PERTH-based miner Sundance Resources has raised $40 million from Noble Resources and an investor consortium to proceed with its Mbalam-Nabeba iron ore project in Cameroon and the Democratic Republic of the Congo.
As part of the deal, Noble will invest $20 million though unsecured convertible notes, at a 10 per cent interest rate, which can be converted into a 30 per cent stake for a future marketing firm for the project.
Noble will also receive 200 million options, excisable at 12 cents a share if the marketing firm does not proceed.
The investor consortium – comprising Blackstone, the DE Shaw Group and Senrigan – would invest the other $20 million through a convertible note issue, which could later be used to purchase Sundance shares at 10 cents a share.
Sundance chief executive and managing director Giulio Casello said the funding ensured stage one development of the Mbalam-Nabeba iron ore project would proceed as planned.
“These funding arrangements will not only secure Sundance’s financial position but also demonstrate the ongoing support our company and the project continues to receive from strategic parties and global institutional investors,” he said.
“Noble is a leading global trader of resource commodities and Blackstone and the DE Shaw Group are well-known, sophisticated investors in the resources sector.
“They are funding Sundance because they believe in the upside potential that our company offers as we push forward in developing this world-class iron ore project.” Sitting on the border of Cameroon and DR Congo, the $4.7 billion Mbalam-Nabeba project could be one of the lowest-cost iron ore producer’s in the world with cash costs of US$21.20 per tonne.
The project could produce up to 35 million tonnes per annum of iron ore and is estimated to have a mine life of 10 years; which could be extended by another 15 years with the production of high grade itabirite hematite concentrate.
Construction would involve a new 510km rail, a 70km rail spur line and a deep water iron ore export terminal capable of taking bulk iron ore carriers.