The stakes: For Australian Sundance Resources, to finally start operating the Mbalam-Nabeba project.
Historic operator of the Mbalam-Nabeba mining project, Australian Sundance is giving its Chinese partner AustSino one last chance to reach a final agreement.
For Australian Sundance Resources, which has been piloting the Mbalam-Nabeba iron ore mining project on the Cameroon-Congo Brazzaville border since 2012, the years have been similar. Already delayed on several occasions due to the failure of successive partners, the group is once again having to be patient. On Monday 6 July, Sundance announced that it would extend the deadline for signing an agreement with Chinese partner AustSino to 30 September. The extension reflects the difficulty of finding a mutually acceptable arrangement. Earlier, on 30 June, Sundance Resources had in fact acknowledged that it had reached an impasse with its partner AustSino, with whom it has been in talks since 2018 to finally launch this major mining project: according to the Australian group’s estimates, the mining resources at the Mbalam-Nabeba site would be estimated at more than 775 million tonnes of iron ore. Enough to produce nearly 35 million tonnes per year during the first phase of operation, which should last about ten years.
In its press release, however, Sundance management set new conditions for AustSino, a reminder that the search for a final agreement would not be at any price. « The agreement is extended until September 30, 2020 on the condition that : (a) no later than July 10, AustSino files a draft notice of meeting with the Australian Securities Exchange for review; and (b) no later than July 17, AustSino demonstrates to Sundance’s reasonable satisfaction that it has made progress in the financing (of the project) for the completion of the agreement, » the junior cautioned in its note.
As a reminder, the agreement between the two companies provides for the sale of a majority stake in Sundance to AustSino- for $58 million- with the Chinese group then taking charge of developing the Mbalam-Nabeba project, the total cost of which is estimated at $3.5 billion.