Sundance Resources has executed a term sheet for A$1.3 million in new funding and a separate term sheet to extend the maturity date of its existing convertible notes due for repayment on 23 September 2017 to 23 September 2019, and increase the redemption amount, following negotiations with convertible note holders.
The new funding and extension of existing notes will assist Sundance Resource in an enhanced strategy to find a partner for the Mbalam Nabeba iron ore project in Cameroon.
The company will be supported in pursuing this strategy by Noble Resources International and its in-house China experts. Noble is an existing note holder and part of the group providing additional funding.
Sundance Resources is also undertaking further cost reduction initiatives, with key executives voluntarily reducing their cash salaries to support the company’s development strategy through 2017.
These developments are important in moving the Mbalam Nabeba project forward in partnership with the Cameroon and Congo governments.
With the recent stabilisation of iron ore prices and the strong outlook for steel in China and internationally, Sundance Resources remains confident about the continuing need for high quality iron ore. With its strong economics and government support, Mbalam Nabeba remains well placed to meet demand from steel producers into the future, The company said.
It added that it will continue to work with the governments of Cameroon and Congo on funding for the port and rail infrastructure through China and other international financial markets.
To support this process and the process of identifying a partner to assist in funding the development of the Mbalam and Nabeba mines, a sub-committee of the company's board will be established. The sub-committee will include China experts from within Noble and other parties as required.
“The cvompany has not wavered in its belief that the Mbalam Nabeba iron ore project will be developed and that belief is shared by our note holders, whose ongoing support has been critical, says Sundance Resources MD Giulio Casello.
“With the extra funding and the stabilisation of the iron ore price, we are heading into a new and improved environment which will support our development strategy. “We continue to take measures to preserve cash while directing appropriate resources towards progressing Sundance and the Mbalam Nabeba project.”