SDL - Sundance Resources

[nioka]

This could be last chance to hope on board.

I like the spelling of "hop". Maybe it was the right choice of words.

SDL has recovered 170% since my buy followingthe tragic accident and that increase is due to the actions of the new board. I am a long term holder to the point where I suggest that it is fairly priced now. I expect there will be gradual increases as the steps towards production are successfully completed, however production is a long way down the track. Don't expect too much too soon. Patience should be rewarded but be prepared fo a possible slip between the cup and the lips as it were.

A lot is riding on where and at what conditions are encountered raising the capital required to comlpete the project and the politics that will be attached.

 

[kash]

Thing are moving along again with new appointment. But there are also some nice comments about progress in other areas.
Mr Casello’s appointment comes as Sundance prepares to complete foundation off-take,
funding and joint venture agreements to underpin development of Mbalam.
“I have made it clear that I have set a firm deadline to have all foundation agreements
required for development of the Mbalam Project to proceed in place by no later than March
2011 – a timetable which would enable us to begin construction on schedule by the middle
of next year. With key MOU’s recently completed in relation to the development of port and
rail infrastructure, I am confident that this timetable is achievable.

 

[jonojpsg]

I like the spelling of "hop". Maybe it was the right choice of words.

SDL has recovered 170% since my buy followingthe tragic accident and that increase is due to the actions of the new board. I am a long term holder to the point where I suggest that it is fairly priced now. I expect there will be gradual increases as the steps towards production are successfully completed, however production is a long way down the track. Don't expect too much too soon. Patience should be rewarded but be prepared fo a possible slip between the cup and the lips as it were.

A lot is riding on where and at what conditions are encountered raising the capital required to comlpete the project and the politics that will be attached.

I tend to agree nioka. I think with the latest comment from GJ that all arrangements will be in place no later than March next year, that kind of pushes back the end of year target that a lot were looking toward, probably including me. I think a fair valuation would be around 50c at the point where all arrangements are in place which gives a fairly steady rise over the next 6 months.

Don't forget too that the share consolidation will also be in play at some point - most likely 1:10 so share price would then have more room to move at lower percentage gains, eg current SP would be $2.75 rather than 0.275. Would make it less attractive to day traders. Also means longer term price targets are likely to be in the order of $15+ post consolidation.

 

[thestevo888]

Alright, time for another annoying newbie question. I've sunk a bit of money into Sundance over the past couple of months - wish I'd got in a little earlier than I did- 11 cents vs 14-18 cents - and am really impressed with the management, potential resources, and other fundamental aspects of this company...

Can some wise head tell me, though, what this company should be worth in today's market, when it is engaged in full scale production? (with or without the share consolidation, of course) Is the last post about a $15 post-consolidation sp about as high as it will go on its current resource estimates? I would have thought (and again, I stress newbie - don't hack on me too badly) that with an unconsolidated share base and in full production this would have the potential to go to $4 or more... or am I way off track?
Obviously the comparisons with FMG that the broker report of a few years ago brought up rely on a lot of variables.

Thanks in advance for your thoughts, guys - a good hour every day on this site is doing wonders for my understanding of the sharemarket.

 

[nioka]

Can some wise head tell me, though, what this company should be worth in today's market, when it is engaged in full scale production? (with or without the share consolidation, of course) Is the last post about a $15 post-consolidation sp about as high as it will go on its current resource estimates? I would have thought (and again, I stress newbie - don't hack on me too badly) that with an unconsolidated share base and in full production this would have the potential to go to $4 or more... or am I way off track?
Obviously the comparisons with FMG that the broker report of a few years ago brought up rely on a lot of variables..

.

Read my last post again. Nothing I see changes my mind. There are a lot of "things" that can happen. The potential is great if the stars align. There is some risk. If the path to success was written in stone the SP would be based on a definite outcome.

 

[thestevo888]

Thanks Nioka. I musn't have expressed myself as clearly as I wanted to... it's been a long week.
I know there are risks associated with any resource company pre-production, which is why the sp is still under 30c. I suppose what I am curious to know is, if Sundance was in full production now, debt paid off, (as they are hoping it will be after 3-4 years of production) what its share price would be. For instance, all risks removed, favourable offtake agreements inked, etc would it be on a par with FMG?

 

[jonojpsg]

Thanks Nioka. I musn't have expressed myself as clearly as I wanted to... it's been a long week.
I know there are risks associated with any resource company pre-production, which is why the sp is still under 30c. I suppose what I am curious to know is, if Sundance was in full production now, debt paid off, (as they are hoping it will be after 3-4 years of production) what its share price would be. For instance, all risks removed, favourable offtake agreements inked, etc would it be on a par with FMG?

Hey stevo, IMO IFFF SDL were in full production at 35MTpa right now even with a debt of 3.5bn which would assume they borrowed the full amount and did not issue any further shares, they would be valued conservatively (asuming a price earnings ratio of 5) at $3 per share.

This assumes $100/tonne (after cost of production $25/t) giving them $3.5bn a year - 25% tax and royalties brings that down to say $2.5bn - $1bn debt and interest repayments leaves $1.5bn a year net income. Multiply by 5 to get 7.5bn and divide by 2.7bn shares on issue - close to $3 anyway.

Still agree with nioka though - LOTS of water to flow under the bridge before that happens!! I reiterate my price target of 50c by March (assuming finalisation of financing etc.) - obviously a sucker for punishment coz I know someone will remind me of this if it doesn't happen

 

[First Timer]

Hey stevo, IMO IFFF SDL were in full production at 35MTpa right now even with a debt of 3.5bn which would assume they borrowed the full amount and did not issue any further shares, they would be valued conservatively (asuming a price earnings ratio of 5) at $3 per share.

This assumes $100/tonne (after cost of production $25/t) giving them $3.5bn a year - 25% tax and royalties brings that down to say $2.5bn - $1bn debt and interest repayments leaves $1.5bn a year net income. Multiply by 5 to get 7.5bn and divide by 2.7bn shares on issue - close to $3 anyway.

Still agree with nioka though - LOTS of water to flow under the bridge before that happens!! I reiterate my price target of 50c by March (assuming finalisation of financing etc.) - obviously a sucker for punishment coz I know someone will remind me of this if it doesn't happen

Would you say this would be a mid to long term investment? Having shares in SDL myself just want to gauge what others think?

 

[jonojpsg]

Would you say this would be a mid to long term investment? Having shares in SDL myself just want to gauge what others think?

Could be whatever you want it to be...if you bought at 17c a few weeks back and they go to 34c next week you can double your money in a couple of months and move on to something else. Alternatively, you can wait for another 6-12 months and they might double again? It's up to you

Personally, I'm in for as much as I can get until financing is finalised and construction starts then I'm out...I reckon there's a good possibility that laying 400km of rail through the deepest African jungle might just pose some interesting challenges

 

[thestevo888]

Thanks Jono - that's exactly what I wanted to know. A lot of risks, I know, but I still think this could be an impressive success story this time in 3-4 years.
Bring on the next round of announcements!

 

[tucks]

up 2.5cents this morning on large volumes....announcement imminent or large Funds buying back??

 

[Surly]

Could be whatever you want it to be...if you bought at 17c a few weeks back and they go to 34c next week you can double your money in a couple of months and move on to something else. Alternatively, you can wait for another 6-12 months and they might double again? It's up to you

Personally, I'm in for as much as I can get until financing is finalised and construction starts then I'm out...I reckon there's a good possibility that laying 400km of rail through the deepest African jungle might just pose some interesting challenges

Or you could of bought three years ago at 80 cents and have almost got back to half of where you started. Who really knows!

cheers
Surly

 

[talktome]

A great read about our Chairman.


talktome


Source: http://www.theaustralian.com.au/bus...sundances-rescue/story-e6frg8zx-1225939880308


RESOURCES industry stalwart George Jones' rise to the top of the corporate ladder isn't your typical mining fairytale.

He grew up in an orphanage, moving between 12 different schools in the nine years of education he received, before entering the army, with the world of mining not even entering his thoughts.

But it has been the prospective industry that has given him his fortune and seen him take on the role as the "godfather of junior miners", a role he takes seriously because he lacked a mentor when he was young.

His passion for the sector, and especially the people, was never more evident than his rapid response to the Sundance Resources tragedy, which saw its entire board killed in a plane crash in Africa in June.

Jones has enormous guilt for the lives lost, having employed each of them when he was chairman of the company.

He had retired from the sector last year, after he was diagnosed with Meniere's Disease (an inner ear disorder), which saw him in rehabilitation for six months. But the responsibility the 66-year-old felt towards the company saw him step back into the chairman's role at the junior iron ore miner and also take on the same role at Gindalbie Metals, a role he had previously stepped down from.

"I was phoned during the night (the plane was reported missing). They are all friends of mine and I appointed them and if it hadn't been for me stepping down, I would've been on that plane," Jones says.

Those killed included mining billionaire Ken Talbot, chief executive Don Lewis, company secretary John Carr-Gregg and directors Geoff Wedlock, John Jones and Craig Oliver. The group was visiting the junior's Mbalam iron ore project in Cameroon, near Congo.

Jones said he was determined from the outset to help Sundance survive the tragedy, because he has memories of a plane crash in Western Australia's Goldfields region in 1980, where the entire board of a junior miner was killed and the company folded.

"There was no one prepared to step up and as a result creditors and banks wound the whole group up, everyone lost their jobs and projects shut down and it was a financial disaster," he recalls.

"That is still in my memory. I immediately thought to myself, we cannot let that happen (with Sundance)."

Jones says he was the logical person to step up and see the emerging miner through the tragedy, but he also felt a personal responsibility to resume his previous chairman's role.

"They were all friends of mine and it's not stuff you learn in the rule books -- you just experience how to go about it," he says.

"In that first four weeks, I had more sleepless nights than I had in my life, where I just didn't get to bed because I was trying to do stuff.

"With the families, that was tough. I knew a lot of them. One of the wives I've known since she was 10 years old. Talking to them through that and through the media, trying to ensure it was dealt with sympathetically was hard. I made the decision that every time I had a couple of hours to sit and think, I'd get melancholy, so the best way to deal with it was to keep going."

Since the plane crash, Jones has been back to Africa three times and says the team, new and old, has not refused to fly to the project. "Nobody has stepped back. It is an amazing example of Australian tenacity, stoicism and bravery," he says.

Knowing Jones' background, it's not hard to see where he gets his bravery from and he has pushed and challenged himself out of a difficult childhood to become the success he is today.

"I got off to a very slow start and then joined the Australian army for six years and served in Vietnam and did a trade as a bulldozer mechanic," Jones says.

"I found that wasn't what I thought my talents best suited, so I started studying while I was in the army and after I left that I joined the ANZ bank and finished a commerce degree and while at the bank worked in financing mining projects."

At the age of 36, Jones started on his next venture, leaving the bank and setting up his own business advising mining companies on how to deal with banks and then after 15 years in that role, he took his own advice and started investing in mining companies. "My modus operandi is to invest in companies and then get in and help them make it work," he says.

Jones is well known for his time as chairman at Portman Mining, which he was instrumental in driving from a junior explorer to a successful iron ore producer. He dramatically split with his board to reject an offer in 2005 from Cleveland-Cliffs, which won Portman for $677 million.

"I said no to Cliffs' offer because I had a firm view there would be a jump in iron ore prices," he says.

"They paid $677m (at $3.85 a share) and then three years later paid $21.50 for the remaining shares they didn't own. Cliffs paid nearly as much for the remaining 14 per cent as it did for the initial 80 per cent."

With his ability to read the China growth story and success at Portman, it is no surprise Jones is often sought for advice from aspiring iron ore miners and he is more than happy to help develop the sector. "I never had a mentor and always wished I had someone I could go and talk to," Jones says.

While he clearly has a passion for mining and enjoys the challenges it brings, his greatest passion is his family -- his wife, four daughters and nine grandchildren.

He is involved in charity work, with Parkerville Children and Youth Care, where he spent some time as a child and the Ear Science Institute, whose director operated on Jones for his ear disease.

"I grew up in Parkerville, so, the two charities, I have a strong affinity with both of them," he says.

"I believe Parkerville put me on the right track. Other members of my family have not been as successful as me."

Jones is hoping to take a small break and enjoy a cruise now that he has Sundance on track to become a producer, but don't expect this mining veteran to be bowing out again soon. "I enjoy what I do. The sector has been good to me financially but I do it each day because I enjoy it."

 

[talktome]

Below is a link to an experienced chartist, which I am not.

Go there and look for at least three vids on his comments on SDL over the last 2 - 3 weeks.

talktome


http://www.youtube.com/user/haspete#p/u/5/-IShaTIxoBE


PS. The list of videos (Uploads) will be on the right. You may need to extend the list by clicking on `See All`.

 

[kash]

exciting part of the annual report on the ongoing drilling of mbarga.

So far this year, 21 diamond drill holes (predominantly PQ diameter) have been drilled at the Mbarga Deposit as part of the 2010 exploration program to:

A total of 1,415 metres has been drilled at Mbarga with selected core samples from these holes transported to Australia for metallurgical testing.

Where drill core has been available, Field Niton XRF analysis from drilling on EP92 in the 2010 exploration program has indicated the presence of significant intersections of high grade hematite which are comparable to previous results from the Mbarga Deposit.

Will be great to get an upgraded resource. Will keep the price strong.

 

[talktome]

Re: Latest announcement.

SDL now has a Chinese Investment Bank/Securities company, CITIC Secuities, on the case. What happened to Deutsche Bank?

I was under the belief that DB would be finalizing things.

Perhaps the SDL`s thoughts are that CITIC would be better dealing with SDL`s Chinese contacts?

Any thoughts?

talktome

 

[bleach8]

Re: Latest announcement.

SDL now has a Chinese Investment Bank/Securities company, CITIC Secuities, on the case. What happened to Deutsche Bank?

I was under the belief that DB would be finalizing things.

Perhaps the SDL`s thoughts are that CITIC would be better dealing with SDL`s Chinese contacts?

Any thoughts?

talktome

SDL appointed a Chinese Government owned investment bank to negotiate financial deal with Chinese Government owned Banks and steel companies….Citic will maximize Chinese companies’ interests rather than SDL’s.
DB was appointed by the previous Board to maximize SDL’s interest. IMO, GJ really wants to get it done fast..so be aware for bigger dilution

 

[LRG]

SDL has been pretty stable and lower volumes for the last few weeks.

I notice today there seems to be something going on.

The ASX is flat - but SDL is up 1.5 cents to 33 cents an volume has exceeded 40 Million so far.

Perhaps an announcement - or news of financial situation is getting around - speculation that something is due.

The timeline still says:

Nov - convention signing
Dec - finalise offtake contracts; secure project financing terms.

It is not too long to this target - hope they do deliver on it.
If so 33 cents will seem very cheap IMO.

 

[jonojpsg]

SDL has been pretty stable and lower volumes for the last few weeks.

I notice today there seems to be something going on.

The ASX is flat - but SDL is up 1.5 cents to 33 cents an volume has exceeded 40 Million so far.

Perhaps an announcement - or news of financial situation is getting around - speculation that something is due.

The timeline still says:

Nov - convention signing
Dec - finalise offtake contracts; secure project financing terms.

It is not too long to this target - hope they do deliver on it.
If so 33 cents will seem very cheap IMO.

Hey LRG,
I suggest if you look at the latest announcement that you'll see pretty strong indication that the finance/offtake stuff will most likely not happen until 1st qtr next year...all complete by March 2011...is the phrase I think was used. I reckon that is paving the way for them to get a bit more time on the negotiations for the finance/offtake.

Still, am expecting the Convention to be complete by years end so they can at least hold that up as getting there

 

[thestevo888]

SDL appointed a Chinese Government owned investment bank to negotiate financial deal with Chinese Government owned Banks and steel companies….Citic will maximize Chinese companies’ interests rather than SDL’s.
DB was appointed by the previous Board to maximize SDL’s interest. IMO, GJ really wants to get it done fast..so be aware for bigger dilution

Dilution? Last I heard a consolidation was well and truly on the cards- GJ as good as said so a few months ago...