SDL - Sundance Resources

One thing this cyclone in the Pilbara bought to mind was the strategic importance of an African ally for China.
Not just for ore supply to the economy in general, if something goes wrong with the Pilbara, but if there was a war, the Chinese may not be able to make lot's of metal things with all the developed world freezing them out of the supply side.

Completely out-manouvered at every turn by hangonlongtime.
Now even the directors aren't gonna make money so they might at last think about, and make the effort (yep that means actual work instead of just nice cheap options) to source finance for the project. I'm sure that's what Ken Talbot was aiming at but these guys just thought they'd take the "no effort, easy money" approach. I for one am very glad to see that it didn't work for them.
Have the testes to roll up your sleeves and do some hard work guys... Or lose all your easy money
By 2016 we could be smiling... Or by the end of 2013 we could all be sueing SDL directors. Is that a class act or a class action. I can never remember.

CarbonSteel said:

Completely out-manouvered at every turn by hangonlong.

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Sundance had no other option, you can't raise 5 Billion to develop the thing without a partner when your capitalisation at .12 share is just $368,653,318. Which is where it was before the plane was (taken out of the sky) and Hanlong offered the family 45c or what ever it was for a controlling stake.
Sundance have allowed the offer to be lowered to perhaps induce another party but no one came to the table.
I think Muffn Mans post is the best thing I have seen on this saga.
The media and Sundance have been saying that this thing is as big as the Pilbara find!
Hanlon a totally screwed if they don't go ahead because they have spent a fortune buying the shares off the Talbot family but cannot get the funds to make the thing happen.

They seem to have pissed off the Chinese dictators too which puts an extra spanner in the works -

It was revealed yesterday that Liu Han, chairman of Hanlong Group, was detained by police in Beijing, along with his ex-wife.

His current wife and other family members were reportedly "under the control of police" in the Sichuan province, in China's south.

The details were reported by the Shanghai Securities News on its website, but no reasons behind the detention were revealed.

The Jinlu Group, which is one of the Liu family companies, said on Tuesday night that it had lost contact with Mr Liu, who still served as the firm's chairman.

Mr Liu keeps a relatively low profile in China, despite being one of the nation's richest men with a wealth of at least $US780 million ($751m). However, Mr Liu has found trouble before in his personal life after he was the victim of an attempted murder in 1997.

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Well looks like the gig is up with Hanlong. With SDL's share price languishing Hanlongs balance sheet will look so weak that it simply cant raise the required funds to meet the second $5 million tranche, let alone complete the take over.
Best hope for long term shareholders is Hanlong's stake is sold to a Chinese State Owned Enterprise, who then receives funding from the NDRC. I hate myself as I could so see this coming.
Following is a post from August last year, it may yet come to fruition:

I have had enough of Hanlong now, and frankly if they returned to their original 57c offer I would now vote NO! I simply do not want to be involved with a company that has such a dishonorable ethos. Remembering that the opportunistic Hanlong purchased the Talbot stake (some 16 odd %) I believe with borrowed funds that will need to be paid back, so for Hanlong, this takeover being rejected will be just as painful.

Is a plan B in place? Well only the board know that for sure:

If it were me, this is how I would proceed.
This project is simply to important to the government and the people of Cameroon to let it wallow in the squalor of sino-anglo relationships.
What most people have to come to grips with is that this is not a mining project. It is infact an infrastructure project. There are many mines in the area that require the infrastructure to be in place, before one sod of dirt can be turned over.
So the infra structure that needs to be in place is the rail and the port. I'd set up a company with a non discretionary trustee. This company would be equally funded by say five of the major miners in the area, Sundance, Core etc, a float on the London exchange should then provide additional funds to get this project up and running. I'm envisaging a BOOT operation, where as after 25 years the infrastructure is then returned to the Government of Cameroon, where it can either run the whole project, lease it back to the entity on a right of first refusal, or on lease to somebody else. Obviously the original mining companies who stumped up the cash would have very beneficial cartage contracts.
Once this occurs the Cappex for all the mining projects in the are is reduced considerably.
This would allow Mbalam and Nabeeba to effectively be funded on a good off take agreement, maybe a Posco or a Tata may be interested.
The pay back to the infrastructure company would come by charging a fee per tonne, say $10.00 per tonne on a hundred million tonnes P.A. A billion dollar a year cash flow for 25 years?
This would also lead to a more stable Iron ore province. At the moment the first mover advantage is simply too great. By the time you are receiving your first cash flows, other "juniors" will be needing to negotiate rail agreements, the place would become the world headquarters for legal firms specializing in M&A's!
So If I was on the board I'd be showing Hanlong the bird, and putting plan B in action.
I understand the short term pain, but I have held this stock too long, believing that it is a game changer for Cameroon, to see it Bastardized by Hanlong.
Now this is just my point of view, my plan B;
So what are your thoughts?
I'm just tired of all the speculation and rehashed media being "leaked" by whoever, thought I'd try and get a constructive thought process going.
Maybe with Mr Liu in Gaol, Hanlong may be forced to off load their stake to another SOE, who knows, failing that then the board really should work on breaking up SDL and trying to get value for shareholders.
Just my thoughts

Deal finally and officially terminated. What a waste of 2 years that was for everyone involved.

Classic example of a micro/small cap stock that will never actually get anywhere, no matter how good its in ground resources are.

Jewels you probably have more enthusiasm for this project than just about anybody, probably including the board!
Your proposal sounds good, along the right track; but putting a structure like this in place in a country like that - an agreement for a 25 year infrastructure BOOT, there would have to be some major political risk of an asset seizure or similar.

The actual project to put in that amount of rail through the jungle out there is an incredibly large and complex job which would cost a vast amount of money ( yes everyone knows this already), whoever pays for it. It would probably in the long run be cheaper to maintain supply from other sources and just sit on the deposit in the mean time just to ensure no-one else can do anything with it.

I remember AKI being the alternative smaller IO resource on the other side of the continent which had a much more feasible access route to port, and that got snapped up quick smart, no mucking around at all.

This is very disappointing and for the sake of holders I hope you see some renewed interest. It could end up floundering for a while before another Chinese/large commodity company just quietly hoovers it up and packs it away.

Dont discount it could have been a deliberate ploy to drive the SDL share price into the dirt.

Wouldn't suprise me if another 'white knight' offer from the Chinese came in the next 12 months.

Instead of the 40c+ offer, it could now well below 20c or considerably under that. With the suitor saying 'take it or shrivel and die'

SDL are now in a tough spot, no longer the market darling.

The project would now be under their control for a fraction of Hanlong's offer, valuing the resource at basically zero.

If I was orchestrating a purchase of that resource and I was a savvy businessman, that is what I would be doing too.

I do not follow SDL closely so am only theorising.

Two glimmers of hope with this -
If the Chinese want to make a lower bid for SDL in a short space of time they cannot do so as Hanlong it will have to be another Chinese company.
One could hope that with the Princeling wars going on in China at the moment have taken out the Hanlong guys and some other China Princeling wants to take Hanlongs assets and hopefully SDL with it.
Remembering also the Chinese will not allow it's own companies to bid against each other for international assets so Hanlong has to be out of the picture first.

The unlikely side of this is that the main cost is going to be in infrastructure, not buying SDL.
If I were a nasty little Chinaman I would offer a joint partnership with SDL to get SDLs share price up. Then I'd use SDL share holders money via a capital raising to fund more of the project along with Chinese money, rather than take a full tilt at SDL. This would mean less investment from the China side but same result - control of the ore. Then just run the thing at a loss to get the cheap ore for China.
This would be less costly for China to get the ore and is the kind of crap they normally pull on share holders when they get into international companies like what they did to that US solar panel company and others like GBG.

If none of this happens and SDL is just left to sit like a stone in a pond, then one should be a little concerned about the viability of many of the upstart Iron Ore and other projects going on in this country. Because it means China is not intending to use as much of the stuff as it has in the past and will just rely on the bigger supply coming from the idiots running RIO who keep telling us how they are about to flood the market with the stuff to the great detriment of their own business and the sector.

notting said:

If none of this happens and SDL is just left to sit like a stone in a pond, then one should be a little concerned about the viability of many of the upstart Iron Ore and other projects going on in this country. Because it means China is not intending to use as much of the stuff as it has in the past and will just rely on the bigger supply coming from the idiots running RIO who keep telling us how they are about to flood the market with the stuff to the great detriment of their own business and the sector.

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No it means that China will look elsewhere. This has always been a very out of the way project requiring huge infrastructure investment. There are plenty of other projects out there (some would argue better ones too), here in Aus included, a lot closer to infrastructure

Who is responsible for the situation in which we find ourselves? Certainly not hanlong. Who captained this farce?

CarbonSteel said:

Who is responsible for the situation in which we find ourselves?

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The owners of the company ie the shareholders?? There have been numerous chances to exit along the way for those that no longer wanted to own a company with so much uncertainty surrounding it

prawn_86 said:

The owners of the company ie the shareholders?? There have been numerous chances to exit along the way for those that no longer wanted to own a company with so much uncertainty surrounding it

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+1

I told a mate to get out a while ago. He knew there was great uncertainty and decided to hold on.

Even from a technical perspective the chart didn't look too flash!

notting said:

Two glimmers of hope with this -
If the Chinese want to make a lower bid for SDL in a short space of time they cannot do so as Hanlong it will have to be another Chinese company.
One could hope that with the Princeling wars going on in China at the moment have taken out the Hanlong guys and some other China Princeling wants to take Hanlongs assets and hopefully SDL with it.
Remembering also the Chinese will not allow it's own companies to bid against each other for international assets so Hanlong has to be out of the picture first.

The unlikely side of this is that the main cost is going to be in infrastructure, not buying SDL.
If I were a nasty little Chinaman I would offer a joint partnership with SDL to get SDLs share price up. Then I'd use SDL share holders money via a capital raising to fund more of the project along with Chinese money, rather than take a full tilt at SDL. This would mean less investment from the China side but same result - control of the ore. Then just run the thing at a loss to get the cheap ore for China.
This would be less costly for China to get the ore and is the kind of crap they normally pull on share holders when they get into international companies like what they did to that US solar panel company and others like GBG.

If none of this happens and SDL is just left to sit like a stone in a pond, then one should be a little concerned about the viability of many of the upstart Iron Ore and other projects going on in this country. Because it means China is not intending to use as much of the stuff as it has in the past and will just rely on the bigger supply coming from the idiots running RIO who keep telling us how they are about to flood the market with the stuff to the great detriment of their own business and the sector.

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Funny, and maybe not far off the mark! Considering the millions of tonnes they sell, where has the share price gone and where are the dividends to share the spoils?!
Someone will come through and attempt to exploit SDL for more money, whether it is a farce or genuine.

prawn_86 said:

The owners of the company ie the shareholders?? There have been numerous chances to exit along the way for those that no longer wanted to own a company with so much uncertainty surrounding it

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+1

Well said. I know I mess around with some risky stuff but even I wouldn't touch this with a barge pole.
Advised my uncle to get out in the 50's. He held until the 30s

The clear signs of the bid failure were obvious a long time ago.

My sincere sympathies to those who lost money believing the dream.

If there is anything to take from it, the best lessons are often hard earned.

There will be a low ball bid from another China source or some kind of joint venture.
As stated they have bought a plot next door to this for 600mil. If you combine that with what they paid for SDL steak it's a sizable investment.
They need the same infrastructure for both.
Another thing they could do is buy it and attempt refloat.
If however the IO story is going to be soft for the next 30 years then there would seem little point in buying SDL.
The Chinese think long term!
I find it hard to believe that IO will remain depressed for all that time and don't believe it is over priced at current levels due to the simple fact that it is not that cheap to mine and it has a real purpose unlike gold.
A walk away is typical befor they come back 6,12 18 months later.
Though they have not come back for Bannerman yet.

SDL have become increasingly tied in with Afferro Minerals AIM:AFF, IMIC AIM:IMIC and West African AIM:WAFM.

IMIC have bid for Afferro and if successful tie in the formers infrastructure and expertise with Afferro's iron ore assets. They would also tie in with the railing arm of POSCO.
WAFM have iron ore both close to SDL's and AFF where a rail set-up would be built.

A future bid looks likely for SDL with better grade iron ore but prices are well down and they may only be worth 18p to 22p a share and maybe not all in cash.

Today's QAR looks a lot like an attempt to talk the SP up. Sadly no meat to put in the sandwich yet.

Announcement out this morning, along with a new presentation.
I think I'll put this in the bottom draw until March next year.
All the best
Jewels

ASX Announcement
7 August 2013
Sundance issues tender documents for Mbalam-Nabeba Project
Sundance Resources Ltd (ASX: SDL) advises that it has commenced issuing tender documents relating to
financing and construction of the infrastructure for its Mbalam-Nabeba Iron Ore Project (“the Project”).
Tender documents for the Project’s port and rail infrastructure are being provided to a number of
International Engineering, Procurement and Construction (“EPC”) contractors that have proven track
records in building successful projects of large scope and scale. Six of these groups are Chinese.
Sundance will also issue term sheets for Project equity and take-or-pay contracts over iron ore produced
at Mbalam-Nabeba. The Company envisages that the negotiations for the take-or-pay contracts and
Project equity agreements will be completed this calendar year.
Sundance Managing Director Giulio Casello said the tender process was a pivotal step in the
development of the Project.
“The interest shown in our Project from a wide range of potential investors, constructors and customers
has been outstanding,” Mr Casello said.
“This reflects both the high quality of the resource and the advanced nature of the Project, which is now
well and truly poised for development.
“We are aiming to ensure that the Project is in production in time to capitalise on the supply shortfall
which we believe is set to emerge in the global iron ore market around 2017-2018.”
Sundance has held discussions with all the parties that will receive the tender documents and the
Company is encouraged by the strong interest that has been expressed by parties in playing a role in
developing this world-class, high-grade iron ore project.
ENDS
Released by:
Giulio Casello
CEO and Managing Director
Sundance Resources Limited
Shareholder/Media Inquiries:
Jill Thomas
Investor Relations Manager
Sundance Resources
Telephone: +61 8 9220 2300
Email: info@sundanceresources.com.au
Paul Armstrong
Read Corporate
Telephone: +61 8 9388 1474
Email: paul@readcorporate.com.au

There has been some high volume and decent gains on this in the past few days of trading. If the aims of making an deal by the end of the year are to come to fruition, I'd expect some announcements to start flowing soon. Anyone experienced in this stock knows it generally leaks a little before an announcement, or is it just speculation, or is there some news article or market conditions that might be driving it that I have missed? Personally I just hope something solid comes through finally. Disclaimer: I hold a small amount.

RP_Automotive;

Sundance set for rebound

BARRY FITZGERALD
The Australian
October 08, 2013 12:00AM

SUCCESSFUL investment in the junior end of the resources market is achieved by having a laser-like focus on the three things that matter most - people, people and people. Know and trust the people involved, and much of the risk in what is a high-risk environment can be mitigated.

It was for that reason that the punters sat up and took notice of what Sundance Resources chairman George Jones had to say about the near-term future of the central African iron ore hopeful at the Resources Rising Stars conference at the Gold Coast last week.

Now, Jones will take no offence for it to be said that he has that well-worn look that comes from having knocked around the mining, banking and finance industries for more than three decades. Successes in coal and iron ore in other companies and a reputation for being a straight-shooter have bestowed statesman status on him in an industry in which there are precious few.

He has had to draw on all that in the past three years to steer Sundance through both tragedy and takeover drama, while continuing to advance the planned $US4.7 billion ($5bn) stage-one development of the Mbalam-Nabeba iron ore project that straddles Cameroon and the Republic of Congo in central Africa.

Heartbreak struck for Sundance in in 2010. Eleven people were killed when a chartered plane crashed on its way to the Mbalam-Nabeba project. All six Sundance board members -- chairman Geoff Wedlock, chief executive Don Lewis, company secretary John Carr-Gregg and non-executive directors Ken Talbot, John Jones and Craig Oliver -- were among those killed, prompting Jones to eventually return as chairman, having stepped down from the position in 2009.

That was followed by the drawn-out takeover approach from China's Hanlong, which started off at 50c in October 2011. It was then increased to 57c a share before being pulled back to 45c. And in April this year it didn't proceed at all after Hanlong's billionaire controlling shareholder, Liu Han, was arrested in China on charges of harbouring his brother, a suspect in a 2009 triple murder. He is now one of China's "missing tycoons", as the Chinese media put it.

Given the plane crash tragedy and the Hanlong dramas, it will be no surprise to know that Sundance is now trading at the princely price of 7.1c a share, giving it a market value of $220 million. But Jones for one does not think Sundance will be around these levels for much longer, telling the 500-odd punters at last week's conference that he thinks we are all going to see a rerating of the company's share price, starting from November.

It is about then that Sundance will be closing off the tenders it has out in China, Korea, Japan, Europe and elsewhere to clear the last remaining roadblock to getting the 35 million-tonnes-a-year Mbalam-Nabeba project into the starting stalls -- securing the required $US4.7bn in funding.

It is a huge hurdle to overcome and the tenders are seeking solutions across both the project's infrastructure needs and the eventual ownership structure of the mine.

There is no doubting that Mbalam-Nabeba is a major A-grade opportunity, given its scale and the expectation that in stage one it will be the lowest-cost hematite iron ore producer in the world ($US21.20 a tonne). At current iron ore prices of more than $US130 a tonne, the project would pay back its capital in less than two years, if all the cashflow were devoted to that cause.

Being at the low end of the cost curve also means it would be able to withstand lower prices. A huge debate continues around the potential for a wall of new production capacity in the Pilbara and Brazil to take prices down sharply. Jones reckons that the chances of a substantial fall in iron ore prices is very remote.

"I think you are going to see continuing robust prices between $US115 and $US135 a tonne," Jones said.

In fact, he sees a supply shortfall emerging in 2016-17 because of the raft of project cancellations that followed last year's price dive to $US80 a tonne.

His expectation of an emerging supply shortfall dovetails with the timing of Mbalam-Nabeba's development. But multi-billion-dollar developments in Third World countries are not exactly flavour of the month.

But Jones remains remarkably bullish. "If we pull this off -- and I can tell you that I have a high level of confidence in us doing that -- I think you are going to see a very serious rerating in the Sundance share price," he said.

More to the point, Jones said that as a result of its tender process, Sundance has had a "number of people very seriously engaging with us".

"There is some serious interest and I think you are going to see it unfold from November onwards," Jones said.

Time will tell just what comes from the process, but at least it won't be a long wait.

- See more at: http://www.theaustralian.com.au/bus...y-fnciil7d-1226734305047#sthash.i860ghbG.dpuf

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I'd say Jones' comments are stirring some interest. I was out of SDL for some time but have decided to take a position again on the back of those comments from Jones. The company's timeline was for mine JV partner deals to be finalised before the end of 2013, and Jones' comments fit in with that well.

Now, I know SDL's very long history of missing timelines and I know of Jones' history of his comments missing the mark as far as SDL goes, but I saw little downside risk from my re-entry point and good upside potential if a mine JV partner can be secured.