Page 35 - Sundance Resources 2014 Annual Report

SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2014 33
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2014
5. Review of Operations
Operations
Sundance Resources Limited (‘Sundance’) holds a majority interest in subsidiaries Cam Iron SA (‘Cam Iron’) and Congo Iron
SA (‘Congo Iron’) whose principal asset is the Mbalam-Nabeba Iron Ore Project (‘the Project’), which straddles the border
of Cameroon and Congo in Central Africa. It is comprised of Exploration Permit 92 (‘EP92’) held by Cam Iron located in the
East Province of Cameroon and Mining Permit Nabeba-Bamegod (‘Nabeba’) and Exploration Permit Ibanga (‘Ibanga’) in the
Sangha Province of the Congo held by Congo Iron.
The Project will see:
• ➢ the development of mines at both deposits in Cameroon and Congo;
• ➢ the construction of a 510 kilometre rail line dedicated to the transport of iron ore through Cameroon;
• ➢ construction of a 70 kilometre rail spur line connecting the Nabeba mine in Congo; and
• ➢ the building of a dedicated deep water port terminal at Lolabe in Cameroon, designed to be capable of taking bulk iron
ore carriers of up to 300,000 DWT.
This will support the production of 35Mtpa of high grade hematite for the first 10 to 12 years and then 35Mtpa of a high
quality concentrate for at least a further 15 years.
Following the completion of the Definitive Feasibility Study (‘DFS’) which was released in 2011, Sundance’s focus shifted to
the development of the Project. Sundance has continued to commercialise the Mbalam-Nabeba Iron Ore Project by rapidly
achieving a number of milestones over the last twelve months. Each milestone de-risks the Project and strengthens the
Company’s position as it seeks to secure financing and commence construction.
Additional information as to the progress made in each of these areas is provided below:
Port and Rail Infrastructure EPC
At a signing ceremony in Yaoundé, Cameroon, on 5 June 2014, international engineering and construction company Mota‐
Engil Africa and Sundance signed the binding and bankable Engineering, Procurement and Construction (EPC) contract to
build the port and rail infrastructure for the Project. A second EPC contract for the construction of the spur line portion of the
railway to be built in the Congo was also signed on 18 June 2014.
Mota‐Engil Africa’s role includes detailed design, construction, testing and commissioning of the following:
• ➢ 510km railway from the Mbarga Mine in Cameroon to the Mineral Terminal Facility at Lolabe on the west coast
of Cameroon;
• ➢ 70km rail spur line from the Nabeba Mine in the Congo to the Cameroon railway;
• ➢ 35Mtpa deep water Mineral Terminal Facility, including stock yards, capable of loading ‘China‐max’ vessels; and
• ➢ Procurement of all railway rolling stock and operating equipment and the materials handling equipment at the Mineral
Terminal Facility.
Key terms of the contract for the port and rail EPC contract are:
• ➢ Construction period from Financial Close of 3.5 years;
• ➢ Contract value of US$3.5 billion;
2. Company Secretary
Carol Marinkovich joined Sundance as Assistant Company Secretary on 1 July 2010 and was appointed Company
Secretary on 1 January 2014, following the resignation of Brian Conrick effective 31 December 2013. Mrs Marinkovich
has extensive corporate experience working with listed and unlisted mining companies both within Australia and
internationally and is a member of Governance Institute of Australia and an associate of the Institute of Chartered
Secretaries and Administrators.
3. Principal Activities
The principal activities of the Group during the year were the continued evaluation and de-risking of its Mbalam-Nabeba
Iron Ore Project (‘the Project’) in the Republic of Cameroon (‘Cameroon’) and the Republic of Congo (‘Congo’), and the
evaluation of various development scenarios for the Project.
There were no significant changes in the nature of the principal activities during the financial year.
4. Results
The operating loss after tax of the Group for the financial year was $32,941,511 (2013: $31,641,559).