01/07/2015 - 14:04

Cameroon seeks Chinese help at Sundance project

01/07/2015 - 14:04

Bookmark

Upgrade your subscription to use this feature.

The government of the Republic of Cameroon is planning to seek funding from China for the rail and port infrastructure at Sundance Resources' Mbalam-Nabeba iron ore project, allowing the Perth company to focus just on the mine development.

Cameroon seeks Chinese help at Sundance project
Sundance chief executive Giulio Casello.

The government of the Republic of Cameroon is planning to seek funding from China for the rail and port infrastructure at Sundance Resources' Mbalam-Nabeba iron ore project, allowing the Perth company to focus just on the mine development.

The infrastructure includes a 510-kilometre rail line dedicated to the transport of iron ore through Cameroon, a 70km rail spur line connecting the Nabeba mine in Congo, and the construction of a dedicated mineral export terminal designed for taking bulk iron ore carriers of up to 300,000 tonnes.

The government plans to secure a loan from China, as well as several other countries.

“Sundance is confident that this funding for the infrastructure will be obtained by the Cameroon (sic) government and this will allow the company to concentrate on the funding and the development of the Mbarga and Nabeba mines,” the company said.

If funding is secured, the Cameroonian government will own 98 per cent of the infrastructure entities and will charge Sundance a tariff to use it.

For the deal to be successful, however, Sundance must obtain financial commitment for the mines no later than nine months after the Cameroon government achieves its financing commitment.

The Cameroonian government expects to secure its financing commitment within six to 12 months.

If Sundance fails to meet this obligation, it will be required to transfer its held exploration permit to a nominee of the Cameroonian government’s choice for nil consideration.

“We believe this is the best outcome for our shareholders as the mines will be globally competitive, low cost producers of high quality iron ore,” Sundance chief executive Giulio Casello said.

The government of Cameroon has begun the search for an engineering, procurement and construction contract for the rail and port infrastructure.

Sundance plans to produce iron ore at the project under a two-stage operation.

Under the first stage, Sundance will produce iron ore at 62 per cent Fe at a rate of 40 million tonnes per annum for about 13 years.

Stage two, which is currently at a pre-feasibility stage, would then extend the life by a further 15 or more years.

Shares in Sundance were 4.7 per cent higher to 2.2 cents each at 2pm.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options