5 June, 2012
SUNDANCE AND HANLONG AGREE KEY TERMS OF MBALAM CONVENTION Agreement follows meetings between senior representatives of Cameroon Government, Sundance and Hanlong Next key step in Scheme Implementation Agreement now satisfied
Sundance Resources Limited (ASX: SDL) ('Sundance' or 'the
Company') is pleased to advise that it has agreed the key
terms of the Mbalam Iron Ore Project Convention with Hanlong
Mining and representatives of the Government of Cameroon.
The agreement follows meetings between senior representatives
of the Government of the Republic of Cameroon, Sundance and
Hanlong Mining. These discussions resulted in agreement being
reached on the outstanding key terms in relation to the
Convention.
The key points which were finalized are: Government
Equity:
As stated in our ASX announcement of April 27, 2012, the
Cameroon Government has a free-carried 10 per cent interest
under the Mining Code. Additionally, the Government is to
have a further 5 per cent interest by way of loan
participation; and
A 25-year concession as to port and rail infrastructure was
confirmed with Sundance having a first right of refusal to
operate the facility with tariff protection beyond that
time
Fiscal Terms:
In addition to the previously announced minimum five-year tax
free holiday, maximum 25% tax rate and 5% dividends tax, a
flexible corporate structuring regime was confirmed so as to
allow timely financing and project development.
The Secretary General of the Prime Minister's Office of the
Government of Cameroon, Mr Louis Paul Motaze, who is also
Chairman of the Mbalam Project Steering Committee,
congratulated Sundance and Hanlong on the historic agreement.
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"This is a pivotal event in the development of the Mbalam
Project and takes us closer than ever to realising the
immense economic and social benefits which Mbalam will bring
to the people of Cameroon," Mr Motaze said.
On May 25 2012, the Prime Minister and Head of Government of
the Republic of Cameroon, His Excellency M Philemon Yang,
wrote to His Excellency Mr Wen Jiabao, Premier and Head of
Government of the People's Republic of China.
In the letter, Mr Yang affirmed the wish of the Government of
Cameroon to involve China in the execution of the Mbalam Iron
Ore Mining Project and Cameroon's desire to see Sichuan
Hanlong Group Company committed to the Project. Mr Yang also
noted the common accords reached on the key terms of the
Mbalam Mining Project Convention and requested that China pay
special attention to, and give its support to, successful
completion of the Project.
The agreement now reached satisfies the next significant
condition precedent required under the Scheme Implementation
Agreement (SIA).
The next key requirements of the SIA are:
1. Hanlong to secure provisional approval for the transaction
from China's
National Development and Reform Commission and FIRB approval
by June 30, 2012, and;
2. Hanlong to secure the Credit Approved Term Sheet from the
China
Development Bank by August 31, 2012.
Sundance Chairman George Jones said the agreement on the key
terms of the Convention marked a crucial point along the path
to completion of the SIA with Hanlong.
"Thanks to the commitment of all parties, we have finalised
these terms on a basis acceptable to all parties," Mr Jones
said. "This is a significant milestone in respect to the SIA
and it is a historic achievement in respect to development of
the Mbalam Iron Ore Project.
"We now look forward to finalising the remaining elements of
the SIA and paving the way for the people of the republics of
Cameroon and Congo to reap the benefits of this world -class
project."
Released by:
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Shareholder / Media enquiries:
Jill Thomas, SDL Investor Relations Manager
Telephone: +61 8 9220 2300
Mobile: +61 (0) 487 440 016
Email: info@sundanceresources.com.au
Paul Armstrong, Read Corporate
Telephone: +61 8 9388 1474
Mobile: +61 (0) 421 619 084
Email: paul@readcorporate.com.au
About Hanlong
Sichuan Hanlong (Group) Co, Ltd was established in 1997 by
its Chairman Mr Liu
Han. It is one of China's largest private enterprises with
total assets exceeding 20 billion RMB (A$3 billion) and
annual sales revenue of over 16 billion RMB (A$2.48
billion). The Group has a wide portfolio of investments
including mining resources,
energy generation, infrastructure development,
pharmaceutical, food and beverages, real estate and tourism.
The Group has over 30 wholly-owned subsidiaries and more than
12,000 employees world-wide. Hanlong is a subsidiary of
Hanlong Resources Limited and both are within the Hanlong
Mining Group. Hanlong has an office in Sydney.
Sundance Resources Ltd (Sundance) is an international iron
ore exploration and development company which is building a
global iron ore business in central West Africa. Sundance is
listed on the Australian Securities Exchange (ASX) as is in
the benchmark S&P ASX 200. Sundance's goal is to become
a major global iron ore producer through the development of
the Mbalam Iron Ore Project (Project). It is an integrated
Mine, Port and Rail Project with targeted annual production
capacity of
35Mtpa of Direct Shipping Ore for the first 10 years,
followed by continuing production at 35Mtpa of Itabirite
Hematite for a further minimum 15 years.
The Project is located in an area that straddles the border
of the Republic of Cameroon and the Republic of Congo in
central Africa. The Project comprises Exploration Permit 92
(EP92) located in the East Province of the Republic of
Cameroon, and Research Permits Nabeba-Bamegod (Nabeba) and
Ibanga, located
in the Sangha Province of the Republic of Congo. EP92 is
owned by Cam Iron SA, a company incorporated in Cameroon
which is a 90%-owned subsidiary of Sundance.
Nabeba and Ibanga permits are owned by Congo Iron SA, a
company incorporated in
the Republic of Congo and is an 85%-owned subsidiary of
Sundance.
Sundance is being advised by UBS AG, Clayton Utz and CITIC
Securities.
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