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SDL - Sundance Resources

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bleach8 said:
the buyer side is so weak at the moment ...

dont know whether it will hold the 0.130 ............................
Click to expand...

One way to look into SDL is how they are recruiting.
They are yet to get a director of projects, key project people even in this sluggish market.

The selection process is very vague.

The org structure is totally fluid and depending on the key person to be recruited. They are recruiting the down below person any way not knowing what the top project guy will say.

They are unsure on the type of material transport - rail or pipe.

Bottom line of so many key uncertainies direct one thing - chaos and delayed project execution.

This is my opinion as seeing the information available in public domain, reading news briefs, and applying my experience.

I used to hold it and bought and sold at about 40 cents.

Currently do not hold
 

I dont totally agree with you...

as per their recent report:

recruiting:
Appointment of General Manager, Finance and Commercial
The Company has appointed Mr Paul De Nardi as General Manager, Finance and Commercial. Mr De
Nardi’s previous role was as General Manager, Global Development at Rio Tinto Iron Ore with
significant prior investment banking experience with JP Morgan and other international investment
banks.

rail or pipe:
Infrastructure planning continued in the December 2009 Quarter with review of the rail corridor route
and infrastructure costs by Calibre Engenium JV (CEJV). Route optimisation modelling has been
completed and has confirmed the Mid-Northern Corridor as the preferred, least cost alignment

CEJV has been appointed by Sundance to complete definitive feasibility study of the rail package in
2010. CEJV is one of Australia’s leading heavy haul rail engineering groups having completed rail
project studies and execution for Rio, BHP, FMG and a number of other iron ore project developers in
Western Australia. They also have West African experience, having previously worked on Rio’s
Simandou iron ore project in Guinea.

The alternative slurry pipeline option for transporting ore product to port remains a viable option but
assessment of this option is on hold pending definitive engineering and commercial assessment of the
preferred rail option.


I guess the only reason that they didn’t reach a finance deal in July last year was that the major SHs and directors believed that could be better off to wait, define more ore and advance the project a bit further, so they could be in a better position to negotiate a bigger slice for the SHs.

The bottom line is China want the iron ore. They wanted last year, and they still want this year. Iron ore was identified as the key resource for their national interest.

As a result, SDL had a chance to do a deal with China, but they didn’t. The only reason was the management understood the potential of the project and wanted better terms from any deals.

Again, the new General Manager Paul De Nardi, as the former manger of RIO’s Iron ore global development, I am sure he is extremely familiar with most major iron ore developments in the world. I don’t think he would join SDL if he wasn’t confident with the potential of the company.

My impression is the management is confident with the potential resources underground. However, they are not rushed to reach any deal atm, due to the favorable market trend and the potential of the project.
 
Also not rushed to make any deal coz they have about $80-90m in cash just raised!! This was the key reason for the raising, to give them a chance to get the project to a much better stage for negotiating finance/JV/offtake whatever so that we shareholders get a bigger slice of the billions of $ profits that are going to flow from this.

Note that the WE Australian ran a story about BHP getting a headstart on further expansion of its Pilbara IO ops, they quoted a figure of about $6bn to expand from 200MTpa to 240MTpa, or 40MTpa. If SDL have to fork out $3bn or so to get 35-50MTpa, that sounds like a pretty good project to me.
 
Feb. 1 (Bloomberg) -- Sundance Resources Ltd., seeking to build a $3.3 billion iron-ore project in Cameroon, fell as much as 7.1 percent after China said it plans new measures to rein in overcapacity in the steel, cement and other industries.

Perth-based Sundance was trading down 3.6 percent to 13.5 cents at 11:17 a.m. Sydney time on the Australian stock exchange. The stock dropped 6.7 percent on Jan. 27.
 
DRILLING COMMENCES AT KEY NABEBA DEPOSIT.

see attachment, news came out overnight


**International iron ore company Sundance Resources Limited (ASX: SDL – "Sundance") is pleased to announce that it has commenced drilling at the Nabeba Deposit in the Republic of Congo, a key exploration target for the Company’s Mbalam Iron Ore Project in 2010.**
 

Attachments

  • drilling at nabeba.pdf
    1 MB · Views: 13
Dated: 28 July 2009.


Ethics indeed. A commendable attitude sir. The price on this date was 18 cents. Probably you bought well before that. But I am interested in when you sold....after 28 July 2009....and you were able to achieve a sale price of 40 cents approximately. I must have missed it! On what date did you sell?

Dated: 1st February 2010


Obviously you were a holder on 28 July 2009 and you were a seller (for 40 cents) since that date.

Which of these posts is more accurate sir?

Again, I admire your ethics.
 
not much movement or news here for a while now.
Stephen Bartrop a resource analyst in an interview yesterday has SDL on his recommendation list.

That is all I have heard of late - any one else heard any news?
 
No I havent heard much lately either. Now seems a good time to accumulate (which is what I'm doing).

The next 6 months will be interesting to see what developments come out in regards to mining permits, financing and general 'movement of the project', especially towards the 4th qtr of this year I would hope.
 
Since receiving the $85 Million, SDL have stepped up their recruiting and drilling campaigns as they try to finalise their feasibility study and secure strategic partners. The Chairman and Don Lewis met with the President in February, and you can see vision on youtube.

Deutche Bank are to recommend preferred strategic partners by March / April and all going well with the drilling results and feasibility study I am anticipating an announcement on strategic partners before the end of the financial year.

The main risks at the moment include:

- Finding someone to front up with the $3.3 Billion following the GFC
- Negotiating with the Cameroon Government
- The dilution impact from the $3.3 Billion required Capex.
 
alot of shares traded today up around the 100mill mark. It always is like this before an annoucement
 
G'day Ocelot,

I wouldnt get too excited. There were 94million shares traded in an after hours transaction. This could have simply been a transfer of shares by an Investment Fund.
 
Seeing that SDL are not in a position to release their own shortlist of potential strategic partners, I thought I would start my own. Feel free to throw any others that I have missed.

- China Exim Bank
- Posco
- Tata Steel
- Arcelormittel
- Metallurgical Corporation of China
- Citic Resources


CHINA EXIM BANK - http://english.eximbank.gov.cn/

The Export-Import Bank of China (China Eximbank) was established in 1994. Fully owned by the Chinese government and under the direct leadership of the State Council, China Eximbank is a government policy bank enjoying the same international credit ratings as China's sovereign ratings.

Recent investments by them include:

- Cambodia Hydropower Plant $558 Million January 2010
- Crude & Natural Gas Pipeline in Burma $2.5 Billion
- Ecuador Hydroplant $1.97 Billion
- Ethopia Hydropower project $408 Million
- Congo Hydroelectric plant $300 million
- Cameroon Hydropower station $795 million
- Laos Hydropower plants $559 million
- Zimbabwe loan deal for agriculture $5 Billion
- Ethiopia Hydroelectric power project $300 Million
- Mozambique dam $2 Billion
- Sudan Road building $300 million
- Latin America.Venezuela $12 billion
- Argentina $10 Billion
- Brazil $10 Billion
- Belinga Project, Gabon
- Mekin Hydro Electronic Project, Cameroon
- Optic Fibre Network, Cameroon
- Chad / Cameroon Pipeline

Summary: Exim Bank of China appear to be right in the thick of things. They have been financing projects of similar risk categories in coutries with risk ratings equal or worse then Cameroon.



POSCO

Based in Pohang, South Korea, POSCO is the world's second largest steel maker by market value and Asias most profitable steelmaker.

Currently, POSCO operates two steel mills in the country, one in Pohang and the other in Gwangyang.

With the strong Korean shipbuilding and automobile industry dependent on POSCO for steel, it has been seen as the bedrock of Korea's industrial development over the past 40 years.

Summary: Being the worlds second largest steel maker and being involved with site visits, they are going to be prominent.



TATA STEEL - www.tatasteel.com

Tata Steel formerly known as TISCO and Tata Iron and Steel Company Limited, is the world's sixth largest steel company, with an annual crude steel capacity of 31 million tonnes. It is the largest private sector steel company in India in terms of domestic production. It is part of Tata Group of companies. Tata Steel is also India's second-largest and second-most profitable company in private sector.

Summary: Being one of the largest steel makers in India, and having participated in site visits, TATA Steel is also going to be prominent in negotiations. Let's also not forget about the George Jones' visit to India in 2008, when he checked out of the Taj Mahal in Mumbai, just prior to the Terrorist attack. It is rumoured he was over there for discussions with TATA.



ARCELORMITTEL - www.arcelormittel.com

ArcelorMittal is the world's leading steel company, with operations in more than 60 countries. Head office is in Luxembourg and they have over 300,000 thousand employees.

ArcelorMittal is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks.

In 2009, ArcelorMittal had revenues of $65.1 billion and crude steel production of 73.2 million tonnes, representing approximately 8 per cent of world steel output.

Summary: Another company who participated in site visits and being the worlds largest steel company, they are sure to be a part of negotiations.



METALLURGICAL CORPORATION OF CHINA

MCC is a state-owned enterprise in Beijing, China, engaging in EPC (engineering, procurement and construction), natural resources exploitation, papermaking, equipment fabrication, real estate development. MCC is one of the largest equipment manufacturers in China, and the only central-owned enterprise that is authorized to run pulp-making and papermaking businesses in China and overseas.

The Company is involved in the construction of metallurgical, infrastructural facilities, other industrial projects, housing construction, municipal utility construction, installation of electrical and mechanical works, and handles high-rise buildings, mechanical engineering, electronics, power supply, petroleum, chemistry, textiles, transportation, communication, and building materials construction projects. The company also provides geo-technical engineering construction, industrial and civil construction, rock and earthwork excavation, equipment installation, and steel structure fabrication and installation services; and industrial products, including spiral welded pipes of various bore sizes, non-standard equipment, cold-rolled deformed bars, and forged precision metallic equipment. It also engages in water supply projects, sport cities development, and resource development. The company manufactures spiral coasters, and single-stand reversible cold-roll lines.

Summary: In 2007, MCC won the bid for a $880 Million Copper Mining project in Afghanastan, which you would imagine would have a similar, if not worse, risk profile to Cameroon and Don Lewis had a meeting with them on December 1, with the Deutsch Bank present. MCC also recently signed an $8 Billion deal with a Queensland Coal company.



CITIC RESOURCES

CITIC Resources Holdings Limited, a subsidiary of CITIC Group in China, is an integrated provider of natural resources (inclding petroleum, coal, metals) particularly petroleum business.

In 2007, CITIC Resources paid US$1.15 billion for oil fields in Kazakhstan and Northeast China from its parent company, CITIC Group. This accelerated CITIC Resources to transform from metal producer to oil producer. It expects to be the fourth largest oil producer in China, following Petrochina, Sinopec and CNOOC.

Summary: Could be the dark horse of negotiations, as it has invested in several projects alongside Ken Talbot.
 

Good effort and start Pythagerus.

Some additional information :

Please include some of the large steel corporations from India

Essar in your list. It has a very strong presence in Steel, Power, Construction, Shipping, Oil and Gas. What it lacks - mines. If you refer to Rockland RCI site Essar did throw its offer and took it off. What is interesting with this group is that it produces and consumes its own products. So when recession arrived Essar was affected marginally. They produce power few times more than total power produced by Australia !!!
Essar has its own large engineering group AEGIS to save a large money in design and fabricating plants. All of its plants are vertically and horizontally integrated and operate as profit centres. www.essar.com can be seen for extensive information.

Jindal - it is divided into few groups within the parental name of late OP Jindal. They have steel business, big power group, and iron making plants. Similar to Essar the group companies are vertically integrated and what produced by one profit centre within the group becomes input for another profit centre of the same group. Jindal has recently made a non binding offer for RCI . Recently RCI has rejected its offer. When completed in 2011 Jindal Power group will produce more power than Australia as a nation produces. Please do not forget the high population of India (Australia has only 2% of India's population)

Tata Steel is probably the fifth l(not 6th) argest steel group in the world. They acquired Corus (formerly British Steel) and Jaguar companies. Two costly mistakes when the market was hot. Tata makes every thing and owns iron ore mines (haemetite !), coal mines as well. It has developed a significant holding with RIV Riversdale Mining a coking coal producer. visit www.tata.com and www.tatasteel.com

Boas Steel and Wuhan Steel are worth mentioning. Both of them are owned by Chinese Government and have significant interest in Australian iron and ore mines. Centrex Mines in SA has significant connection with WISCO and the later are majority shareholder for Centrex.

Nucor will be very much interesed on SDL acquirement.

So will be Mitsubishi and Nippon Steel.

Thanks again for your good research and value based addition to this SDL thread. SDL is looking for a partner to do its EPCM and recruting senior personnel. It has a bias for Worley Parsons nevertheless the start of EPCM will make SDL in the front foot

DNH
 
G'day Miner,

Thanks for the response. The exact type of response I was hoping for. I also found this article in the news after posting.


March 7 (Bloomberg) -- Wuhan Iron & Steel Group, China’s third-biggest steelmaker, is seeking to invest in more overseas iron ore assets to cut reliance on expensive imports, General Manager Deng Qilin said.

“We aim to be self-sufficient in iron ore supplies in three to five years and reduce purchases,” Deng, who’s also chairman of the China Iron & Steel Association, told reporters today in Beijing during the annual National People’s Congress. “We will continue to invest overseas even as the cost rises. We have achieved good returns from our previous investments.”

Owning resources gives Chinese steelmakers more control over raw material prices and reduces dependence on overseas suppliers like BHP Billiton Ltd., Rio Tinto Group and Vale SA. Contract iron ore prices may rise 60 percent this year on strong Asian demand and a push by BHP to peg pricing to higher spot levels, Morgan Stanley said last week.

This year’s price negotiations with suppliers will be “difficult” because of “differences in view,” Deng said. “We can’t accept a price that would force us to incur losses.”

Chinese steelmakers may have to accept a price increase higher than the 20 percent than they expected this year, Angang Steel Co. Chairman Zhang Xiaogang said on March 5 in Beijing.

The benchmark cash price of iron-ore delivered to China jumped to $134.50 a metric ton on March 2, the highest since at least Dec. 12, 2008, according to The Steel Index. China’s imports rose 42 percent to a record 628 million tons last year.

China failed to reach an accord over prices last year with Rio, BHP and Vale, the world’s three biggest iron ore suppliers. Domestic steelmakers reached private agreements with the suppliers instead, Deng said.

Wuhan Steel expects to produce 36 million tons of crude steel this year, up from 30.3 million tons in 2009, Deng said. The nation’s steel output may rise to 600 million metric tons this year, from 568 million tons in 2009, Deng said. Production capacity probably has exceeded 700 million tons, he said.

Chinese steelmakers, which controlled almost half of the world’s production last year, will have small profits over the next 10 years because they cannot raise prices enough amid the domestic overcapacity, Deng said.

The Chinese government should regulate the market for iron ore trading to stop speculation over prices, he said.
http://www.businessweek.com/news/20...s-more-iron-ore-assets-overseas-update1-.html
 
pythagerous and miner - excellent posts.

excellent research you have done on potential partners, the state of play etc.

i have recently been adding to my holdings in this flat period.

something may be in the wind soon - I note there were above average trades today of 20 Million + SDL traded.
 
see todays SDL ASX company announcemet - a very positive report.

- govt
- potential backers
- drilling
- construction start 2011
- etc
15.o c close today.
 
LRG said:
see todays SDL ASX company announcemet - a very positive report.

- govt
- potential backers
- drilling
- construction start 2011
- etc
15.o c close today.
Click to expand...

well...nothing new and groundbreaking in the announcement today ...but by reaffirming construction start early 2011, hope we have more encouraging news for the following 9.5 month of the 2010
 
bleach8 said:
well...nothing new and groundbreaking in the announcement today ...but by reaffirming construction start early 2011, hope we have more encouraging news for the following 9.5 month of the 2010
Click to expand...

I beg to differ, but the initial drill holes from Nabeba give very positive indications towards achieving the stated exploration target of 100-250Mt of DSO. If you look at the main area (with three of the four holes) it's about 500m radius.

pi x r2 = 750000m2 x an average depth of 50m at 60%-ish Fe
gives 37.5M m3 @ say 3t/m3 average density gives 112Mt of DSO. Very rough calc with obvious shortcomings BUT still a big step towards having 400Mt DSO instead of 215Mt.

In turn this makes the initial easy startup phase much more profitable and longer enabling payback of finance, etc. This will make obtaining a favourable financial backing much easier IMO.

Also seems to be very positive language used to describe meetings with Cameroon President and progress made on DFS.

I still have comparison research from 2006 that puts SDL up against FMG, and while that was before the GFC, there are still valid points it makes about relative enterprise value for different stages of development. Basically by start of construction, EV should be around 30-40% of production EV.

If we assume that SDL should be worth say 35Mtpa x $30/t net after costs giving $1.05bn free cash flow, then apply a PE of 5, we get $5bn EV. 30% of this is $1.5bn or about 50c per share. These are reasonably conservative figures given the projected cash costs of $30/t and long term IO price of $60/t.

So by 2011 maybe 50c per share is a fair target and allows some reasonable appreciation over the coming 9 months assuming it doesn't just sit at 15c then jump once construction starts Although a stepwise progression is probably in order with jumps at key announcements.

Anyway, feel free to cast a critical eye over the figures and let me know what you all think Personally I am building my stocks as fast as I can (currently hold 150k- shares that is, not $!)
 
Trolling through prior releases are documents, SDL's timeline appears to be as follows:

March/April - Deutche Bank to reccomend preferred strategic partners
April/June - Drilling results and feasibility study completed
June/July - Announcement to be made on strategic partners
Late 2010 - Finance to be arranged
Early 2011 - Construction to begin
 
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