Page 72 - Sundance Resources 2014 Annual Report

70 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2014
NOTE 6. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
Note 6(c) Borrowings (continued)
Noble Note
It is proposed that a separate iron ore product marketing company (‘MarketCo’) will be established to handle the sale of
product from the Mbalam-Nabeba Iron Ore Project. As part of the conditions of the Noble convertible note, the holder may
convert the note into an interest in Market Co at any time before the maturity date, if MarketCo has been incorporated and
the Company has finalised the marketing arrangements on terms acceptable to Noble, and provided the Noble Note has
not otherwise been redeemed or converted, the noteholder may elect to convert the Noble Note into MarketCo shares with
the number of MarketCo shares to be transferred to be the lesser of:
• 30% of the shares in MarketCo then on issue; and
• the greater of:
• 24.9% of the shares in MarketCo then on issue; and
• that portion of 30% of the shares in MarketCo then on issue which is equivalent to the proportion
of the Company’s
direct or indirect shareholding in MarketCo bears to the Company’s direct or indirect shareholding in MarketCo
plus the shares in MarketCo then on issue which are directly or indirectly held by government agencies in the
Republics of Cameroon and the Congo.
The noteholder may elect to convert the Noble Note into ordinary shares in the Company at a conversion price of $0.12
subject to adjustment, if:
• at the Maturity Date, of 4 November 2015, MarketCo has not been incorporated and/or the Company has not finalised
marketing arrangements on terms acceptable to the noteholder; and
• at any time after a Change of Control Event occurs, and at that time, MarketCo has not been incorporated.
If the Noble Note is not converted prior to the maturity date, 4 November 2015, it must be redeemed by the Company at
the face value of $20 million. Interest on each Noble Note is 10% per annum payable semi-annually.
In addition, 200 million options at an exercise price of $0.12 per option with an expiry date of 18 November 2015 have been
issued to Noble.
For further details on the terms and conditions of these options, refer to the Notice of Annual General Meeting and
Explanatory Memorandum to Shareholders announced on 29 October 2013.
The proceeds from the issue of the Noble note totalled $20 million which was recognised at issue date as a financial liability.
Following approval by shareholders at the Annual General Meeting the options were classified as equity.
Investor Consortium Note
20,000 AUD denominated convertible notes were issued by the Company on 4 November 2013 to the Investor Consortium
at an issue price of $100 per note. The holder may convert notes into underlying shares utilising a conversion price $0.10
subject to adjustment. If the notes have not been converted they will be redeemed on 4 November 2015 at $120 per note
(120% of the face value). No interest will accrue in respect of the Consortium Notes
In addition, 260 million options have been issued to the investor consortium with the following terms:
• 200 million options at an exercise price of $0.10 per option with an expiry date of 4 November 2015;
• 60 million options at an exercise price of $0.12 per option with an expiry date of 4 November 2015.
For further details on the terms and conditions of these options, refer to the Notice of Annual General Meeting and
Explanatory Memorandum to Shareholders announced on 29 October 2013.
The proceeds from the issue of the Investor Consortium notes totalled $20 million which was recognised at issue date as
follows: financial liability of $18,320,000 and $1,680,000 attributed to equity (being the value attributed to those options
not subject to shareholder approval). Following approval by shareholders at the Annual General Meeting all options were
classified as equity.
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014