Name and Location
Mbalam-Nabeba iron-ore project, between Cameroon and the Republic of Congo (RoC).

Client
Sundance Resources.

Project Description
Mbalam-Nabeba has total Joint Ore Reserves Committee-compliant global high-grade hematite resources of 775.4-million tonnes at 57.2% iron, of which 748.0-million tonnes are classified as indicated. These mineral resources include reserves of 436.3-million tonnes at 62.6% iron.

The project further boasts 4.05-billion tonnes of itabirite hematite resources at 36.3% iron, with 1.43-billion tonnes at 38% iron classified as indicated resources.

The project scope will be to mine 35-million tonnes a year from iron deposits in Cameroon and the RoC and to construct a 510 km rail line from the Mbarga mine, in Cameroon, and a 70 km rail spur line, connecting the Nabeba mine, in the RoC. The rail line/spur will transport iron-ore to the Cameroon coast.

The scope will also include construction of a new deep-water iron-ore export terminal at Kribi, which will accommodate bulk iron-ore carriers of 300 000 deadweight tons in size.

The project will be completed in phases, with Stage 1 focusing on a direct shipping ore (DSO) project for a minimum of ten years and Stage 2 extending the life of the operation by more than 15 years for the production of high-grade itabirite hematite concentrate.

Stage 1’s mineral reserves currently total 436.3-million tonnes at 62.6% iron.

Value
A capital expenditure of $4.6-billion will be required to start up the DSO operation.

Duration
Construction is planned for late 2014, with a targeted first iron-ore shipment planned for the last quarter of the same year.

Latest Developments
Sundance Resources has appointed Mota-Engil Africa as the engineering, procurement and construction (EPC) contractor to build the port and rail infrastructure for the Mbalam-Nabeba project.

Sundance has also appointed Standard Bank to advise on funding and be the lead debt arranger for the project’s rail, port and mines in Cameroon and the RoC.

Mota-Engil Africa’s role includes detailed design, construction, testing and commissioning of:
• the 510 km railway from the Mbarga mine, in Cameroon, to the mineral terminal facility at Lolabe on the west coast of Cameroon;
• the 70 km rail spur line from the Nabeba mine, in the RoC, to the Cameroon railway; and
• a 35-million-tonne-a-year deep-water mineral terminal facility, including stock yards, capable of loading ‘China-max’ vessels.
 
Mota-Engil Africa and Sundance signed the binding and bankable EPC contract for the construction of the Cameroon portion of the port and rail infrastructure component of the project at a signing ceremony in the capital city of Yaoundé on June 5, 2014.

A separate EPC contract for the 40 km spur line rail component for the Nabeba mining project, in the RoC, is expected to be signed shortly by Sundance and its subsidiary company Congo Iron SA and Mota-Engil Africa.

To secure agreed terms for the EPC contract and indicative terms for debt funding, Sundance, with the assistance of its financial adviser and other equity arrangers, will proceed with delivering the project equity funding strategy.

This will involve parties who have previously expressed interest in the project, subject to confirmation of an EPC price and debt solution.

The provision of project equity is expected to be finalised in parallel with reaching financial close for the debt and equity funding by mid-2015.

Sundance is also advancing plans with Standard Bank and Moto-Engil for an alternative funding strategy, based on an own, operate and transfer model for the port and rail infrastructure.

If successful, these negotiations could result in a greatly reduced equity requirement from Sundance and its partners.

Key Contracts and Suppliers
WorleyParsons (prefeasibility study); Mota-Engil Africa (EPC) and Standard Bank (funding and lead debt arranger).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Sundance Resources, tel +61 8 9220 2300, fax +61 8 9220 2309 or email info@sundanceresources.com.au.
Mota-Engil Africa communication office Dr António Capinha, tel +351 214 158 200, fax +351 214 158 700 or email Antonio.capinha@mota-engil.pt.