British mining company International Mining and Infrastructure Corporation (IMIC), who acquired the assets of Affero Mining in Caminex, the Cameroonian law firm developing the Nkout Iron project, in the Southern part of Cameroon; just announced the successful realization of a convertible bonds offering worth 22 million FCFA (13 billion FCFA). With a four-year maturity, this operation has an interest rate of 15%.

In 2019 when it ends, all those that subscribed to this bond will be given the opportunity to get a full or partial repayment, or taking shares in Caminex, at 10 000 FCFA the share. In this scenario, IMIC is to agree to an indirect transfer of assets valued to about 49.5% of Caminex’s capital.

This fundraising should draw the attention of Cameroon’s tax authority, which recently had to jostle with IMIC for the payment of a sum exceeding one billion FCFA which represents the tax corresponding to Affero’s takeover by IMIC in Caminex (100%), in 2013. The TAN issued on August 7, 2015, was contested by the mining company, which argued that there was no provision backing this tax at the time of the transaction in 2013.

Cameroon’s tax authority who however strongly affirms that the inclusion of this provision in the 2015 finance act was no more than a “clarification” of a provision that already existed at the time of the transaction between IMIC and Affero Mining in 2013, then ordered the mining firm’s accounts seized. IMIC then paid the tax required by the Directorate General of Taxes, hence over obtaining the cancellation of seizure order.

Nkout’s iron ore deposit is one of the most important in Cameroon ahead of Mbalam’s (Eastern part of the country), which is divided between Congo and Cameroon. In December 2014, IMIC re-estimated Nkout’s deposit potential to 2.7 billion tonnes of iron ore with a 68% increase in Directly Exportable Ore.

BRM