Page 108 - Sundance Resources Ltd Annual Report 2013

106 SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2013
NOTES TO THE
FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 30 JUNE 2013
Note 16. MINE DEVELOPMENT ASSETS
2013
$
2012
$
Mbalam-Nabeba Iron Ore Project
Carrying amount at beginning of year 163,955,498 134,981,338
Effect of movement in exchange rates 35,479,151 (11,264,849)
Additions 25,528,678 40,239,009
224,963,327 163,955,498
At 30 June 2013, the Company held a 90% interest in Cam Iron S.A. which holds a 100% interest in the Project in
Cameroon and an 85% interest in Congo Iron S.A. which holds a 100% interest in the Project in Congo. The mining
codes in both Cameroon and Congo entitle the state to an equity interest in the Project.
Sundance has reviewed the recoverable amount of the Project based on the discounted value of future cash flows
assuming development and commercial exploitation. This review highlighted a recoverable value significantly in
excess of the carrying value. As such no impairment was recorded during the period.
The cash flow forecasts were derived from a life of mine model based on the following information and assumptions:
• The Consolidated Entity achieving funding for the development of the Project;
• The definitive feasibility study completed in March 2011 for Stage 1 of the Project and the prefeasibility study
completed in April 2011 for Stage 2. The results of which were announced to the ASX on 6 April 2011;
• Construction and development for Stage 1 to commence in late 2014;
• Production from Stage 1 to commence in late 2017, ramping up to annual production of 35 M
tonnes
per annum;
• The latest JORC code compliant reserves and resource estimates;
• The receipt of all necessary approvals for the development and operation of the Project; and
• Financial commitments outlined in the Convention agreed with the Cameroon government.
The Project economics are most sensitive to achieving project funding, the iron ore pricing assumptions and
discount rates applied to determine the net present value. This will become more relevant on full development
of the project. At this stage, long term iron ore prices have been utilised in the cash flow forecasts.
The ultimate recoupment of costs capitalised for both Mine Development Assets and Exploration and Evaluation
Assets for specific areas of interest is dependent on the successful development and commercial exploitation, or
alternatively, sale of the respective areas. As detailed in note 2, the Company requires additional funding in order
to develop the Project.
Note 17. TRADE AND OTHER PAYABLES
CURRENT
Trade payables 2,131,240 3,053,270
Sundry payables and accrued expenses 5,146,696 2,195,344
7,277,936 5,248,614
Trade payables and sundry creditors are non-interest bearing and generally on 30 day terms.