The company has signed a binding Memorandum of Understanding (MOU) with Tidfore Heavy Equipment Group Co. and Cam Iron S.A. Cam Iron a subsidiary of Sundance which has a mining permit application over the previous EP92 in Cameroon.
The purpose of the MOU is to provide a framework for cooperation between the parties and their joint venture partners in order to establish the required consortium of expertise to fund or assist in sourcing the funding to construct the infrastructure and to bring the project into operation.
Tidfore is a private Chinese company established under the laws of the Peoples Republic of China. It is involved in supplying, manufacturing and installing high-end material handling, port and offshore engineering equipment.
Tidfore has signed a Joint Venture Framework Agreement with China Civil Engineering Construction Corporation (CCECC). CCECC is a subsidiary of the state-owned enterprise China Railway Construction Corporation (CRCC).
The JV defines the principle rights and obligations of both parties.
In particular, Tidfore has responsibility for the port construction and CCECC for the railway construction and assisting Cam Iron and Congo Iron S.A. Congo Iron is a Sundance subsidiary which holds the Nabeba permit in Congo and financial institutions to negotiate project loans and project financing.
Under the MOU, Sundance will sell 51% of its ownership in Cam Iron to Tidfore for a value to be agreed or independently valued once:
- Cam Iron obtains title to the tenure over the area covered by the previous EP92 for a minimum of three years. Currently, Cam Iron has a mining permit application lodged over this area;
- the Government of China approves the provision of Sinosure insurance in order to enable Chinese funders to consider funding the Project; and
- formal agreements have been agreed and executed.
Government reviewing extension of Convention
On 31 July 2017, Sundance Resources announced it had reached an agreement with the government of Cameroon to initially extend the Mbalam Convention by six months to 26 January 2018, with a further six-month extension being available if Sundance Resources could show substantial progress on funding the project either by itself or with a credible partner.
Sundance, Tidfore and CCECC met last week with representatives of the government in Cameroon to outline their proposal for the development of the project. The government is yet to determine whether it will grant Sundance the further extension of the Convention.
“Sundance is pleased to have reached an agreement with substantial parties to progress the development of the Mbalam-Nabeba iron ore project and now awaits the decision of the government of Cameroon on whether it will grant a further extension,” says Sundance Resources CEO and MD Giulio Casello.
“Even though there is still substantial work required to obtain the funding required, the high quality, low costs and large quantity of the Mbalam-Nabeba iron ore fits well into the needs of the future of the Chinese steel industry. Together with our current partners we have the basics required to bring this project into production.”