend to commence international arbitration against the United Mexican States under the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the United Mexican States for the Promotion and Reciprocal Protection of Investments (“UK-Mexico BIT”).

Following LCM’s issuance of the FCN, non-recourse litigation financing is now available to Cadence and REM Mexico, subject to the terms of the AFA, to support Cadence and REM Mexico in pursuing their claims under the UK-Mexico BIT. Under the signed arrangements, the LCM has agreed to pay Cadence and REM Mexico’s arbitration costs in accordance with an agreed budget on a non-recourse basis.

Highlights

Kiran Morzaria, Chief Executive Officer of Cadence Minerals, commented:  “We are pleased that LCM has completed its due diligence and issued the Funding Confirmation Notice in relation to Cadence and REM Mexico’s legal claims regarding the Sonora Lithium Project. This is an important milestone as it provides dedicated non-recourse funding to support the advancement of the claims. 

The measures that Mexico took against our interests in the Sonora Lithium Project breached the protections afforded to us under the UK-Mexico BIT. This funding materially strengthens our ability to pursue the arbitration in an appropriately resourced manner, while preserving balance sheet flexibility and supporting our objective of protecting shareholder value and seeking appropriate redress.”

Cadence and REM Mexico’s legal claims under the UK-Mexico BIT

Cadence and REM Mexico’s claims arise from measures taken by the United Mexican States that destroyed the value of Cadence’s investments in the Sonora Lithium Project. In particular, those measures include the cancellation of the mining concessions in which Cadence and REM Mexico held a significant interest against the backdrop of Mexico’s nationalisation of its lithium sector. Those measures breached protections owed by Mexico to Cadence and REM Mexico and their investments in Mexico under the UK-Mexico BIT, including protections against unlawful expropriation and unfair, arbitrary or discriminatory treatment.

Cadence and REM Mexico have previously approached the Mexican Government to seek consultations and negotiations under the UK-Mexico BIT and now intend to pursue their claims in international arbitration to protect the value of their investments and seek appropriate redress. Notwithstanding, Cadence and REMML remain open to a negotiated settlement with Mexico.

Arbitration Funding Agreement

Under the Arbitration Funding Agreement, sums advanced by LCM are made available on a non-recourse basis and are not repayable by Cadence or REM Mexico if their legal claims do not succeed and no recovery is made.

For further information, contact:

 
Cadence Minerals plc +44 (0) 20 3582 6636
Andrew Suckling
Kiran Morzaria
Zeus (NOMAD & Broker) +44 (0) 20 3829 5000
James Joyce
Darshan Patel
Fortified Securities – Joint Broker +44 (0) 20 3411 7773
Guy Wheatley
Brand Communications +44 (0) 7976 431608
Public & Investor Relations               
Alan Green
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