Sundance Resources Limited (ASX: SDL) has provided investors with its annual financial report for the year ended 30 June 2020.
Sundance, AustSino Resources Group (‘AustSino’) and the Sundance Noteholders signed an agreement on 24 September 2018 (‘Previous Agreement’ or “Agreement”) which was subsequently terminated then superseded by the new agreement announced on 8 July 2019 (‘New Agreement’) which has subsequently been conditionally extended to 30 November 2020. The New Agreement covered the development strategy for the Project including an integrated port, rail and mine in Cameroon and Congo. Details of the New Agreement are below. As part on the implementation of this development strategy, the agreement signed between the Cameroon Government and CamIron in June 2015 (“Transition Agreement”) in which the Cameroon Government was to fund the rail and port will need to be terminated and Sundance does not expect this to be an issue.
The development strategy is supported by a new consortium of potential Chinese partners interested in participating in the funding, construction and operation of the Project.
These potential consortium partners attended meetings held in Cameroon at the end of February 2019 and they have all signed non-binding MOUs or similar documents with AustSino. In addition, a non-binding consortium acknowledgement agreement (“Consortium Agreement”) was signed on 28 February 2019 between the Chinese parties, Sundance and AustSino. The Chinese parties together represent a world class syndicate and are:
Shenzhen Yantian Port Holdings Co Ltd.
China Railway Construction Corporation International Co Ltd.
Hong Kong Baofeng International Co Ltd.
Shanghai Tsingshan Mineral Co Ltd.
Details of the Consortium Agreement are included in the Sundance announcement of 8 July 2019. Pursuant to the Consortium Agreement, the parties intend to use their reasonable endeavours to complete all necessary commercial negotiations, due diligence and legal documentation for funding and developing the Project.
Representatives of the Cameroon Government visited China during November 2019 to meet with the potential consortium partners. The potential partners expressed their support of the Project which was well received by the Cameroon Government Representatives.
Follow up meetings occurred in January 2020 in Cameroon between Sundance, AustSino and Cameroon Government representatives at which the Cameroon Government reiterated its support for the Project and the proposed transaction in which AustSino will take a controlling position in Sundance. The transaction is described in the Sundance, AustSino and Noteholder Agreements section below.
Due to COVID 19 restrictions there have been no further meetings in Cameroon or Congo this financial year, but Sundance continues to maintain relationships during this time through the local offices of Cam Iron and Congo Iron.