Page 15 - Sundance Resources Ltd Annual Report 2013

SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2013 13
The Mbalam-Nabeba Iron Ore Project will see the
development of mines at both deposits in Cameroon
and Congo, the construction of a 510 kilometre rail
line dedicated to the transport of iron ore through
Cameroon and a 70 kilometre rail spur line connecting
the Nabeba mine in Congo. It also includes the building
of a dedicated mineral terminal at Lolabe in Cameroon
designed for taking bulk iron ore carriers of up to
300,000 tonnes.
In April 2011, Sundance completed the
Definitive Feasibility Study (DFS) for Stage One
and Pre-Feasibility Study (PFS) for Stage Two of
the Mbalam-Nabeba Iron Ore Project.
Stage One will be the production of a Direct Shipping
Ore (DSO)-quality sinter fines product averaging 62.6%
Fe at a rate of 35 million dry tonnes per annum initially
planned for 10 years based on blending material
sources from the deposits in the neighbouring
countries of Cameroon and Congo.
Stage Two, which is currently at a Pre-Feasibility
Stage, would see mining at the continued rate of
35 million tonnes per year of the broader Itabirite
resource. Additional work leading to a Definitive
Feasibility Study for Stage Two at both Mbarga
and Nabeba is planned.
Capital development costs for Stage One of
the operation are estimated to be US$4.7 billion
(at December 2010 prices), with payback of
capital in approximately five years from the start
of production.
The average operating cost is estimated to be
US$21.20 per tonne free on board (FOB) excluding
royalties. The cash operating costs of the
Mbalam-Nabeba Iron Ore Project sit at the lower end
of the industry cost curve partly due to the low strip
ratio (0.9 to 1).
Following the termination of the Scheme of
Arrangement with Hanlong Mining in April 2013,
Sundance has held numerous meetings with a
number of interested parties, including steel mills,
iron ore traders and infrastructure providers, in order to
test a range of commercial solutions and to determine
which would provide the best outcomes in the current
market for the commercialisation of the Project.
Figure 2: Mbalam-Nabeba Project location within the
Central African iron ore province