Page 88 - Sundance Resources 2014 Annual Report

86 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2014
NOTE 13. CONTINGENT LIABILITIES
The Group is aware of the following contingencies as at 30 June 2014.
Congo Aircraft Incident
On 19 June 2010 all Directors of the Company and other passengers died in the Congo aircraft incident. The enquiry into
the events has not yet concluded and may give rise to further costs, which in turn, may or may not lead to further costs
being incurred by the Group. During the year there have been three legal actions underway in relation to this incident:
➢• The claim against Cam Iron lodged in 2012 on behalf of the families of persons lost in the Congo air incident of 2010
has been withdrawn by the plaintiffs.
• In July 2013 legal action in the UK High Court on behalf of the Cassley family was served on the Company. Mr James
Cassley was an employee of the investment company GMP Securities Europe LL. GMP is the First Defendant in the
action and the Company is the Second Defendant. The losses claimed in the process are put at a total of £6,236,844
(Great British pounds). Legal advisors have been appointed and the Company is defending the action. The trial is
scheduled for February 2015.
• In June 2013 the Company was informed of court process filed in the US state of Illinois on behalf of the estates
and survivors of John Jones, Don Lewis, Geoff Wedlock, John Carr-Gregg, Natasha Flason and James Cassley. These
proceedings have not been served on the Company.
Hold Co Production Based Compensation
Sundance is required to pay ongoing production based compensation to Hold Co SARL, Cam Iron’s minority shareholder,
pursuant to a compensation deed. The obligation to pay this compensation is based on iron ore to be sold by Congo Iron
and will be calculated at the rate of US$0.10 per tonne for iron ore sold at the price of US$80 per tonne and is subject to a
rise and fall of US$0.005 per tonne for every US$10 movement in the price (i.e. at US$90 per tonne the rate is US$0.105).
Use of the Quantm System on the Mbalam Rail Corridor
In July 2007, Sundance entered into an agreement with Quantm Pty Ltd (‘Quantm’) for the application of the Quantm
System on the Mbalam Rail Corridor. This agreement provided for a success fee of US$1,850,000 which is only payable
upon the completion of Financial Close as interpreted under the agreement. The timetable and certainty to achieve Financial
Close is not known. As a result no amount has been recognised as a liability in the financial statements.
Absolute Analogue & David Porter v Sundance (2007)
Absolute Analogue Pty Ltd and David Porter issued a claim against the Company (WA Supreme Court Action No. CIV 1773 of
2007) for the issue of 30 million options (20 million options with an exercise price of $0.10 and 10 million options with an exercise
price of $0.20), or damages in lieu assessed at A$9 million. This matter proceeded to trial in November 2013 and on 6 August
2014 the Supreme Court of Western Australia delivered its judgment in favour of Sundance dismissing the plaintiffs’ claim and
ordered the plaintiffs to pay Sundance’s costs.
Absolute Analogue and David Porter have lodged an appeal against this decision. The appeal will be considered in due course.
David Porter v Sundance (2013)
On 29 April 2013 Mr Porter has issued a claim against the Company (WA Supreme Court Action No. CIV 1632 of 2013) in
which he is seeking an order for the grant of 10 million Sundance options at $0.10 and damages, or alternatively damages
in lieu of specific performance estimated to approximately $ 4 million. Mr Porter claims to be entitled to options pursuant
to an alleged agreement contingent on the achievement of stipulated entitlements as to iron ore deposits in the Republic of
Congo. The Company is defending this action. The parties are undertaking interlocutory processes including discovery and
no date for trial has been set.
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014