Sundance Resources (ASX: SDL) has wrapped up the September quarter with $2.31 million cash in the bank, after having recently completed a capital raising and exercise of listed options. The Company has reaffirmed its belief that China is best placed in the long-term to source a partner and funding for its Mbalam-Nabeba iron ore project. Discussions with EPC contractors are ongoing, with some considering a role in building and assisting in obtaining funds for the project.
Summary:
- Share Purchase Plan and exercise of Listed Options raises $2.2 million
- Ongoing discussions with EPC contractors
- $2.319 million on hand at 30 September 2017
Sundance Resources Limited (ASX: SDL) (“Sundance” or “Company”) provides the following information about activities for the Quarter ended 30 September 2017:
SHARE PURCHASE PLAN
On 25 September 2017 Sundance announced that that the Share Purchase Plan (“Plan”) raised a total of $1,524,250 from eligible shareholders, which was above the targeted and underwritten amount of $1,000,000.
As described in the Plan, Sundance also offered to the Underwriter (Patersons Securities Limited) the right to facilitate a placement of new shares in the Company at the same issue price offered under the Plan (“Top-up Placement”), for the purpose of providing further working capital to enable the Company to engage with strategic partners to develop the Mbalam-Nabeba Iron Ore Project. The Top-up Placement raised a further $368,000 from sophisticated investors and resulted in the issue of 92,115,143 new fully paid ordinary shares in the Company.
The Plan and the Top-up Placement raised a total of $1,910,250 before costs resulting in the issue of 473,654,568 shares on 25 September 2017.
The number of shares was determined by applying a 20% discount to the five-day Volume Weighted Average Price (“VWAP”) before the issue date of the shares (that is from 18 September to 22 September 2017 inclusive). The five-day VWAP was calculated at $0.004994, resulting in the issue price being $0.003995.
LISTED OPTIONS EXPIRED
On 3 February 2016, Sundance announced an entitlement offer that included the issue of one free option for every new share subscribed. These options had an exercise price of $0.006 each with an expiry date of 31 August 2017. A total of 46,174,717 options were exercised resulting in cash proceeds of $277,048 being received prior to the expiry date of 31 August 2017. All unexercised listed options have now expired and there are no longer any listed options on issue.
PROJECT UPDATE
On 31 July 2017, the Company announced that it had reached an agreement with the Government of Cameroon to initially extend the Mbalam Convention (“Convention”) by 6 months to 26 January 2018. A further 6-month extension will be granted if Sundance can show progress on funding the Mbalam-Nabeba Iron Ore Project (“Project”) either by itself or with a credible partner In Cameroon, the Company has ore reserves of 154Mt at 62.9% covered by the Convention, whilst in Congo the Company has reserves of 363Mt at 61.9% under an issued 25 year Congo Mining Permit.
The Company has seen increased interest in the Project from third parties during the quarter, especially from infrastructure engineering, procurement and construction (“EPC”) contractors who are considering a role in building and assisting in obtaining funding for the Project.
A number of encouraging meetings were held during the Quarter with EPC contractors and others who have shown strong interest. Whilst the Company believes that the caliber of these parties would satisfy the needs of the Cameroon Government, these discussions are incomplete and still ongoing at the time of issuing this report.
The Company still believes that China is best placed in the long term to source a partner and funding for our Project. The Project’s iron ore quality and the scale of the deposits fit with the strategic needs of China to source superior quality high iron and low impurity iron ore, as well as China’s determination to deal with its environmental footprint by shutting many local low-grade iron ore mines and replacing their output with high-quality ore. Sundance’s ore quality is 63% Fe for the first 10 years of the Project. Stage 2 of our Project will produce a concentrate of 66 – 68% Fe from near 6 billion tonnes of resources.
CORPORATE
Total cash outflow from operating activities for the period was $559,000 Sundance ended the September 2017 Quarter with $2,319,000 in cash and deposits.
EXPENDITURE
The Pro-forma appendix 5B – Statement of Consolidated Cash Flows is provided in a separate report.
