Cameroon/Republic of Congo – ASX-listed iron ore junior Sundance Resources has said that it fully supports the Cameroon government’s excellent progress on negotiations to appoint an engineering, procurement and construction (EPC) contractor for the port and rail components which will support the development of its Mbalam‐Nabeba iron ore project located in Cameroon and the Republic of Congo.
Sundance said its quarterly activities report for the period ended September 30 that although the iron ore market remained challenging during the period, Sundance together with the government of Cameroon continued to move forward with a high level of confidence.
Sundance believes the project is better positioned than ever before to achieve funding due to the improved project fundamentals and the progress the government of Cameroon is making on the rail and port EPC contract.
Sundance has provided the government of Cameroon technical and commercial support during the selection of the preferred contractor and through the contract negotiations. This support will continue during the financing stages of the port and rail infrastructure.
Sundance expects that an EPC contract will be signed with a Chinese state‐owned construction company in the December quarter, which will support the Cameroon Government’s application for a sovereign loan from China and possibly other friendly countries to construct the port and rail infrastructure.
The company expects it will take approximately six months for the Cameroon government to finalise their financing commitment (credit approved term sheet) for the port and rail infrastructure. It is anticipated that construction will commence before the end of 2016 and, based on previous understanding of the length of construction time for the port and rail, it is expected that first commercial shipment from the project should occur sometime in 2020.
Meanwhile, during the quarter, Sundance was also able to obtain an additional $7 million investment into the company through a subscription for new convertible notes.
The working capital raised from the issuance of the new $7 million 2015 Investor Group Notes will allow the Company to continue the process of negotiating and then agreeing the terms of an equity investment into the mine infrastructure. The mine infrastructure incorporates the mine processing plants and their associated infrastructure such as camps, aerodrome, power stations and roads.
Sundance has commenced the process of re‐engaging with a number of potential equity investors in China – the progress of which will be dependent on the signing of the port and rail EPC contract between the Cameroon government and the EPC contractor.
Once an equity partner has been identified, Sundance will work with them to select an EPC contractor for the Mine Infrastructure and then to arrange the required debt funding during 2016.