LOCAL COMPANY RECOVERING FROM WEST AFRICAN AIR TRAGEDY
Sydney - Monday - September 13: (RWE Aust Business News)
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OVERVIEW
********
Ferret could see mileage in Sundance Resources, the African iron
ore explorer/producer, back in July at 12c when the market seemed to lose
confidence after most of its Board was killed in an air tragedy in the
Congo.
For a short time the shares were suspended until an interim Board
had been formed.
On their return, Sundance Resources's share price barely moved
from its suspension level.
The company believes it is significantly undervalued based on
market comparables.
On Friday, the shares hit 22c during the week and Ferret still
sees further merit in the stock.
Market interest was generated by the report mid week that
Sundance Resources had signed a memorandum of understanding involving the
Mbalam project with China Rail Africa through CRCC China-Africa
Construction Ltd.
The WA-based company announced had entered into a MOU to
establish the scope, cost and delivery program for the railway track and
rolling stock needed to support the Mbalam project in Cameroon and Congo.
The MOU commits the parties to work together to establish the
scope, cost and program for delivery of track and rolling stock
sufficient to support planned output of 35mtpa of iron ore from
Sundance's proposed Cameroon and Congo mines and MOU terms of EPC
contract under which CAC would deliver the mine rail project.
At the conclusion of that work the Parties may enter into a
Delivery Contract for the Mine Rail Project.
Neither party is bound to enter into the delivery contract if it
is not prudent to do so.
The MOU recognises that the mine rail project will be integral
with the mine project itself and the Lolabe Port Development project.
It also recognizes that the rail, mine and port projects are
subject to a range of conditions precedent including government
approvals, funding and title requirements for the rail corridor and other
assets.
Last month the company held its annual meeting headed by chairman
George Jones.
He was supported by Peter Canterbury, acting chief executive
officer, Michael Blakiston, Barry Eldridge, Fiona Harris and company
secretary Neil Hackett
"This is a meeting I deeply wish we did not have to have," the
chairman said.
"The tragic circumstances giving rise to this meeting are still
extremely hard to comprehend and very difficult and painful to accept.
"On 19 June 2010, an air crash in the Republic of Congo
tragically claimed the lives of all of the company's directors - the late
Geoff Wedlock, Don Lewis CEO, Craig Oliver, Ken Talbot and John Jones -
along with John Carr-Gregg, the company secretary.
"They were visiting Cameroon and Congo for one purpose - to build
a world class iron ore project," Mr Jones said.
"As a result, the company's largest shareholder - the Talbot
Group - has called this meeting to formally elect new directors to ensure
compliance with the Corporations Act and the company's Constitution as to
the minimum number of directors required to be appointed."
Mr Eldridge told the meeting it was very difficult to find the
words to convey the shock and sadness the company felt at the loss of so
many vital and talented people.
"Along with many other Australians and people around the world,
we have taken time to mourn those friends we have lost, but at the same
time, we all feel a deep resolve to continue their work and create an
enduring legacy that they would be proud of," he said.
SHARE PRICE MOVEMENTS
*********************
Shares of Sundance Resources slipped 2c to 20c on Friday after
strong support in the market. The company has 2.7 billion shares on issue
with a market cap of $541.9 million.
"It has been crucial for the Company, its shareholders and for
the memory of those we have lost that we have been able to rebuild
Sundance quickly into a position of strength," Mr Jones continued.
"I am pleased to report that your company is in very good shape.
"I am also pleased to report that your company is in a very
strong financial position and its business plans and strategy are in very
good shape," the chairman said.
Sundance retains a very solid balance sheet with over $70 million
of cash reserves as at the end of July, and no debt.
The project itself has very robust financials with a capital
payback period of under four years and an internal rate of return in
excess of 25%.
These numbers make the project returns extremely robust and
attractive to potential investors.
After a four-week suspension as a result of the accident,
drilling and exploration operations resumed as normal on July 21.
As previously announced, the company recently received
environmental approval for the project from the Cameroon government,
representing significant de-risking of the project.
The definitive feasibility study remains on schedule for
completion by the end of 2010.
Crucially the project continues to enjoy very strong support in
the region.
The chairman said that during a recent visit he and some Board
members undertook, it was apparent that the Congolese government
continues to show exceptional support for the project and the company.
"It has become very clear to me that the recent tragic events
have underlined and even strengthened the close relationship that exists
between Sundance and the Governments of the Republic of Congo and the
Republic of Cameroon.
"Between August 8-13, we travelled extensively to meet with a
number of steel mills, and rail and port construction companies to
progress discussions regarding sales contracts, potential joint venture
arrangements, and construction of project infrastructure," Mr Jones said.
BACKGROUND
**********
Sundance Resources Ltd joined the ASX list on December 9, 1993.
The company is an international iron ore company focused on
mining interests in the Republic of Cameroon and the Republic of Congo in
central west Africa.
The company began definitive feasibility study on the Mbalam iron
ore project as the basis for developing a global iron ore business.
Central west Africa is considered to have the potential to
develop into a significant new iron province, underpinned by the Mbalam
iron ore project.
Sundance is also traded on over-the-counter markets in Frankfurt,
Berlin, Hamburg, Stuttgart and Munich.
ENDS rx
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