The broader Amapá project remains Cadence’s main long-term value driver. It is a fully integrated iron ore operation with established mine, rail, port and beneficiation infrastructure, a JORC-compliant resource of 276Mt at 38% Fe and a proven and probable reserve of 195.8Mt at 39.3% Fe. The updated pre-feasibility study in 2024 confirmed the potential to produce 5.5Mtpa of 67.5% Fe direct reduction grade concentrate over a 15-year mine life.

In our January report, we valued Amapá at US$458m on an unrisked basis at 35.7% ownership to Cadence. Including Azteca at US$10m and deducting Cadence’s pro rata share of joint venture creditor obligations, our total attributable valuation was US$432m. Adjusting for Cadence’s increased 36.2% ownership gives a valuation of US$437m, or £322m (approx 73p).

We view the LI grant as a significant de-risking event and positive catalyst, although the LO, commissioning, execution and broader project financing remain key sensitivities. We expect the next key milestones to be site mobilisation, refurbishment progress and receipt of the LO ahead of first production and shipments.