Sundance and Hanlong buy more time

A MINISTERIAL committee appointed by the Cameroon government to facilitate the total approvals process for the $US4 billion ($A3.7 billion) Mbalam iron ore project has bought more time for Sundance Resources and its Chinese suitor Hanlong Mining to finalise all conditions precedent on the proposed takeover.
Sundance and Hanlong buy more time Sundance and Hanlong buy more time Sundance and Hanlong buy more time Sundance and Hanlong buy more time Sundance and Hanlong buy more time

Sundance MD/CEO Giulio Casello


The pair locked in an eight-week extension through to April 27, from the previous deadline of February 29, to receive the terms of the ratified Mbalam convention and the mining permit from the Republic of Congo in order to meet all conditions precedent to allow the scheme of arrangement for the $A1.65 billion takeover offer to proceed to the first court hearing.

Once the permit and convention have been finalised, Hanlong has three weeks to conclude a credit approved term sheet with the China Development Bank.

Under the scheme, Sundance shareholders will receive a significant premium price of 57c cash per share compared to the company’s current share price of 40.7c and are due to vote on the deal in April with the transaction expected to be completed the following month.

The committee, which will be formed under the authority of the country’s prime minister and head of government, will comprise eight cabinet ministers and will be responsible for all the key approvals and strategic issues relating to the project, as well as finalisation of the terms of the Mbalam convention.

Sundance managing director and chief executive Giulio Casello noted the committee was expected to deal with any other issues which might arise beyond the fiscal and legal terms of the convention.

Key tasks for the committee will include developing strategy and proposing measures aimed at bringing the project into development and ensuring compliance with legal and regulatory provisions.

It will also review and validate feasibility studies and environmental impacts on any development, as well as put forward measures to facilitate its legal, technical and financial aspects.

Other objectives include establishing coherence between Mbalam and all other mining, infrastructure, energy and socio-economic projects in the region, as well as developing draft conventions which would be submitted to the government.

Casello said at a meeting held between Sundance representatives and Ministerial Committee president Louis Paul Motaze in Cameroon on Tuesday, the government reiterated its commitment to concluding negotiations for the Mbalam convention in a timely manner and understood the importance of the timing to enable project financing.

Stage 1 of the Mbalam development is based on a forecast average production rate of 35 million dry tonnes per annum of direct shipping ore averaging 63.6% iron over 10 years.

Stage 2 is based on continued production of 35Mdtpa of itabirite hematite concentrate product at 66% iron over 15 years.

First ore is expected by the last quarter of 2014.

Shares in Sundance were down 4.24% or 1.8c in morning trade to 40.7c.