market update, page-26

Hi baukaw.

Southern Cross Equities Limited. I reckon the guys investing in this stock are clearly of the view this is a $3-4 stock through time.

October 9th 2007. Report from March 16th 2007 Criterion - Robin Bromby.

It is cheap as chips if you put it up against Fortescue Metals Group,which is admittedly several years ahead. FMG is planning to start up with 45million tonnes,Sundance with 35million tonnes.

In fact,late last year a Broker's report from Perth-based RM Research made the connection between the two. It said that, should Sundance be successful in its exploration program and pre-feasibility study over the following 18 months, valuations approaching those of FMG should be possible. FMG was then worth about $2 billion.
Yesterday the gulf was wider: Sundance is capitalised at $110million while Andrew Forrest's Grand Design is capitalized at over $5 billion.

GMP Securities January 27th 2011.

Under a scenario of holding 45% of Mbarga and Nabeba DSO and 45% of Mbarga Itabirite,with a Discount rate of 12% -Multiple 12%. Our calculation yields a valuation of A$2,725m or A$0.97 per share. Note NO Valuation at the time for Nabeba Itabirite and NO 49% increase in Resource figure that came out this year 2012.

UBS Investment Research.August 12th 2011.

In this Report we have identified the iron ore takeovers attempted or completed on ASX over the past three years. Hanlong's indicative offer price implies an enterprise value for Sundance of A$1.18 per tonne of contained resource, a 47% discount to the average transaction multiple over the past three years. Iron Ore transactions activity outside the ASX also remains buoyant.
The Hanlong offer is priced at an average 57% discount to companies with offshore assets and 64% discount to companies with Australian assets.The A$0.50 per share values Sundance, on an implied EV/resource basis, at a 47% discount to the average multiple of $2.24.t over this period.

From J.P.Morgan.
Time to gain Chinese approvals in order to complete a deal averages 3.5 months,like in the case of Hanlong and Moly Mines (MOL), that deal took 5 months,partly because of running over the Chinese New Year period,sound familiar?

RM Research.

RM Research considers that Fortescue provides the most Direct comparison to Sundance.

Projected operating surplus/tonne of iron ore for Fortescue (A$32.0/tonne and Sundance (A$30.67/tonne) will benefit from economies of scale.
Sundance was working on an iron ore price of $57 at that time I believe.

Scoping study figures indicate that Mbalam (A$19.3/tonne) has the potential to be in the lowest cost quantile producers in the World and comparable to Fortescue (A$18.0/tonne).

Given the potential size of the Mbalam resource,the comparative data set out below suggests the potential valuation of Sundance (assuming successful outcome of exploration and the pre-feasibility study) indicate upside to valuation approaching Fortescue.

They show a comparison of FMG and SDL in stages/milestones.
Scoping Study FMG about $600 million and SDL at about $700 million.That was the stage SDL were at the time.
FMG from Pre-Feasibility at $600 million to Feasibility of $1.35 billion to Project Finance of close to $3 billion.

That is enough for now.Fasting for medical tests in the morning.

Regards
Westcott.