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Sundance Resources and Hanlong Mining are expected to meet in Hong Kong tomorrow to thrash out a deal, with sources indicating Hanlong is prepared to budge “a few cents” from its 45¢ offer but is waiting to see if Sundance capitulates first.

Market sources said Hanlong’s chairman, Liu Han, had apparently taken ill with a nasty bout of food poisoning, delaying negotiations last week.

But others raised suspicions that the untimely illness was more a stalling tactic invoked by Hanlong’s advisers at Merrill Lynch.

One investor said that reports saying that Hanlong could just wait until the deadline for signing a term sheet for financing with the China Development Bank by August 31 and allow the deal to collapse failed to acknowledge that Hanlong is bound by the scheme implementation agreement to work “in good faith” and use its “best efforts” to work with Sundance until conditions are fulfilled.

There is growing speculation that a counter-bidder is waiting in the wings but is unlikely to move on Sundance until it signs a deal with Hanlong or the deal falls apart.