SDL - Sundance Resources

[jonojpsg]

Hey kennas,
I'm sure the info is back there in this thread somewhere, but just to update and based on recent transactions in the IO world:

SDL
Current MC = $150m with 1.8bn shares on issue @ $0.08
Resources - 2.45bn tonnes with most of that itabirite (some 200m tonnes of DSO)
Cash - $25m

Recent transactions in Brazil have valued itabirite ore at $1 per tonnes, although these transactions were made prior to the latest couple of months of economic mayhem around the world.

So taking a discount of 75% off that and pricing SDL resources at $0.25 per tonne gives an approximate "value" of $600m. IMO this is probably a reasonable value to place on SDL

 

[golfmos123]

SDL jumping up this morning on reasonable early volume. Hasn't been in the dizzying heights of 9c for a little while. OFten leaks information prior to an announcement so maybe there is somethign to report soon?? Who knows??

 

[quinn123]

Currently SDL is trading at 8.6 cents, up 7.5%, 1:18pm 2nd Jan '09.

I read this the other day:
Chinese firm to make $2.6bn investment in Liberian iron ore mining WEST AFRICA
China Union intends to spend US$2.6bn to bring the Bong iron ore deposit to production within two years, and will also recondition the capital's port and build a hydro power plant.
Author: Alphonso Toweh
Posted: Tuesday , 23 Dec 2008
http://www.mineweb.com/mineweb/view/mineweb/en/page39?oid=75697&sn=Detail

Looks like there is still interest from China in good quality Iron ore projects. The above mentioned Bong Iron ore deposit is in Liberian, West Africa about 80km from the coast. I was unable to find any information on the size or type of the deposit. In your opinion do you see this as positive news, that there is still interest in these types of projects?

Cheers
Quinn

 

[golfmos123]

Thanks for the info quinn...

I think it is positive - I don't think that there is any doubt that quality deposits and assets are valuable in the medium to long term. The SDL board have been shopping for prospective partners for a while now and that is apparently their most important priority for 2009.

The only sad thing is that in the current climate, quality assets might get snapped up for far less than they might have a year ago - potential bad news for speculative investors who might not achieve the returns that they had hoped for. SDL may well be a case in point here. Off topic slightly, but GBG are similar - have a large amount of cash, off take partners in place and plans to export in 2009, but their SP has languished somewhere around 60-70% off their highs last year.

I hold SDL and continue to hope that there is much room for the SP to increase before I will be looking at cashing in...

 

[Justthinkin]

golfmos123... your comment re assets crossing at a discount is real and over Xmas I contemplated what the percentage might be given different classes of assets. Cash box companies should be discounted at this percentage, IO coys at this etc etc... what a hopeless task

IMHO it is hard to read much into any bounce. Window dressing was last weeks theme... and this weeks is ??? God willing , getting ready for an early 2009 bounce...

SDL's assets I think do have a certain degree of immunity... after all how much more can they be discounted. Overall however is :
(a) Talbots 20% stake...
(b) the Cameroon govts apparent good association with SDL; and
(c) as noted, continuing Chinese interest (who unlike a large slab of the world take longer term view of the world...) in nigh developed assets.

If I were having a guess (as in assemble and order otherwise extremely random thoughts), I'd be looking for an offtaker announcement in the near term. If I were a betting man I'd be punting that the apparent lesser soverignty risk associated with the project would have excited interest by major players lokking to secure off-takes ex non mainstream player...

Cheers

PS DYOR. The above are just the rantings of a little violet man wearing designer shoes and mathching handbag joyfully running around in my head...

 

[quinn123]

Shares were trading at 10 cents at 3:27 today up 8.7%, and the volume is large at 29,797,861.

Does anyone know why?

Cheers

Quinn

 

[dj_420]

Shares were trading at 10 cents at 3:27 today up 8.7%, and the volume is large at 29,797,861.

Does anyone know why?

Cheers

Quinn

Iron ore stocks across the board were up, copper/gold stocks up, coal and uranium stocks up. Only ones that did not have a rise really were zinc pureplays.

A LOT of money has been sidelined for a long time and some of this is starting to return.

I for one am bullish on coal/uranium and gold stocks this year. If iron ore demand holds up and negotiations are NOT as bad as what has been bandied around we will see some massive increases for producers.

 

[golfmos123]

Another nice rise and another increase in volume. Not sure what to put it down to, but as I've said before, SDL leaks pre-announcement. I would not be surprised at all to see a positive announcement in the next few days to put some fact into the picture.

 

[The Muffin Man]

I would be quite surprised if a new announcement is not forthcoming from the company within the next few days.

Last two days of trading:

Volume - 13,643,882, Up 15.00%

Volume - 31,146,359, Up 14.13%

Not normal trading.

 

[fighting41]

Like clock work...

CAM IRON SELECTED BY CAMEROON GOVERNMENT TO DEVELOP WEST AFRICAN IRON ORE EXPORT TERMINAL

International Operators Submit Proposals for Financing and Construction of a New Deepwater Port near Kribi in southern Cameroon

Sundance Resources Limited (ASX: SDL – "the Company") is pleased to announce that its Cameroon operating subsidiary, Cam Iron SA, has been selected to develop an iron ore export facility as part of a multi-user deepwater port project south of the coastal town of Kribi in Cameroon, West Africa.

Under the Government proposal, the new port is to be developed as a multi-user facility by some of the largest resources, logistics and construction companies in the world. The new port is expected to become a major shipping hub servicing the Mbalam Iron Ore Project as well as other emerging industries in the region.

The announcement was made last week by the Cameroon Minister of Transport, Mr Gounoko Haounaye, acting as Vice Chairman of the Steering Committee coordinating the port development. It follows review of proposals from a range of international developers and port operators.

Cam Iron SA submitted its proposal to the Cameroon Government both as an independent operator and as part of a consortium comprising Rio Tinto Alcan, the Bolloré Group and the Vinci Group – all major international companies with existing operations in Cameroon. Rio Tinto Alcan is a leading global supplier of bauxite, alumina and primary aluminium. The Bolloré Group is a diversified French-based conglomerate whose international logistics division has extensive operations in Africa. The Vinci Group is one of the world’s leading construction companies.................

Up 20-25% so far today

 

[quinn123]

Certainly has been like clockwork ...
This is a very important milestone for the development of their Mbalam project.
Share price is up by 20% atm.

Cheers,
Quinn

 

[CarbonSteel]

Thanks to those companies who have decided to limit IO output by not further developing existing operations. Notably RT for Pilbara and Corumba :thankyou:

 

[fighting41]

http://www.asx.com.au/asxpdf/20090113/pdf/31fkbxcsrvydkr.pdf

wrist slap

 

[paddy]

Great news, not the announcement I was expecting though. Hopefully they'll follow it up with a positive result from the aeromagnetic survey and we can get a solid and sustainable increase in share price. I'm pretty sure that Don Lewis gave mid-January as the likely date for release of those results at the AGM.

 

[The Muffin Man]

There are articles and links throughout this thread concerning the multi-user port, and the fact that Rio and other major players were also in the running to help construct it. For mine, this is another major box that can be ticked.

One thing I would like to mention, as I brought up in previous analysis about infrastructure and how it would be great if the costs could be spread;

If you go through previous presentations given by the company concerning the CAPEX of the project, approximately $530m was set aside for construction of the port in the total of $3.27Bn.

Within the announcement today, it said "Recent marine surveys have allowed optimisation of the port design with total marine construction costs now estimated to be in the range of US$160 million (excludes materials handling infrastructure and utilities). This is approximately US$50 million less than the cost estimated in the pre feasibility study."

My question would be, now that all of these other companies are also financing the project (including Vinci, who will handle civil works, utilities, and infrastructure) what is this extra $370 million going towards? From what I had read, my impression was that the original $530 million for the port was if SDL was to construct the whole thing themselves. Could we be starting to see the CAPEX come down? That would be a welcomed scenario.

Following on from that, could SDL now try and work with the other participants from the port project in the area of rail infrastructure? I'm assuming the other participants will need railways running to the port also, which could open another major opportunity to decrease the CAPEX. If SDL could spread some of the rail costs (CAPEX estimate of US$1,423 million), that could be a watershed moment.

Looking forward to future releases, hopefully about off-take agreements and strategic partners. Just my thoughts.

 

[RP_Automotive]

Looks like the ASX are catching on, or have had enough of SDL leaking like a seethe (see ASX queries in SDL announcements).

In regards to the latest announcements, great news. As many have said...SDL are 'ticking the boxes'. I applaud the directors for their efforts, they have definitely delivered to shareholders IMO. Leys hope they keep it up.

 

[Sean K]

I applaud the directors for their efforts, they have definitely delivered to shareholders IMO. Leys hope they keep it up.

Delivered to shareholders?



Perhaps they are moving forward in the project and making things happen, but 'delivered to shareholders' is normally in terms of some sort of financial gain. I suppose it was if you sold out in Sep 07, otherwise long term buy and hopers are in a world of hurt.

That long term bottom around 10 identified a while ago has held OK.

 

[The Muffin Man]

Delivered to shareholders?



Perhaps they are moving forward in the project and making things happen, but 'delivered to shareholders' is normally in terms of some sort of financial gain. I suppose it was if you sold out in Sep 07, otherwise long term buy and hopers are in a world of hurt.

That long term bottom around 10 identified a while ago has held OK.

Kennas, I think you will find it difficult to find a significant number of shareholders that are unhappy with the performance of the current board of SDL. In terms of placing the company in the best position possible regarding the Mbalam project, the board has delivered. In terms of completing what they set out to complete year by year, the board has pretty much delivered.

I think the majority, if not all of the SDL holders, were aware of the risks they were taking by investing in a speculative mining company with one major asset. The board can not be held responsible for the recent fall in the share price because we all knew this would be the result if there was significant market deterioration both generally and in the iron ore market. That's a risk the investor knowingly took, and to judge the performance of the board based on this paints an extremely inacurate picture of their performance over the past year or two.

I'm very happy with the boards performance, and do not attribute any share price deterioration to their perfomance, and neither would anyone else with any kind of knowledge of the SDL scenario. If you are displeased with the current situation you really have no one else to blame for your predicament but yourself, because it was you who invested in the speculative stock in the first place, and you should have known the risks about what would happen if the World economy deteriorated. SDL has been hit by a bit of a perfect storm, as a lot of companies have, especially speculative miners.

If the board had made bad decision after bad decision, I would be the first to vent some frustration, but that simply isn't the case.

 

[jonojpsg]

COmpletely agree Muffin Man. SDLs share price was pushed up by speculators looking for a quick buck and by the rampant iron ore bubble that this accompanied. Given the stage that they were at then, it was way ahead of it's value. Similarly, given the stage they are at now, despite the change in world markets and iron ore demand, they are probably undervalued.

IMO they are progressing very well

 

[snopandsnap]

SDL is not looking very good IMHO. I think we will see 7 cents within the next 2 weeks. I dont think their only project will get up and running for many years, if at all. The price of IO makes it unviable and the port and rail costs are extreme. They basically have no cash and i cannot see a Steel Mill anywehre in the world helping them develop their deposits any time soon. You can also completely rule out the credit markets. Also, Africia is unstable at the best of times.

Brockman Resources seem a far superior buy IMO. They have 110 million in the bank, no debts and only 130 million shares outstanding. They are currently trading at cash value only. 1.6 Billion tones of high grade ore within a few kms from existing, new train/port facilities.

Also, they are currently in talks with up to 12 different steel producers from several different countries and have appointed UBS to make a deal.

Much better play IMO. Good luck with SDL. I have it on watch and i may grab a few hundred thousand at 5 cents for a gamble.