Page 78 - Sundance Resources 2014 Annual Report

76 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2014
NOTE 7. NON-FINANCIAL ASSETS AND LIABILITIES (continued)
Note 7(d) Mine Development Assets (continued)
Sundance has reviewed the recoverable amount of the Project based on the fair value less cost of disposal method, which
incorporates the discounted value of future cash flows assuming development and commercial exploitation. This review
highlighted a recoverable value in excess of the carrying value. As such no impairment was recorded during the period.
The cash flow forecasts were derived from a life of mine model based on the following information and assumptions:
➢• The Group achieving funding for the development of the Project;
➢• The definitive feasibility study completed in March 2011 for Stage 1 of the Project and the prefeasibility study completed
in April 2011 for Stage 2. The results of which were announced to the ASX on 6 April 2011;
• Key terms of the Port and Rail EPC contract;
• Construction and development for Stage 1 to commence in the first half of 2016 calendar year;
• Production from Stage 1 to commence in the second half of the 2019 calendar year, ramping up to annual production
of 35 million tonnes per annum;
• The JORC code compliant reserves and resource estimates;
• The receipt of all necessary approvals for the development and operation of the Project; and
• Financial commitments outlined in the Convention agreed with the Cameroon and Congolese Governments.
The Project economics are most sensitive to achieving project funding, the iron ore pricing assumptions and discount rates
applied to determine the net present value. At this stage, long term iron ore prices have been utilised in the cash flow forecasts.
The ultimate recoupment of costs capitalised for both Mine Development Assets and Exploration and Evaluation Assets for
specific areas of interest is dependent on the successful development and commercial exploitation, or alternatively, sale of
the respective areas. The Group requires additional funding in order to develop the Project.
Note 7(e) Employee Benefits Provisions
2014
$
2013
$
CURRENT
Employee benefits provision 339,019 564,777
339,019 564,777
NON CURRENT
Employee benefits provision 260,432 174,424
260,432 174,424
599,451 739,201
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014