Perth, Australia — 10 April 2013 – International iron ore company Sundance Resources has terminated the agreement with China’s Hanlong Mining Investment Limited under which Hanlong was to have acquired 100% of Sundance.
Sundance says that it has decided to terminate the agreement because the funding condition was not met, and after being informed by Hanlong that it was unlikely to meet the other required conditions. As a result of the termination of the agreement, the adjourned meeting of Sundance shareholders that was scheduled for 7 May 2013 will not proceed.
“While it is disappointing after all this time that we will not complete this transaction, the board of Sundance believes it is in its shareholders’ best interests to terminate the agreement with Hanlong,” said Sundance chairperson George Jones. “This will enable us to focus all our efforts on discussions with other parties which have expressed strong interest in the Mbalam-Nabeba Project,” he added.
Sundance has advised that the convertible note subscription agreement with Hanlong also terminates effective as of midnight on the evening of 8 April 2013, which means that the Tranche 2 and Tranche 3 subscriptions will not proceed. However, the existing AU$5 million Tranche 1 convertible notes will be escrowed for six months from 8 April 2013 and, subject to conditions, the maturity date of these notes is now extended to 30 June 2014, a Sundance statement said.
Hanlong has requested the withdrawal of the National Development and Reform Commission (NDRC) provisional approval granted to Hanlong and extended by NDRC earlier this year. This removes Hanlong’s exclusivity as proponent for the Mbalam-Nabeba project in China.
The statement adds that over the past 18 months, there have been substantial achievements in respect to the growth and development of the Mbalam-Nabeba iron ore project, which is located in Cameroon and the Republic of Congo.
These include: the increase in probable ore reserves from 352.3Mt to 436.3Mt at 62.6% Fe; an increase in high grade hematite resources (indicated and inferred) from 521.7Mt to 775.4 Mt at 57.2% Fe; as well as an increase in Itabirite resources (indicated and inferred) from 2.3 Bt to over 4Bt at 36.3% Fe.
Sundance has also achieved environmental approvals in Cameroon and the Republic of Congo for the mines, port and railway; the signing of the Mbalam Convention in Cameroon including agreement on key financial terms; and the issuance of the Nabeba mining permit by Presidential Decree for the Republic of Congo.
"Sundance’s Mbalam-Nabeba Project is significantly more valuable today than when the Hanlong bid was first made, and Sundance believes that it continues to receive support from the governments of Cameroon and the Republic of Congo and from China for this project,” said Jones.
“Sundance is engaging with other potential Chinese strategic partners with a view to developing the project, and at the same time we will also progress discussions with non-Chinese parties,” he added.
“The Mbalam-Nabeba project has been globally recognised as an excellent asset which is financially robust and will unlock a new world class iron ore region in Africa. We are confident that we can find a stable partner to help us bring this project into production,” Jones concluded.
Source: Sundance Resources. For more information, click here.