7 April 2023
AustSino – Offtake Agreement MOU & Shareholder Update
AustSino Resources Group Ltd (ANS or the Company) is pleased to provide this update to
shareholders.
Port and Rail Project – What has been achieved so far ?
In June 2021, the Company entered into a Memorandum of Understanding (MOU) with the
Government of the Republic of Cameroon and Bestway Finance Limited (Bestway). The
MOU contemplates the parties undertaking project development studies and other work with
the aim of negotiating and executing binding agreements for the construction and operation
of a railway linking Mbalam and Port Kribi, together with multimodal mineral harbour
infrastructure that has a capacity of efficiently transporting, handling, and processing
approximately 100mt of iron ore per annum.
These binding agreements with the Republic of Cameroon and Bestway were executed in
March 2022 to finance, design, construct and operate a railway linking Mbalam and Port
Kribi, with the capacity of efficiently transporting, handling, and processing increased to
approximately 125mt of iron ore per annum.
Since then, and notwithstanding all of the negative issues created by COVID, the project has
advanced significantly through a host of MOU’s (non-binding at this point) with various
members of the Consortium that has been put together to complete this project. These
include the following:-
• China Railway 20 Bureau Group Corporation (CR20G)
• China Machinery Engineering Corporation (CMEC)
• China Civil Engineering Construction Corporation (CCECC)
• CCC Mining Group Limited (CCCM)
• China National Chemical Engineering Heavy-Mechanized Corporation Ltd.
(CNCEHMC)
The signing of these various MOU’s is important to the overall project as these companies
combined will create an extremely large and strong consortium that will have the skills
necessary to not only fund and build the entire Port and Rail Project from start to finish, but
to also then operate the Port and Rail infrastructure going forward. This also includes the
build and provision of the railway locomotives and iron ore carriages.
The project partners, along with a large Chinese project Design Company, also advised that
they have completed the Feasibility Study in relation to the Port and Rail Project featuring a
dual-track design with potential to transport in excess of the 125m tonnes of iron ore per
annum originally considered.
Recent Binding Offtake MOU reached with Tsingshan International
The Company has now been advised that CCC Mining Group Limited has executed a
binding MOU with Tsingshan Holding Group Shanghai International Trading Co., Ltd
(Tsingshan International). Tsingshan International is a subsidiary of Tsingshan Holding
Group which is a world leading steel manufacturing business conglomerate based in
Shanghai, China.
This is the first agreement in relation to the provision of iron ore from the overall project.
Whilst the detailed terms of the agreement are still to be finalised, the binding MOU agrees
that over the first 10 years of the project, Tsingshan International will purchase 10m tonnes
of iron ore per annum with potential for this to increase up to 50% of the output of the
project.
Next Steps
Negotiations have already commenced, but have not yet finalised, in relation to another
“offtake” agreement with a large Chinese state-owned Company in relation to the provision
of iron ore to that entity. Although not yet finalised, it is expected that this offtake agreement
will be for the purchase of approx. 50% of all of the iron ore produced by the Project.
After this agreement has been completed and executed, negotiations will then continue in
relation to:
✓ Converting existing non-binding MOU’s into binding contracts to build and operate
the Port and Rail Infrastructure
✓ Signing other binding contracts as required for the project
✓ Completing the equity participation that is considered in some of the already
executed non-binding MOU’s
✓ Completing the debt finance component of the overall funding
✓ Discussing & completing all remaining requirements of the Republics of Cameroon
and Congo such that commencement of the construction phase of the Project can
begin as soon as possible
Sundance Pre-Action Discovery
We re-iterate our comments from back in October 2021. The Company categorically denies
any involvement or wrongdoing associated with Sundance losing any rights it says it had to
pursue its iron ore project and infrastructure project in Congo and Cameroon.
Regrettably, dealing with Sundance’s claims have been long and laborious, but we hope we
are nearing the end of the process. To date, ANS has regrettably had to expend over
$1 million and a very considerable amount of management time dealing with the
proceedings. Despite that, ANS has not been served with any formal writ from Sundance.
The Company continues to consider the public statements that have been made by
Sundance in relation to ANS to be an opportunistic attempt by Sundance to distract its
shareholder and investor base from the fact that Sundance failed to properly manage the
project and key stakeholders.
The Company is taking steps to recover its costs from Sundance dealing with this action.
It is also reserving its rights and is vigorously considering its options to recover for any loss
which the Company has suffered as a result of Sundance’ actions.
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Lastly, the board of AustSino would like to sincerely thank all of its Shareholders. The path to
get where we are now has not been easy, but the board believes that good progress is being
made. This is a very big project with MANY moving parts, and it is a credit, particularly to our
Chairman, Mr Ding, that the project has progressed as far as it has to date.
The Board would also like to sincerely thank Midwest Finance Limited (Midwest) and its
Investors for the continued financial support of ANS. We could not have made the progress
that we have made without the support provided by Midwest and it is greatly appreciated !!
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