PERTH (miningweekly.com) – Iron-ore developer Sundance Resources on Wednesday told shareholders that the signing of an engineering, procurement and construction (EPC) contract for the construction of the port and rail infrastructure for the Mbalam-Nabeba iron-ore project had been postponed at the request of the contractor.
The selected EPC contractor said that while it continued to support the project, the signing of the contract had needed to be postponed until market conditions improved and the EPC contractor was able to progress its financing.
The EPC contract between the government of Cameroon and the Chinese State-owned construction company had been slated for signing in the December quarter of last year.
Sundance reported that the postponement of the EPC contract was unexpected for both the company and the government of Cameroon, given the recent advances made with the EPC contract.
The company added that it was assessing the impact that this postponement would have on the Mbalam-Nabeba project.
In July, Sundance entered into a transition agreement with the government of Cameroon, which would see the state government fund the port and rail infrastructure required for the iron-ore project.
Under the terms of the transition agreement, the Cameroon government had committed to funding the development of the port and rail infrastructure in Cameroon through a loan from China or other “friendly countries”.
The Cameroon government would own 98% of the port and rail infrastructure entities, while Sundance subsidiary Cam Iron would own the remaining 2%, in recognition of the capital it had already invested in that infrastructure.
Meanwhile, Sundance said on Wednesday that the company had also made significant progress in reaching a settlement with David Porter in relation to Supreme Court actions launched by Porter in 2015.
In December last year, the Western Australian Supreme Court ordered Sundance to pay damages of more than A$5-million in lieu of a grant of 10-million options, relating to an agreement made with Porter in 2006.
The company said that it hoped to finalise the settlement with Porter shortly, after which share trading would resume.