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International Mining & Infra Corp PLC: THE INVESTMENT CASE

IMIC's commanding iron ore position in Cameroon

IMIC holds major iron ore acreage in Cameroon and is well-connected across the region
IMIC's commanding iron ore position in Cameroon
Cameroon is rich in iron ore deposits

International Mining & Infrastructure Corporation raised US$22mln via a bond back in November 2015, following the delisting of its shares from Aim in October.

The money raised will be used to support the company in its efforts to advance its plans to develop iron ore and associated infrastructure in West Africa.

The primary focus is in Cameroon, which in the days of the iron ore boom, between about 2005 and 2008, was a hotbed of activity for junior and not-so-junior miners, including many from Australia, China, and elsewhere.

In Cameroon IMIC operates via its 100%-owned subsidiary Caminex, which last year managed to get involved in a tax dispute with the Cameroon government. This has now been resolved, thanks in part, to the intervention of the British High Commission, and the resolution has allowed the company to re-engage on the ground.

The company has four major iron ore projects in Cameroon, including the more advanced Nkout and Ntem projects, as well as the less advanced Essong and Akonolinga projects.

All lie along the route of a proposed rail corridor that will run from the town of Nabela in the north of the Republic of Congo, through into Cameroon and down to the coast some way to the south of the city of Kribi.

In iron ore, infrastructure is always key to the economics, since it is a bulk commodity and transport costs can quickly mount up. So it’s with that in mind that the proposed railway traces a course past as many of southern Cameroon’s significant iron ore projects as possible.

In the development of these rail links IMIC is closely involved with another group, called AIOG, which is well-connected throughout the region, and which intends to take the lead in terms of getting the railway financed.

The thinking at this stage is that the infrastructure will be largely debt-financed, and discussions are ongoing with several Chinese groups including China Railway Eryuan Engineering Group, China Railway Group, and Hebei Iron and Steel Company.

Precisely what China’s current appetite for West African iron ore projects now is, is perhaps open to question following the end of the boom, although it’s worth noting that the iron ore price has recently bounced back from its muti-year lows and traded above US$50 at the beginning of March.

The Chinese economy continues to grow, and it continues to consume steel in significant quantities. And West Africa has proved a fertile hunting ground for the Chinese in the past, since they don’t tend to run up against entrenched Western interests in the degree that they might do elsewhere.

Even so, allowing that the iron ore price has more than halved over the past few years, IMIC’s plans to develop its Ntem project first make a lot of sense.

This is a smaller project, but crucially it is nearer the coast. At the last count the project was known to contain 96.9 million tonnes at 34.9% iron in the indicated category and a further 79.4 million tonnes at 35% iron in the inferred category.

Next cab off the rank will be the much larger Nkout project, which is some way inland, but which crucially is located further along the proposed rail route which will link Sundance’s (ASX:SDL) Mbarga and Nabeba projects to the coast.

By the time the company has got those two projects up and running it will be able to turn its attention to its other two projects, and to any others which have come onto its radar by then.

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International Mining & Infra Corp PLC Timeline

November 09 2015
October 08 2015
April 21 2015
April 17 2015

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