In a collaborative effort, AustSino Resources Group is investing AU$58 million into Sundance Resources to help propel the company’s Mbalam-Nabeba iron ore project forward.
Sundance Resources (ASX:SDL) has entered a AU$58-million agreement with AustSino Resources Group (ASX:ANS) to help the company become debt-free and progress its Mbalam-Nabeba iron ore project in Cameroon and Congo.
Once the agreement is completed, AU$50 million will go towards cancelling Sundance’s existing convertible notes in exchange for a cash, share and option package for current noteholders. The other AU$8 million will be retained by Sundance for working capital and advancing the Mbalam-Nabeba project.
The agreement will consist of two placements; the first being Sundance issuing 62.5 million fully paid ordinary shares to AustSino at a price of AU$0.004 each by October 15. The second will entail AustSino paying Sundance AU$58 million, with Sundance issuing 10.5 billion shares at a price of AU$0.0055 each and granting 10.5 billion unlisted options for AU$0.02 each.
In a statement, Sundance’s CEO Giulio Casello expressed joy towards the deal, and highlighted the collaborative effort the companies will be taking on the Mbalam-Nabeba project going forward.
“This is a transformational deal for Sundance and its shareholders because it delivers in one agreement a partner in AustSino who has the foresight, credibility and business network to enable Sundance to advance development of the Mbalam-Nabeba iron ore project and the repayment of the outstanding convertible notes in a very acceptable manner,” he said.
“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.”
Mbalam-Nabeba is Sundance’s flagship project, situated on the border of Cameroon and the Republic of Congo in Central Africa. Its first stage would be the production of a Direct Shipping Ore-quality sinter fines product meant to average over 62 percent iron at a 40 million tonnes per annum production rate for 12 years. The second stage would extend the project’s life by over 15 years, and is currently at a pre-feasibility stage.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.