Page 11 - Sundance Resources 2014 Annual Report

SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2014 9
OFF-TAKE AGREEMENTWITH
NOBLE RESOURCES
The agreement stipulates that Noble must buy all product
produced by Mbalam-Nabeba for the first 10 years of
operation, minus any product that may be allocated to project
equity participants. Sales will be based on international
standard pricing benchmark (Platts IODEX 62% Fe CFR China
less freight costs) Free on Board (FOB) Lolabe Cameroon.
In the event that a portion of the production needs to be sold
to a third party in order to attract an equity investor into the
Project, the Noble off-take agreement includes a claw-back
clause that enables project equity participants to buy up to
50% of the production. There are no penalty costs for this
claw-back.
The term of the off-take agreement is for the first 10 years
of production and although the Company aims to produce
35 million tonnes per annum, there is no liability if that level
of production is not achieved. The basis for how ships are
nominated, received into port, loaded and dispatched is in
accordance with industry practice.
Sundance expects this contract to help facilitate completion of
debt funding for the construction of the port, rail and mines.
On 25 March 2014, the Company signed a binding long-term off-take agreement with
leading global commodities trader Noble Resources International (Noble).
Noble site visit, Cameroon
OVERVIEWOF OPERATIONS