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

Client
Sundance holds a majority interest in subsidiaries Cam Iron and Congo Iron, whose principal asset is the Mbalam-Nabeba project.

Project Description
Following the completion of a definitive feasibility study, which was released in 2011, Sundance’s focus was on the development of two mines, a new port and the required rail system to transport the ore from the mine to the port at a rate of 35-million tonnes a year.

The project now comprises:
– the development of an iron-ore mine, processing plant and associated infrastructure on Exploration Permit 92 held by Cam Iron in the Eastern province of Cameroon (Mbarga); and
– the development of an iron-ore mine, processing plant and associated infrastructure on the Mining Permit Nabeba Bamegod held by Congo Iron, in the Sangha province of the RoC (Nabeba).

The focus is to develop the mines at an increased capacity of 40-million tonnes a year of high-grade hematite for a life-of-mine of about 13 years, and then at least 35-million tonnes of a high-quality concentrate for a further 15 years.

The project will use a 540 km rail line dedicated to the transport of iron-ore through Cameroon and a dedicated mineral export terminal designed to receive bulk iron-ore carriers of up to 300 000 t.

The rail and port infrastructure will be financed, built and owned by the government of Cameroon.

Net Present Value/Internal Rate of Return
Not stated.

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 has entered into a transition agreement with the Cameroon government that will result in government funding the port and rail infrastructure required for the Mbalam-Nabeba iron-ore project through a loan from China or other ‘friendly countries’.

The Cameroon government has started the process to select an engineering, procurement and construction (EPC) contractor to develop the rail and port infrastructure to support its application for a loan from financial institutions.

It will likely take government 6 to 12 months to secure the required funding.

The Cameroon government will own 98% of the port and rail infrastructure entities, while Sundance subsidiary Cam Iron will own the remaining 2%, in recognition of the capital it has invested in that infrastructure.

Sundance will, however, be obligated to secure financing for the development of the mines within nine months after the Cameroon government achieves its financing commitment for the port and rail infrastructure.

If this is not achieved, Cam Iron could, at the request of the Cameroon government, be required to transfer Exploration Licence 92, which has been extended to July 24, 2017, to a nominee of government for no consideration.

Meanwhile, under the terms of the agreement, Cam Iron and fellow Sundance subsidiary Congo Iron will enter into take-or-pay agreements, incorporating a commercial tariff for each tonne transported and loaded using the port and rail infrastructure.

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 Antonio Capinha, tel +351 214 158 200, fax +351 214 158 700 or email Antonio.capinha@mota-engil.pt.