SDL - Sundance Resources

[Jewels]

Hello, is there anybody out there??
Things seem to be pretty quiet on the Sundance front. It would appear that the Sundance AGM will be on the 28th of November, level 8, Exchange Plaza, I think for 2pm. Is there anybody who is likely to attend on this blog? I'll be there. I'll be asking a few questions, anything in particular anyone would like to ask? (Lets not be stupid now).
Quite a few went through today at 10 cents, anybody lucky enough to pick up a few? Had my order in but obviously too far down the line to get filled, so have pulled it, and will see how the market opens Monday.
So are we all feeling positive? or is this market spooking everybody? Personally I'm looking at the next few months as an opportunity to bring the average price of my holding down, (hopefully not down to "0" though!)
Stay Happy, have faith that the board can deliver, they have a good track record to date.
Ciao......J

 

[Lucky_Country]

They must have some news up their sleeve by now !
Hopefully by the time AGM comes we will be alot wiser !

 

[Miner]

Hello, is there anybody out there??
Things seem to be pretty quiet on the Sundance front. It would appear that the Sundance AGM will be on the 28th of November, level 8, Exchange Plaza, I think for 2pm. Is there anybody who is likely to attend on this blog? I'll be there. I'll be asking a few questions, anything in particular anyone would like to ask? (Lets not be stupid now).
Quite a few went through today at 10 cents, anybody lucky enough to pick up a few? Had my order in but obviously too far down the line to get filled, so have pulled it, and will see how the market opens Monday.
So are we all feeling positive? or is this market spooking everybody? Personally I'm looking at the next few months as an opportunity to bring the average price of my holding down, (hopefully not down to "0" though!)
Stay Happy, have faith that the board can deliver, they have a good track record to date.
Ciao......J

Dear Jewels

I would try to attend as still holding some of the useless script.

Do not feel any one to be lucky to have bought SDL at 10 cents . As the way market is trending I will not be surprised to see few more luckies to buy SDL at 9 cents on Monday

Bad sign all over red just like Ansett Collapse the world economy has collapsed with backbone broken needing surgery and no phsio

 

[Lucky_Country]

China to invest $445bn in rail systemFont Size: Decrease Increase Print Page: Print From correpondents in Beijing | October 25, 2008
CHINA will invest nearly $A445 billion in its overburdened rail system as a stimulus measure aimed at blunting the impact of the global financial crisis.

The investment is part of plans to extend the country's railway network from the current roughly 125,502km to nearly 160,900km by 2010, Shanghai's Oriental Morning Post reported.

The Beijing News quoted a rail official as saying that, while the network needed extending, the massive investment was also intended to help lift the nation's economy as it suffers amid the global woes.

"New rail investment will become a shining light in efforts to push forward economic growth," railway ministry spokesman Wang Yongping said.

China's economy recorded its slowest growth in five years at 9.0 per cent in the third quarter of 2008.

The situation has looked increasingly dire in recent days with export-dependent factories closing and laying off thousands of workers, with warnings from industry heads of much worse to come.

The China Daily newspaper said the rail investment plan had been approved by the State Council. About 1.2 trillion yuan ($A252 billion) had already been allocated, it said.

The paper quoted a government policy adviser saying the plan was similar to China's successful strategy for warding off the Asian financial crisis of the late 1990s.

"In 1997, we dealt with the Asian financial crisis by stimulating domestic economic growth through investment in the construction of highways," Zheng Xinli said.

"This time the money will go to improving the rail network."

China's railway network is one of the most extensive in the world, but has come under pressure as the nation's economy has boomed, giving millions more the opportunity to travel.

Among them, more than 200 million migrant workers are estimated to have left their homes in the countryside for work in urban or coastal areas.

The vulnerability of the rail network was laid bare last winter when fierce snowstorms crippled

China's transport systems, stranding millions of passengers trying to return to their homes during the peak Chinese New Year travel period.

Iron Ore needed for this little project one would think LOL

 

[Jewels]

Hello fellow SDL shareholders. The notice of the AGM is out along with the companies financial report. Please go to the ASX or Sundance websites for full reports.
Some of the resolutions to be voted on are to increase directors remuneration. Now in the current climate, with the amount of drilling that still has to be done, do you think it would be better to pass an alternative resolution allowing the directors short term options based on increased share prices, allowing them a slightly higher remuneration, should short term SP targets be met?
From memory, and please dont quote me on this, I think that total director payments in 2007 accounted for about 10% of total opperating costs (I'll check that figure out when I get time this evening.) Does that seem a bit high?
Just wondering what you guys are thinking and what is fair and reasonable, considering what other non producing I.O. juniors are paying, and also the current state of financial markets.
Would be very interested if anybody could comment who has experience with other companies in a similar position.
Thanks J.

 

[The Muffin Man]

Jewels, regarding the annual GM, I think there is one question most would like to be answered.

Any information on the progress (or lack thereof) of finding a strategic partner for the Cameroon project would be superb. I can understand the resources are still being defined but there have been a few different groups go through the site, and I'm guessing SDL would have some idea as to who is more than a little interested in coming on board and helping fund the project. Whether any possible strategic partners have indicated a level of resources that need to be defined before the project was to become viable to them would also be interesting to know. I'm not sure we will have much luck with an answer though, and the currect economic climate would not be helping either.

Also, and I think following on from the above, does SDL envisage that the possibility of recession in Europe and the slowing down of the Chinese economy will effect the viability of the Cameroon project? With capital becoming increasingly scarce, coupled with what could turn out to be a lowering level of demand for Iron Ore from China and Europe, may possible strategic partners begin to shy away from such a capital intensive project in the near term? And if so, what plans/strategies/incentives can SDL put into place to ignite the interests of possible partners in the Cameroon project?

 

[Jewels]

Hey Muffin Man,
You took the words out of my mouth. Certainly if it isn't addressed during the presentation, I'm sure there will be at least 25 or 30 shareholders there wanting to know exactly the same thing. I think it will be just a matter of who gets to ask the question first.
Have you had a look at the financial report yet? If so what do you think?
Ciao....J

 

[The Muffin Man]

I have had a look at the Annual Report. I don't think there is anything in there that is ground breaking, or new information.

The goals moving forward are to confirm their Mbalam resources by in-drilling, locate further DSO resources to meet their target of approximately 300m tonnes (on which they are quite confident of doing after drilling more of Mbalam and Metzimevin), and continue discussions with possible strategic partners regarding off-take and financing agreements.

As for the balance sheet, it doesn't look too bad. Close to $50m in cash and cash equivalents, and no interest bearing liabilities is a good place to be at the moment. SDL raised their last lot of capital at a pretty opportune time as it was before the major depreciation experienced in the share market.

They will however need more money soon. If you look through their Statement of Cash Flows, and in particular take the net of their Operating and Investing activities, you come up with a figure of approximately -$38m. So there is about $50m in the bank, and if we were to extrapolate last years cash flow figures through to this year, they will need to do something about their level of cash soon enough. If they issue a further tranche of shares, that means further dilution of shareholder value. If SDL can get some more good news out before they need to start looking for more cash (like more DSO announcements, and strategic partner announcements), they might not have to place the shares for the current market price.

Interesting 6 months coming up.

 

[The Muffin Man]

I just had a look then at the September quarter cash flow on the ASX site, SDL is currently holding $32.6m in cash, meaning a $14.3m decrease in cash for the quarter.

 

[Agent 86]

Muffin Man

At this rate of expenditure, it seems as though they wont be able to drill out the new exploration permits in Congo with any level of completeness, let alone EP92 and EP143 in Cameroon!

Although having said that, they did spend $12.3m last quarter as well which gave some seriously good results.

I will be keen to see the electromagnetic images of the terrain in the new Congo tenements and also EP143 in Cameroon to see how they compare with EP92's electromagnetic images.

I am long, and deeply out of the money on SDL, but am holding faith for the longer term picture.

 

[shccbell]

Well I'm the same, way to much money sunk now to pull out. I actually believe they are in a good position to firstly survive the next 9 to 12 months (should slow expenditure however) and two to find a strategic partner.

Never know what is going to happen but SDL seem to have a world class resource and good management so expect big things in the next 12 months. If we are in store for a deep down turn then SDL's best course is wait for global finance to free up.

Best of luck to share holders but its a pain being 50%+ down

 

[Agent 86]

After reading their quarterly, it is pleasing to see that an Imformation Memorandum has gone out to potential customers and financiers.

Also, how did their presentation go down at the european Iron Ore conference? Did anyone hear?

 

[DowJones]

Well I'm the same, way to much money sunk now to pull out. I actually believe they are in a good position to firstly survive the next 9 to 12 months (should slow expenditure however) and two to find a strategic partner.

Never know what is going to happen but SDL seem to have a world class resource and good management so expect big things in the next 12 months. If we are in store for a deep down turn then SDL's best course is wait for global finance to free up.

Best of luck to share holders but its a pain being 50%+ down

I hear you shccbell. I have (had) 10K in SDL - enough to hurt being 50% down. I still cannot believe how fast the price spralled down due to the GFC and the negative sentiment on the future of iron ore. However other iron ore players who are in production also got smashed quite bad too - AGO, MGX, FMG to name a few...

However this mob does have terrific assets and being in Africa the production costs should be lower - if the project does get off the ground then the SP will move accordingly.

Hold onto the dream fellow SDL shareholders! Time will tell

 

[The Muffin Man]

After reading their quarterly, it is pleasing to see that an Imformation Memorandum has gone out to potential customers and financiers.
Also, how did their presentation go down at the european Iron Ore conference? Did anyone hear?

I also thought that was quite encouraging, at least we can see that there is movement at the station.

Let's get these resources defined and start attacking the next issue of financing the project and the inevitable offtake / strategic agreements.

 

[Jewels]

Howdy fellow Sundance Deciples,
Yet another announcement is out. Looks very good, management are ticking all the boxes. Go to the ASX site for the full announcement. Can't help but feel opptomistic.

 

[The Muffin Man]

The resource update is welcomed, especially considering that there are other targets close by that may contain good amounts of DSO quality as well as 40% Fe quality Iron Ore.

It was interesting to read that the company has now stopped using three of the drills in an attempt to now keep drilling and associated costs down. I think this is a good move, as SDL doesn't have huge amounts of funds in the bank. I think it also shows that the board are confident of negotiating with possible off take partners / strategic partners with the current level of resources indicated. Three drills will still be in use though to define other areas where DSO and Iterbirite may be present.

The wording regarding interested parties seemed quite strong in the announcement, and that is an extremely welcomed development.

I'm quite happy with how things are progressing, the board seems to be moving this project forward well.

 

[Green Machine]

Reading through the business section of the West Australian, some confidence for Gindalbie and Sundance holders hopefully! I have quoted a few paragraphs.

Jones defies market in $162m China Deal

"Gindalbie Metals chairman George Jones has pulled of a market-defying deal, convincing his chinese partner Ansteel to part with $162.1m in cash by subscribing to the WA miner's shares at a 105% premium"."

"Mr Jones said he had worked with Ansteel, in one form or another for 13 years"

"Speaking from Cameroon, where he is visiting the operations of another of his companies, Sundance Resources, Mr Jones said Chinese interest in Australian mining assets remained strong despite global woes".

"They are tired of being chopped up by the big iron ore miners (Vale, Rio, BHP) over price. They are still looking to develop assets, but its quality assets, I think you are going to see the continuation of that and they will get these companies as cheap as they can but they are not trying to tear us apart."

Personally I think we should be confident of the board at Sundance, their experience, knowledge and contacts should hold us in good stead.

 

[Jewels]

A little light reading for fellow Sundance resources shareholders. What do you think? A way of trying to wrangle a better deal out of the Cameroon Gov't by GJ & Co, or a clever way of manipulating Sundance so that Paul Birya and his cronies can get their hands on one of the largest undeveloped iron ore deposits in the world?
The risk with this was always the government of Cameroon.
I love a good conspiricy theory....

YAOUNDE, Nov 10 - Tax wrangles between Sundance Resources <SDL.AX> and the government of Cameroon are delaying the start of work and threatening the viability of a potentially large iron ore project, the Australian firm said late on Sunday.

Sundance owns 90 percent of CamIron, which intends to begin exporting the steel-making raw material from its $2.46 billion Mbalam project in the central African country by 2011.

"CamIron and the Cameroon government are still to reach a fair agreement on the rights, taxes and royalties to be contained in the memorandum of understanding," said CamIron's Chairman George Jones.

Sundance wants a stratgic partner for Mbalam, industry sources said last month, with ArcelorMittal <ISPA.AS> and POSCO <005490.KS> seen as interested parties, but Jones said lack of agreement with Cameroon endangered the project.

"Various rights, taxes and royalties that are applied in Cameroon are extraordinarily high compared to the world prices and should this be fully applied in the Mbalam iron ore exploitation project, the project will not be economically competitive at the international level," said Jones, who is also non-executive chairman of Sundance, on state television.

The interview was recorded after the Australian company boss met Cameroon's Prime Minister Ephraim Inoni on Friday to discuss the project, which is running behind schedule.

CamIron said at the start of 2008 that it expected to sign an MOU with the government in March. [ID:nL21778820]

The concern raised by Sundance highlights the administrative bottlenecks identified by the World Bank, the International Monetary Fund and potential investors as one of the greatest handicaps to doing business in Cameroon.

Mbalam could be one of the world's biggest iron ore mines, with enough resources to provide 35 million tonnes per year for 20 years, according to company figures.

 

[The Muffin Man]

That's the first real piece of information that I have read where SDL has had trouble with the Government of Cameroon. I've read until now of how the project is of national importance etc, and have expected that both parties would work together to bring about the promotion of each others best interests.

I suppose Biya wants to make sure his pockets are filled by the whole process, because that's where most of it will end up I guess, supporting his regime and helping him keep control of his country.

But in saying that, if Cameroon doesn't come to the party and produce internationally competitive taxes, royalties, and other costs, SDL won't be able to find a strategic partner to get the project off the ground at all. If that happens, no-one wins. No taxes, no royalties, no jobs, no infrastructure development. What's the use of having one of the Worlds largest Iron Ore deposits if it isn't being mined? And if SDL are screwed over here by a greedy and corrupt Government asking for too much of the pie and making the project not competitive, what other companies will want to invest under those circumstances if SDL were forced to move out? None. Surely their Government can see this, Biya seems like an educated man from what I've read. He knows that the development of the site is in his best interests.

I'll be watching with interest!

 

[The Muffin Man]

Well it seems all quiet on the Sundance front for the time being. I found this article an interesting read, from the Business Spectator re ArcelorMittal;


By Philip Blenkinsop of Reuters

BRUSSELS -- ArcelorMittal, the world's largest steelmaker, unveiled plans to slash up to 9,000 more jobs, saving $US1 billion a year in response to a global economic downturn.

The company said it would launch a voluntary redundancy scheme for largely white collar staff to make the cuts, which could affect about three per cent of its workforce.

It warned on Tuesday that it might lay off 16 per cent of its US workforce, or around 2,400 people, as it cut steel output there by 40 per cent.

"The global economic reality means that it is only sensible to adopt such measures," Bernard Fontana, a member of ArcelorMittal's management committee, said in a statement.

ArcelorMittal, which has a global workforce of over 326,000 in more than 60 countries, has called a meeting of the European works council in Luxembourg on Thursday to present the plans.

Investor concerns about the impact of a dramatic downturn in steel demand on the industry have been building for months. The company's shares hit a four-year low of €12.93 a week ago and five-year credit default swaps in the company, a sign of how likely the market believes it will default on debt, have risen above 900 basis points from below 100 at the start of the year.

A rapid slowdown in sales by carmakers, key users of steel, the Chinese economy cooling to single-digit growth, and tougher times for Russia all bode ill for the sector, which has closed furnaces, slashed production and extended holiday breaks..

The Luxembourg-based company announced earlier this month that it would cut worldwide production by 35 per cent, up from a previous target of 15 per cent. It also said it would pause its growth strategy and seek deeper cost cuts.

The company could not give a geographical breakdown of the planned 9,000 job cuts, nor an envisaged timescale.

Michael Shillaker, analyst at Credit Suisse, described the industry's massive production cuts as unparalleled.

"There can't be anyone out there who isn't impressed," he said, adding they should be temporary as long as the downturn did not become a depression.

"Arguably by Q2 we could see steel prices rebound ... and in 12 to 18 months we could be talking about capacity constraints again."

Earlier on Thursday, the company said it was considering output cuts and short-time working in December at its German plants in Hamburg, Bremen, Duisburg and Eisenhuettenstadt.

End.


Looks like Sundance holders will have to continue to be patient on the prospect of finding that strategic partner.