Page 126 - Sundance Resources Ltd Annual Report 2013

124 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2013
NOTES TO THE
FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 30 JUNE 2013
Sundance has recorded a current liability for the cash amount to be settled.
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 (i.e. at US$90 per tonne the rate
is US$0.105).
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.
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$1.85m, 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.
Note 32. APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved by the board of directors and authorised for issue on the
29 September 2013.
Note 30. PARENT ENTITY FINANCIAL
INFORMATION (continued)
Contingent Liabilities (continued)