The resources through convertible notes will meet its pre-development capital expenditure.
Sundance Resources Limited, an Australian firm that is partnering with Cam Iron to develop the multi-billion Mbalam‐Nabeba Iron Ore Project in Cameroon and Congo has fetched $40M (about FCFA 19,450,698,745.15) in the stock exchange market, through the issuance of convertible notes, to meet up with the pre-development capital expenditure of the project.
According to a release published on its website on November 5, 20 million dollars is received from Noble Resources International Pte Ltd and the other 20 million dollars from an investor consortium comprising; Blackstone Alternative Solutions, L.L.C., the D. E. Shaw Group and Senrigan Capital. “The funds will be used for a working capital and to meet pre-development capital expenditure of the Mbalam-Nabeba Iron Ore Project,” the release quotes Sundance Managing Director and Chief Executive Officer (CEO), Giulio Casello, as saying.
On the state of advancement of the project, the Sundance release of October 30, 2013 indicates that following the decision to end the takeover discussions with Hanlong Mining, Sundance was approached by a number of groups with a view to discussing how they may become involved in the Mbalam‐Nabeba Iron Ore Project. “These groups come from a range of countries and have widely diversified interests in areas such as resource projects, infrastructure provision and steel making. These groups also expressed a range of views about how it would be possible to structure transactions which bring them into this project. These included the potential for some groups to provide port and rail solutions through to direct investment in the project. Sundance’s preferred position remains that the total Mbalam‐Nabeba Iron Ore Project, encapsulating the mines and transport infrastructure, will be operated and controlled as one entity in order to maximise operational efficiences,” the release states. Tender documents, it adds, have been issued to Engineering, Procurement and Construction contractors for rail and port infrastructure construction and financing. An annual general assembly meeting of Sundance is announced for November 29, 2013 in Perth, Western Australia, to look at the balance sheet and prospects with the shareholders.
When the mining agreement of the project was signed on November 29, 2012, Sundance was given 18 months to mobilise the project’s finances before it is served a mining permit for production to begin. Some 8.7 billion US dollars (about FCFA 4,350 billion) is needed for the project with FCFA 2,500 billion for the first phase and FCFA 2,400 billion for the second. With the variation in exchange rates, the amount could have changed.
It will produce 35 million tons of iron ore per annum and generate royalties to the tune of 600 billion US dollars in 25 years. Cam Iron will construct a 510-km rail line for the transportation of iron ore from the Mbarga Mine to the Cameroon coast with a 70-km rail spur line to connect to the Nabeba Mine in Congo. It will also build a deep water iron ore export terminal in Lolabe-Kribi capable of taking bulk “China Max” iron ore carriers.
