Page 10 - Sundance Resources 2014 Annual Report

8 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2014
MANAGING DIRECTOR’S REPORT
During the year I have invested significant time securing the
support of contractors, financiers and investors. Over this time I
have received some key feedback which is growing progressively
louder. And that message is: “This project is going to happen”.
I couldn’t agree with them more. The agreements with
Mota-Engil and Standard Bank, the recent investment of
$40 million into Sundance by highly experienced global
investor Gennadiy Bogolyubov, the signing of the key project
agreements with the Governments of Cameroon and Congo,
and the offtake agreement with commodities trader Noble
collectively provide overwhelming evidence that our project is
making the transition to construction and production.
The involvement of these groups reflects the outstanding
technical and economic strengths of our project. Put simply, I
have no doubt our project will be developed because it is too
good technically and economically not to be built.
The investor concern over the fall in iron ore prices is serving as
a timely reminder that Mbalam-Nabeba will enjoy some of the
lowest production costs in the industry. It’s at times like these
that projects like ours stand out. The global focus on iron ore
margins serves to remind the financial community – be they
investors, lenders or contractors – that our project is world-
class; and world-class doesn’t remain dormant.
I would also like to recognise the excellent work in our health,
safety, community and sustainability efforts as this will continue
to be an important element of our ongoing success. I would
like to thank our staff, contractors and shareholders for helping
Sundance make such significant progress towards the
development of Mbalam-Nabeba and I look forward to reporting
to you as we continue to advance our project.
Yours sincerely,
Giulio Casello
Dear Shareholders
One year ago I said the best position for our shareholders,
the Project, and for our in-country stakeholders was to move
forward with a renewed strategy to develop the Mbalam-
Nabeba Iron Ore Project.
Sundance’s Management, Perth office and in-country Cam Iron
and Congo Iron workforce have all persevered over the past
twelve months to progress this project to a point where it is
ready for development. Our focus is to continue to deliver on
our stated objectives, methodically ticking the boxes, which will
ultimately bring this project into production.
Most notably we appreciate the ongoing support of the
Governments of the countries we operate in. Last year we
celebrated achieving the Mbalam Convention in Cameroon,
and this year we also signed the Nabeba Mining Convention
with the Government of the Republic of Congo.
Sundance drilled its first exploration hole in June 2007 and our
exploration team’s success is apparent in the current resource
estimate that now incorporates assay results from over 1,100
drill holes. The Mbalam-Nabeba Iron Ore Project is one of the
only iron ore projects worldwide which features high grade
DSO, low production costs, proven reserves and has critical
government and environmental approvals in place.
The certainty of the quality of our asset was underpinned
by signing a binding off-take agreement with leading global
commodities trader Noble Resources International in March
2014. Noble has agreed to buy all product produced for the
first ten years of operation based on international standard
pricing benchmark (Platts IODEX 62% Fe CFR China less
freight costs) Free on Board (FOB) Lolabe Cameroon.
Our project area covers 1,740km2 in a location that, once the
port and rail infrastructure is in place, will unlock the potential for
a new world class iron ore region that could potentially produce
up to 100Mtpa. We took another step closer to unlocking that
potential with the announcement of Mota-Engil Africa as the
EPC contractor to build the port and rail infrastructure; and
Standard Bank as our lead arranger for debt finance and equity.
Signing of the Port and Rail EPC contract and the Concession Agreements in Cameroon