Page 9 - Sundance Resources 2014 Annual Report

SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2014 7
CHAIRMAN’S ADDRESS
The contractual commitment to Mbalam-Nabeba by all of these
global leaders in their respective fields speaks volumes about the
outstanding technical and economic strengths of our Project.
In particular, I believe their involvement reflects the world-class
nature of the High Grade resource at Mbalam-Nabeba. The quality
of the ore is the key strength of the Project because it will ensure
the costs are among some of the lowest in the iron ore industry.
Amid the pain currently being suffered by many iron ore companies
at the hands of low prices, it is well worth noting that Mbalam-
Nabeba would still enjoy strong operating margins even at these
depressed iron ore price levels.
The roles being played by Mota-Engil and Standard Bank are also
a direct result of the strong support the Project enjoys from the
governments of Cameroon and the Republic of Congo. These
relationships are encapsulated in the Cameroon Convention and
the Nabeba Mining Convention, the latter which was signed with
the Congo Government in July this year.
I have no doubt that this series of pivotal agreements places
Mbalam-Nabeba on the cusp of development. I believe our project
is simply too good, both technically and economically, not to
proceed. And I believe the strong commitments being made by
the world-class groups and the respective Governments I have just
spoken of support my view.
Finally, there is one other key reason why I believe our project is
firmly on track. And that is our people.
In the face of some often very difficult circumstances, the people
across our Company have put their shoulders to the wheel,
demonstrating initiative, persistence and skill.
Their efforts have ensured that our vision to develop a world-class
iron ore project has remained on track.
I depart Sundance in the firm belief that both the Company and its
Project are on an extremely strong footing and well-placed to take
full advantage of their immense opportunities.
I am confident that in handing over the Chairmanship to Wal
King, one of the most experienced and skilled engineering and
construction executives in Australia, the Company will have
someone uniquely qualified to lead the Company as his knowledge
and contacts in his field will be invaluable to Sundance as it moves
into the construction phase.
I would like to thank my fellow directors, who answered my call for
assistance in Sundance’s hour of need, the management and staff
who have stood firm in their resolve to bring our project to fruition,
and our shareholders for their strong support in the face of adversity.
I wish all of you the very best and look forward to watching you
realise this Company’s goal of becoming a major iron ore producer.
Yours faithfully,
George Jones
Dear Shareholders
It is with mixed emotions that I write to you for the final time as
Chairman of your Company.
Much has been accomplished since the current Board was formed
in 2010, and yet much remains to be done in order for us to
achieve our goal of bringing the Mbalam-Nabeba Iron Ore
Project into production.
I believe the Board and Management has been successful in
steering Sundance through some challenging circumstances,
ensuring that we are now firmly on course to secure
development funding.
However, our achievements must be viewed against the
overwhelming sadness of the tragic plane crash which took the
lives of our predecessors.
As many of you will recall, I resumed the Chairmanship of Sundance
immediately after the plane crash in June 2010 with the intention
of remaining in the position for only as long as it took to ensure the
Company and the Project were once again on a strong footing.
However, as you will also be aware, a series of events, including
the drawn out takeover offer from Hanlong, created an environment
which I believe demanded stability and continuity at Board and
Management levels.
It was also crucial that these events were not allowed to distract the
Company’s attention from the key task of advancing the Project.
I have no doubt that we succeeded in achieving that over-riding
objective, as evidenced by the fact that we are now in the
process of finalising key elements of the construction and
funding arrangements.
Mbalam-Nabeba has advanced to the stage where it is now a
construction project. As our recent landmark deal with construction
giant Mota-Engil Africa demonstrates, the focus has switched to
the advanced engineering and detailed costing phase. The results
of this work will in turn provide the foundations on which the funding
mechanisms will be put in place.
Mota-Engil has been engaged to build the US$3.5 billion port and rail
infrastructure which will connect our project to its global customers.
Their willingness to enter into a contract to undertake this work is an
immense vote of confidence in the strength of our project.
Our belief in the strong outlook for Mbalam-Nabeba is also shared
by Standard Bank, which has accepted our invitation to be financial
adviser and mandated lead debt arranger for the Project.
We are equally delighted to also have the ongoing backing of
investors Senrigan, D.E. Shaw and Blackstone, as well as the more
recent support of global investor Mr Bogolyubov who has identified
Sundance and our project as having such a strong future.
Of course, no project would be funded or built if it were not to have
customers, and during the year we were delighted to secure a
offtake agreement with global commodities trader Noble Resources
International covering all the iron ore which will be produced at
Mbalam-Nabeba in its first 10 years.