The share price of Cadence Minerals surged 35% in London on Monday morning as the company announced a financing agreement that will unlock investment in the Amapa iron-ore project, in Brazil.

Cadence has received bank credit committee approval for the secured bank creditors to execute a settlement agreement, paving the way for the company to vest an initial 20% in the Amapa project.

The agreement, CEO Kiran Morzaria said, meant that there was a “clear path and process to get Amapa recommissioned, licensed and back into production”.

Diversified major Anglo American sold Amapa in 2012 and mining ceased in August 2015. A judicial order in early 2019 offered investors and creditors the opportunity to file a revised judicial restricting plan, which Cadence and joint venture (JV) partner Indo Sino took up.

Cadence could earn up to a 27% interest in the JV company, which would own the Amapa iron-ore mine. To acquire the 27% interest, Cadence will investment $6-million over two stages in the JV company.

The approval of the Amapa settlement agreement remained subject to completion of Know Your Client requirements and finalisation of documentation.

Nonexecutive chairperson Andrew Suckling described the bank credit committee approval as a “landmark” for the Amapa mine, its employees and the wider community.

“In my time working with commodity projects around the world, I have rarely, if ever, seen a lapsed mining project of this sort of potential,” he said in a statement.

The Amapa mine, under the ownership of Anglo American and Cliffs, produced its first ore in 2008, ramping up to 6.1-million tonnes of iron-ore concentrate production in 2012. The project has a mineral resource of 176.7-million tonnes, grading 39.7% iron in the indicated category and 8.7-million tonnes at 36.9% in the inferred category.

Cadence said Morzaria visited Amapa last week and reported that rapid progress was being made with the reconstruction of some of the infrastructure.

Cadence’s stock surged 35% to 23.5p each on Monday.