Sundance wins six more months from Cameroon for iron ore project
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Sundance Resources has finally received word from the Cameroon government that it has secured a six-month extension to the agreement over its Mbalam-Nabeba iron ore project.
The Mbalam convention was signed by Sundance (ASX:SDL) and the Cameroon government back in 2012 and paved the way for the development of the project.
An initial six-month extension to the convention expired on January 26 and Sundance was required to show substantial progress on funding the $1 billion project either by itself or with a credible partner before it could secure a further extension.
Just four days before the deadline, the company announced it had inked a binding memorandum of understanding with private Chinese firm Tidfore Heavy Equipment Group, which has a partnership with state-owned China Civil Engineering Construction Corporation (CCECC) to build the necessary port and railway infrastructure.
Following recent meetings between representatives of the Cameroon government, Sundance and Tidfore, the government agreed to grant the extension, Sundance told investors today.
In the next six months, Sundance has to find a partner to take equity in the company or the Mbalam project for the government to continue to support the project.
“They’re not specifying who it is, they’re not specifying how much it is, they’re not specifying whether it needs to be Chinese or not,” chief Giulio Casello told Stockhead. “So we’ll work on that to September and then we’ll see where we are.”
Mr Casello says that while Tidfore may be the company to help Sundance to financing, the preference is to strike a deal with a Chinese steel mill.
“We had started that process a year ago, but what was the hold up on the process was who’s doing the infrastructure,” he said. “Now that we’ve signed Tidfore/CCECC and the Cameroon government will source the funding, we can renew [those talks] with the steel mills and other traders/iron ore players.”