I can't seem to get the PDF of the Shaw Stockbroking Report (July 2008) that was posted yesterday? Does anyone have it?[/QUOTE]
Hey Piggy Bank,
This may be the Shaw report that you are looking for, enjoy:
Sundance Resouce’s Limited (SDL) share price appears a victim of global equity markets and associated portfolio de-risking. This is in stark contrast to the fundamentals of the iron ore sector where contract prices have risen over 80% year on year to record levels, with prices forecast to remain buoyant well into the future.
SDL has 90% of JORC compliant inferred iron ore resources containing 1.2bt of Itabirite (38%Fe) in addition to 200mt of Direct Shipping Ore (DSO) in Cameroon (60%Fe).
Management is currently planning for production at a rate of 35mtpa of DSO from 2012 with a forecast FOB cost of less than US$25/t (Feb08).
With it’s project potentially at the lower end of the cash cost curve, SDL could be in a strong position to capitalise on these solid fundamentals.
Mbalam, Cameroon (SDL, 90%)
The Mbalam Project is located approximately 490km (by proposed rail) west of the Cameroon coast, in the southern border area. SDL has a 90% stake in the holding company CamIron, while local management and investors own the remaining 10% stake. A provision exists for the Cameroon Government to acquire a 10% interest in CamIron.
Stripping ratio of the Mbarga deposit is estimated to be less than 0.2:1 for DSO. The Itabirite strip ratio is also estimated to be very low at 0.5:1. Itabirite is mined in Brazil, and requires processing through grinding and flotation.
Project Planning
The Mbarga deposit in Cameroon is part of a series of deposits in an ironstone belt, which stretches south through the Republic of Congo, and Gabon.
China National Machinery and Equipment Corporation (CNMEC) are intending to develop the Belinga project in Gabon, situated to the south-west of Mbarga. An agreement with the government is believed to have been signed recently.
The company is presently negotiating a fiscal development ‘framework agreement’ with the government, and anticipates progress on this front in 2008. Significant incentives in the form of tax concessions, land acquisition for the rail corridor, and other assistance could be forthcoming.
The company is aiming to complete resource definition and BFS studies sufficient to achieve project go-ahead by mid-2009.
SDL is planning 7-8 years of DSO operations producing 35mtpa, prior to transition to a 35mtpa high grade haematite concentrate production through processing of itabirite ore. A rail line to transport DSO lump/fines and concentrate product is planned, with a slurry line alternative being investigated. Capex estimates for the DSO operation were estimated at US$3.3b in February 2008, including a US$500m contingency.
Sovereign Risk & Investing in Cameroon
The Federal Republic of Cameroon is located in central West Africa and has a population of about 18m people.
Total international investment in Cameroon is in the 10’s of billions of dollars, with planned projects including a Co-Ni mine, further oil/gas development and expansion of Rio Tinto-Alcan’s refinery. International companies operating in Cameroon include Rio Tinto Limited, AES Corp, Exxon Mobil/Texaco, Petronas and Geovic (TSX).
Key milestones coming up include negotiation of government agreement, increasing JORC compliant resources/reserves, completion of BFS and arrangement of funding. Site visits from prospective offtake/JV partners have recently been undertaken.
Disclosures and Disclaimers
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