SDL - Sundance Resources

[Miner]

Folks

Just a reminder for people currently in Perth and have interest in SDL : Today 2 PM is the AGM at Esplanade.

Please come prepared with your questions if attending.

I did not see any concern on raisnig the directors' remuneration by almost 50% for the same period when the share price has gone down from 40 cents to 9 cents. What KPI did they perform to ask for such a mamoth salary rise. If that is the trend, if they will do more damage to get more pay rise next year

 

[The Muffin Man]

Personally, I don't think the board has performed too badly. We all understand why the share price has fallen, and it has nothing to do with the performance of the company.

We have seen a dramatic increase in resource levels, and the company has generally ticked off most of the boxes it set out to during the year. Everyone just needs to be patient enough to ride out the current climate we find ourselves in, and remember that resources the company holds at the moment are World class.

As you read the announcements, the board says what they are planning to do in the coming period. Generally, they get done what they said they were planning to do. Although I know it's a basic assessment of it all, it's a good indicator in my opinion that the project is moving forward nicely.

 

[Miner]

QUOTE=The Muffin Man;367021]Personally, I don't think the board has performed too badly. We all understand why the share price has fallen, and it has nothing to do with the performance of the company.

We have seen a dramatic increase in resource levels, and the company has generally ticked off most of the boxes it set out to during the year. Everyone just needs to be patient enough to ride out the current climate we find ourselves in, and remember that resources the company holds at the moment are World class.

As you read the announcements, the board says what they are planning to do in the coming period. Generally, they get done what they said they were planning to do. Although I know it's a basic assessment of it all, it's a good indicator in my opinion that the project is moving forward nicely.[/QUOTE]


Interesting ticking off Muffin Man

I hope you are not one of the SDL directors or having some conflict of interest with that proposal in AGM !!

One basic thing I would consider : If my money say 40 cents has come to 9 cents in a consistent sliding range irrespective of recent global turmoil, how can I pay for KPI linked bonus.

Currently most of the companies are either freezing the employee salaries or providing a nominal increment for those who deserved.

The directors bonus also linked with the MC value of the shares. That's how Macquarie group always revalued their shares and the CEO got millions in his pocket before departing. That was a bad strategy for company as well.

Honestly I am agreeing to be in disagreement for your ticking off box .

 

[The Muffin Man]

I'm a shareholder mate, just your average joe.

To be honest, I think management has done quite a good job since I've been holding the stock, so I'm not against a pay rise. You reward people for their good work, and I think good work has been done. I have a pretty simple way of viewing it really.

Why base their salary on the price of the stock if the price of the stock is in no way reflecting the work that they have done, or what they have achieved? I don't see the point of not rewarding management because of a factor that is completely out of their control at this point in time (ie share price)

If the World was still motoring along at a great speed, and China was still pounding on everyone's doors for more Iron Ore, and we we sitting at the current SDL share price, then I'd have a problem. I'm of the opinion that, at this current point in time, the decline in the share price is to do with factors not linkable to management or their decisions I guess.

 

[paddy]

Hi all, I've been holding SDL and following this forum for over a year now, first contribution though.

I would have to agree with The Muffin Man on the salary issue. I re-read their 2007 annual report before reading the 2008 annual report, and they have achieved or nearly completed everything they said they would over the year. The share price is disapointing, but which company's isn't right now?

2 items of note that I picked up on from reading the AGM presentation. Firstly, they are now talking about annual production of 35-50 mtpa, whereas previously it was just 35. This can only be good.

Secondly, a lot of the timeframes have been pushed out from presentations made a year ago. While this is disapointing, it must be noted that it would be very hard to secure project financing in the current climate.

 

[Diesel]

Like most of you, I have held a long term interest in SDL as I was introduced to them by some family members. This week I made my initial investment and aquired 1,000,000 at an average of 8.9 cents.

Currently I consider SDL to be an exceptional Long Term buy due to the amonunt of resource (IO) currently confirmed but also the following points;

They have an exceptional board which consists of George Jones who has made a name for himself as an excellent strategic negotiator in finding offtake partners as well as finding finance solutions especially with the Chinesse. He is highly respected and has dealt with the Chinese for several decades which is currently demonstrated with his efforts at GBG and previously MUN.

As the Chairman expressed today "The company is in discussion with a number of major industry groups who have expressed a strong interest in the project in regards to iron ore sales, equity and financing". He also added that these parties include major steel mills and mining groups...

In regards to financing IMO this will happen considerably quicker than most people think. At present they have relatively small cash reserves and will require financing as early as possible. With the current structure of the board and their considerable experience in this area THIS WILL HAPPEN!!

Their resource grade and quantity is substantial and will attract alot of attention from larger mining companies wanting to cement their position in the world IO market.

The planning they have previously outlined has been met on neally all occasions and if not for world market downturn would be significantly further along..

Kind Regards to all SDL holders!!

 

[Miner]

Like most of you, I have held a long term interest in SDL as I was introduced to them by some family members. This week I made my initial investment and aquired 1,000,000 at an average of 8.9 cents.

Currently I consider SDL to be an exceptional Long Term buy due to the amonunt of resource (IO) currently confirmed but also the following points;

They have an exceptional board which consists of George Jones who has made a name for himself as an excellent strategic negotiator in finding offtake partners as well as finding finance solutions especially with the Chinesse. He is highly respected and has dealt with the Chinese for several decades which is currently demonstrated with his efforts at GBG and previously MUN.

As the Chairman expressed today "The company is in discussion with a number of major industry groups who have expressed a strong interest in the project in regards to iron ore sales, equity and financing". He also added that these parties include major steel mills and mining groups...

In regards to financing IMO this will happen considerably quicker than most people think. At present they have relatively small cash reserves and will require financing as early as possible. With the current structure of the board and their considerable experience in this area THIS WILL HAPPEN!!

Their resource grade and quantity is substantial and will attract alot of attention from larger mining companies wanting to cement their position in the world IO market.

The planning they have previously outlined has been met on neally all occasions and if not for world market downturn would be significantly further along..

Kind Regards to all SDL holders!!

Congratulations Diesel for your first and very well articulated posting.

Regards

PS : I do hold still some SDL

 

[Jewels]

Hey Team,
It appears that there are some misconceptions on this blog,so as I was able to get to the AGM thought I'd fill you guys in.
Firstly the directors remuneration thingy, like you guys, initially I thought that the directors were voting themselves a pay rise. NOT TRUE!
It would appear thet due to an oversite SDL had been paying it's directors more than it was allowed to, hence resolution 1. In order to attract quality directors in the future, and allow additional directors to be added to the board as their expertise became necessary, SDL had to increase the amount that it was able to pay the directors as a whole, hence resolution 4.
George Jones said that the board had no intention of increasing it's remuneration, and infact had decided to make the directors remuneration more transperant by paying all directors in cash, ie no shares, options etc, with bonuses paid on achieving certain criteria. GJ did not elaborate on the criterea, but I got the impression that they were both operational and corporate. If anyone wants to know I'm sure sdl could email their directors remuneration agreement to you on request.

I think we are all very lucky that GJ is still here. He was in The Taj Hotel in Mumbai less than 12 hours before the terrorist attacks. Apparently his floor was targeted by the terrorists with grenades and automatic weapons. What do you reckon could have happened to the SP if the terrorists had of arrived 24 hours earlier (Not to mention poor old GJ!)?

George expects 2009 to be a "hard year", although he does expect the share price to rise. In Georges words: "for the size of the resource, Sundances current market cap is a joke".
Don Lewis later explained that there was a South American I.O miner that was very similar (in terms of I.O. quality, type and output) to SDL, that sold a 40% stake to a Japanese steel mill for 5 Billion dollars about a year ago. Now I know it was at the top of the market, but you do the maths and compare it to SDL's current market cap of about $167million. Sorry can't read my own writing to give you the name of the company, if anybody really wants to know I'll email SDL and get it for you.

Big news for Don Lewis was the increase in output from 35mtpa to 50mtpa, with additional revenues created being used to retire debt earlier.
Infrastructure costs may come in under estimated capex. Siesmic work on the rail line has shown the rocks to be softer than originally anticipated, and further work at kribi shows that deep water is much closer to shore than first thought, allowing pilbra style loading facilities to be built.

One thing I've been worried about since the beginning of the world wide recession is whether or not 2012 was realistic for the commencement of production, not so much from a financing point of view, but more from a demand and supply point of view. When I asked the question of GJ his initial words were something like "at a stretch". He then went on to say that the Cameroon Gov't realised that this mine could go on to provide 8% of Cameroons GDP, and that both parties wanted to move this project forward as quickly as possible. He also said that he wouldn't retire until they had shipped their first ore.

Also on the world recession George was able to put a positive spin
on it for SDL. A lot of existing miners (read Vale, BHP, RIO, FMG) have put a hold on planned expansions, and minnows and hopefuls had no chance of raising finance. This meant that there shouldn't be a huge increase in supply over the next 3 or 4 years. On top of this the quality and the quantity of SDL's ore meant that it would be one of the most cost effective mines, and that in times of recession there would be a flight to quality.

Don Lewis explained that the aero magnetic data survey had only just been completed, and that results would be available in January. I'd expect that we can look forward to a very positive announcement in January. Look at Google Earth to get a bit of an idea.

Somebody asked about cash burn. Both DL and GJ were on the front foot. Apparently because SDL had spent so much and proved up the resource in such a relatively short time the Cameroon Gov't has relaxed its drilling and exploration requirements. I think DL said that they will have met the requirements for the lease in the next couple of months. Also DL let it slip that there could be an announcement very soon (Monday maybe) about a reduction in operating costs at the site. My gut reaction is that the drilling company that is left (One got the sack) will be drilling at a reduced cost to SDL. With current cash at bank both GJ & DL are not expecting to need to raise capital in the next 12 months.

Now we all know that the success of SDL hinges on two things: Offtake agreements and the MOU with the Gov't of Cameroon.
With the MOU, don't hold your breath! It would appear that the negotiation of the MOU is far more difficult than anticipated. GJ politely put it down to the French Beuracratic system that Cameroon had inherrited from it's colonial masters. However I got the feeling it may be far more complicated.
When I asked GJ about quotes attributed to him on Cameroon State TV (see my previous posts) he replied "that interview was given immediatly after he had a meeting with the prime minister and the minister for mines, and that they were still negotiating. The Cameroon Government understands that if the MOU is not favorable then the project simply wont go ahead, and both parties want the project to be a success."

I asked if off take agreements were dependant on the MOU? GJ's reply was "we are dealing with international citizins who understand the intricacies of dealing with Gov'ts when negotiating MOU's, they (the off take agreements) were not dependant on the MOU".

All in all I got a very good feeling about the meeting and SDL's future. GJ & DL believe that this project is going to become much, much bigger, and that we still have no idea how much ore is actually there, Mbalam is still open at depth of over 600m, and aero mag data still in the pipeline for other tennaments..

I think I may go out on Monday a top up with a few more. So many bargains, so little money!!!

Anyway hope that helps iron out a few things.

Ciao...Jewels

 

[Miner]

Thank you Jewel for such a comprehensive response for all of us after your AGM attendance

THanks also for clarification on the salary issue I raised.

I was a bit disheratened to hear two strong oppositions to my thought and last minute decided to abandon the AGM. Reading your note I realise I should have attended it.

Any way thanks for attending it for others and me


Regards

 

[Piggy Bank]

Hi Jewels,

Thanks for attending the AGM! Living on the other side of the country makes it a little hard for me to attend.

You have given a very comprehensive synopsis and provided some insight into the workings and future of SDL. Great work!

 

[The Muffin Man]

Thanks for the run down Jewels, I'm also on the other side of the country so was no chance of attending. The overall tone seemed to be quite positive, and I hold quite a bit of confidence in the SDL board to continue delivering good results in the coming year. Things might take a little longer than first anticipated due to current conditions, but the tide will turn back to stronger demand for commodities and greater business confidence at some stage, and this can only further help the projects chances of success.

 

[LRG]

Thanks for all your comments recent posters. as previous, I am a long term holder and agree with the prospect that by this time next year the SP should have appreciated a fair bit. Given the resource size, the management team and the laid out program of developing I continue to increse my holdings at these very low SP values.

I think we have seen a bottom in the SDL SP now (I hope) and as time approaches 2013 I anticipate steady growth with spikes at significant announcements.

SDLers - keep the faith - I think we will be okay.

 

[Miner]

Ken Talbot is an outstanding supporter for SDL.
What will happen to SDL and RIV should the court find him as guilty and send to jail ?

http://www.abc.net.au/news/stories/2008/12/02/2435518.htm?section=justin

 

[Jewels]

Don't even think about it Miner.
Anyway there is no way that Ken Talbot will end up in Gaol. He has way more money than OJ Simpson.

 

[astroboy]

Talbot to face trial

Angie Bahr
Wednesday, 3 December 2008


FORMER Macarthur Coal chief Ken Talbot will stand trial on 35 corruption charges in the second quarter of next year after a committal hearing ended yesterday.



He will face court together with former Queensland industrial relations minister Gordon Nuttall over payments of $300,000 made from Talbot to Nuttall.

The payments were made between 2002 and 2005 when Talbot headed up Macarthur, and Nuttall was minister under Peter Beattie’s government.

Both men will plead not guilty. They face possible jail terms of up to seven years if convicted.

According to the Australian, a chain of politicians testified at the committal hearing, including former premier Peter Beattie and deputy Terry Mackenroth as well as Premier Anna Bligh, who all said Nuttall had not tried to influence a cabinet decision when Macarthur was granted a $28 million infrastructure loan.

While Talbot this year stepped down as chief executive of Macarthur and sold his stake, he has not been quiet on the resources scene.

This year he took a stake in African miner Riversdale Mining, a 19.9% stake in Pennsylvania coal miner PBS Coals and also purchased shares in PNG explorer Goldminex Resources.


http://www.miningnews.net/default.asp

 

[Pythagerous]

In order to try and get my head around just how big an Ore resource SDL has on its hands, is anyone able to draw some comparisons to other major Ore resources, such as comparing SDL's proposed amount of ore production per year against some of the major players. I am also interested to know how the Mbalam project compares to some of the major projects in the world, as far as total amount of ore available.

Cheers.

 

[TheAbyss]

In order to try and get my head around just how big an Ore resource SDL has on its hands, is anyone able to draw some comparisons to other major Ore resources, such as comparing SDL's proposed amount of ore production per year against some of the major players. I am also interested to know how the Mbalam project compares to some of the major projects in the world, as far as total amount of ore available.

Cheers.

Do not have a fundamental summary for you as they are in the thread already.

Interesting article today though at the link below.

Most interesting is

"The project has the potential to be a top 10 global producer. More to the point, it offers the potential for a new source of long-term supply that falls outside the control of the big three — Vale, Rio Tinto and BHP Billiton.".

http://business.theage.com.au/busin...ide-mbalam-vies-for-top-10-20081207-6tan.html

 

[LRG]

possible SP problems ahead.

see ASX notices concorde has off loaded 90 million shares

things look like heading south for the next few mths with finance the way it is and SDL saying it will slow down drilling etc.

hang on buy more on the dips to 4 cents

 

[spottygoose]

things look like heading south for the next few mths with finance the way it is and SDL saying it will slow down drilling etc.

They don't need to drill more as they have already exceeded their target. It makes great sense to preserve capital now and concentrate on funding & potential partners. Smart move imo.

 

[Agent 86]

LRG,

I gotta say I dont agree at all with yr analysis.

Concord has only sold 4.8m shares to get them below the 5% threshold. They previously owned 95,950,337 which equated to 5.1%. As they sold 4,826,266 it has brought their shareholding down to 91,124,071 or 4.84%.

Also the cessation of drilling is a good thing - it is all about getting a deal over the line now for the next direction cos there is s s*hit load of IO in the ground to get a big partner involved.

Overall bad sentiment in the sharemarket might get the SP down to 4cents, but not Concord or the drilling being stopped.