Page 114 - Sundance Resources Ltd Annual Report 2013

112 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2013
NOTES TO THE
FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 30 JUNE 2013
Note 23. CONTINGENT ASSETS AND LIABILITIES (continued)
Hold Co v Cam Iron SA (continued)
As part of the settlement Sundance is required to pay ongoing production based compensation to Hold Co
pursuant to a compensation deed. The obligation to pay this compensation is based on iron ore sold by Congo
Iron SA and is 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 (ie 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 for achieving
Financial Close is not known and is therefore not considered probable. As a result no amount has been recognised
as a liability in the financial statements.
Absolute Analogue & David Porter v Sundance
The Company has an ongoing dispute with Absolute Analogue Pty Ltd and David Porter. In 2008 Absolute
Analogue presented invoices claiming a total of $129,977. An offer of settlement was made in respect of these
invoices for a total of $81,545, plus interest. This offer of settlement was not accepted. The accounts allow for cost
and expenses incurred and anticipated in respect of this claim. In the opinion of the Board, no other liability should
be accounted for in respect of this claim. This action also includes a claim against the Company 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. This matter is expected to proceed to trial in November 2013.
In addition to the Absolute Analogue and David Porter proceedings, Mr Porter alone has issued a further claim
(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. These
proceedings issued on 29 April 2013. Mr Porter claims to be entitled to additional options pursuant to an alleged
agreement contingent on the achievement of stipulated entitlements as to iron ore deposits in the Republic of
Congo. Sundance is defending this action. The parties are undertaking interlocutory processes including
discovery. The Board will not be in a position to provide any further guidance until completion of these
interlocutory processes.
Fiscal Compliance
The Consolidated Entity, including its subsidiaries in Cameroon and Congo are engaged in ongoing discussions
with the financial administrations on customs, indirect taxes and other fiscal administrative matters. The ongoing
discussions may or may not lead to further costs being incurred by the Consolidated Entity.
Mbalam Convention, Cameroon
On 29 November 2012, Cam Iron SA agreed the terms of the Convention with the Republic of Cameroon.
The Convention underpins the agreement between Cam Iron SA and the government outlining the fiscal and
legal terms and conditions and commitments to be satisfied for the development and operation of the Project in
Cameroon. Since 30 June 2013 Sundance has agreed to payments in relation to satisfying certain requirements
of the Convention. These will occur prior to the end of 2013. There are further payments to the Cameroon
Government in relation to project development which are contingent on Sundance achieving project funding.