Sundance Resources has appointed a Chinese engineering firm to cost and plan a bulk materials port in Cameroon to export iron-ore, prompting its shares to rise to a two-year high.
Sundance is also seeking a project partner to provide equity and sign a 10-year offtake agreement for its mines.
The Western Australia-headquartered explorer said it entered into a memorandum of understanding with China Harbour Engineering Company Ltd (CHEC) to establish the scope, cost and delivery program for the 35 megatonne per annum Lolabe Port.
The agreement follows last month’s deal with CRCC China-Africa Ltd to scope and cost the Mbalam project’s 490km railway line.
Sundance said the deal is another ‘‘big step forward’’ for its Mbalam project in Cameroon and the Congo, which faces unique challenges to do with infrastructure and remoteness.
‘‘I think it is giving the market confidence that there is a delivery solution for this project,’’ Sundance chairman George Jones said. ‘‘These agreements will fix the delivery requirements for our logistics infrastructure from mine to ship.’’
Shares in Sundance gained 1.5 cents, or 6 per cent, to close at 26.5 cents, the highest since September 2008.
‘‘The biggest and best railway builders and port builders in the world are the Chinese,’’ Mr Jones said. ‘‘They are very keen and will be able to deliver a bankable solution.’’
Mr Jones said the company was talking to potential investment partners.
‘‘We’re talking to a wide range of potential participants, not all from China,’’ Mr Jones said. ‘‘I know a lot of steel mills and we are talking to them all.’’
Mr Jones said the company was ‘‘forging ahead’’ with plans to finalise all foundational agreements this year, so it could begin the two and a half year construction timetable mid 2011.
‘‘There is a lot happening, the company has indicated it would like to complete all of these types of negotiations by the end of this year,’’ Mr Jones said.‘‘We’re hoping to start construction mid next year.’’
Mr Jones said the company continued to move forward following the death of six of its board members in a plane crash in West Africa in June.
‘‘It is ten weeks ago now, the scar tissue is healing over,’’ Mr Jones said. ‘‘We have been looking for a new chief executive and hopefully we will end that process shortly.
‘‘These people were all friends of mine and the last 10 weeks have been very tough for me.’’
‘‘I assure you we are forging ahead.’’Sundance had not agreed to enter into a delivery contract for the port project with CHEC.
AAP