Just thought Id post the full sonray report (with permission of course) for anyone interested - not too much research round on this one
STOCK UPDATE Sundance Resources SDL $0.25 The Company Sundance Resources Ltd is an Australian exploration company focused on mining interests in the Republic of Cameroon on the central west coast of Africa. Sundance has commenced a pre-feasibility study on its 90%-owned Mbalam Iron Ore Project in Cameroon as the basis for developing a substantial international iron ore business. THE MBALAM IRON ORE PROJECT -CAMEROON: Is estimated to contain initial mineralisation in excess of 800 million tonnes with inferred resource of 218 million tonnes grading greater than 60% Fe. Recent aeromagnetic surveying identified more than 35km of highly prospective itabirite iron formation in the Mbalam region, underpinning Sundance’s commitment to its pre-feasibility study on the project. Issued Shares : 1,620,331,908 Market Cap : $388,879,600 Approximately $27 million in cash Sundance Resources has recently gained some market profile as they enter into a most exciting phase of the company life. Sundance is about to embark on a company changing drilling campaign in Cameroon, West Africa, that has the potential to see this company evolve into a major Iron Ore producer. The company will start a major drilling schedule at the end of this month that will continue through to the end of the year. The objective is to firm up a reserve base of at least 1 billion tonnes of high grade Haematite Ore by the end of 2008.
The Project The Mbalam Iron Ore Project was first drilled and measured by the United Nations Development Fund “UNDF” between 1976 and 1984 in conjunction with French and Canadian geological organisations. This survey outlined over 800 million tonnes of mineralization and 200 million tonnes of high grade ore. Management believes the surface has only just been scratched and the objective will be met by the end of 2008. This is a big project and will take a lot of work. The UNDF study estimated a cost of US$2.5 billion for the development of mine, rail and port infrastructure required to operate the project. The scale of the project is the key to the very attractive project economics and is based on a cash operation cost of US$14.50 per tonne based on throughput of 35 million tonnes per annum. This is a comparable operation to Fortescue Metals ( which today , without having produced any iron ore yet) , is a $9.0 billion company.
The People Recent management changes are giving the market some confidence that this project is achievable. The new Chairman, George Jones was Executive Chairman of Portman Mining and developed the company from a small operation to a $600 million company. His contacts with Chinese Iron Ore companies is a key to the essential relationships in to mainland Asia that will unlock the potential of this company. He will be assisted by Dr John Saunders who has broad experience in infrastructure development and financing. Don Lewis, the MD has extensive experience in project development and engineering in African projects. Others in the senior management team hold extensive African minerals and mining experience and the management team and board are extremely capable of bringing on stream a major project such as this.
The Place Cameroon has a great soccer team. It has had the same Presidential and political leadership for over 20 years. It is generally regarded as one of the most stable countries in Africa and this extends to its legal and financial systems which are based on French civil systems. Today (Friday 25th May) a new extension to the Mbalam Exploration Permit opens up more potential for continued successful exploration along the existing resource body.
The Task It is a big one and includes some big financial injections. Pre-Feasibility, Feasibility etc. The first step will be pre-feasibility but once drilling results start to confirm what management is expecting then we can expect Off-take agreements and funding arrangements to help progress the companies development. The relationships with previous Chinese end users will prove beneficial as the Asian demand for Iron Ore continues for decades to come.
The Potential Well this is the interesting part and it was alluded to in the Stock Exchange Announcement today released by Sundance announcing the extension to the Mbalam Project. “… The objective of this program in 2007 is to delineate a JORC compliant resource at Mbarga and confirm the potential of the Mbalam Project permit area to support a +1.0 Billion tonne high grade haematite resource…” The comparison is with Fortescue Metals which has a reserve base of 1.3 billion tonnes Iron Ore and has a market cap of $9.0 billion. Several years ago when FMG was trading at $0.60 there who would have thought it would be trading today at $33.00. Mr Forrest of course has held his stock all this way.
Reprinted with permission Australian Equities Report Friday, 25 May 2007 | Peter Taylor – Equities Sales, Trading & Account Management
SDL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
