(Business in Cameroon) - Sundance Resources, active on the cross-border Mbalam-Nabeba iron ore project between Cameroon and Congo, announced today September 25 it has reached a binding agreement with Australian AustSino Resources to sell a majority stake in its share capital for $58.250 million.

Under the agreed terms, the money will be used to cancel the company's existing convertible notes by offering bondholders a package consisting of cash, shares and options. Sundance will maintain $8.250 million in cash for working capital requirements and advance the Mbalam-Nabeba project.

The transaction is expected to close in 4 months. It is however subject to a number of conditions and regulatory approvals, including those of shareholders.

According to Giulio Casello (photo), Sundance's CEO, the agreement is a “win-win scenario” as it will allow the company to advance its Mbalam-Nabeba project, while repaying its debt in a suitable way. “AustSino has made clear its intent to see Mbalam-Nabeba developed and together we will soon be travelling to Cameroon and Congo to demonstrate how they can help develop the project.” he said. 

The Mbalam-Nabeba project involves the development in two phases of the Mbalam deposit in Cameroon and the Nabeba deposit in Congo. Sundance expects this project to produce 40 million tons of direct-loading ore annually in the first phase over 12 years. The second phase will extend the life of the operation by more than 15 years by producing a high-grade hematite itabirite concentrate.

Let’s note that in addition to the Sundance deal, AustSino is announced in another agreement whereby Western Australian Port Rail Construction (WAPRC) will acquire a majority share in the company for $100 million.

Louis-Nino Kansoun