new broker report, page-4

Sundance Resources Limited (“Sundance”, “Company”) is progressing its
large Mbalam iron ore project in the Republic of Cameroon, on the central
west coast of Africa. The Company is currently undertaking a definitive
feasibility study into the development of the project, which is due to be
completed by mid 2009. Sundance plans to produce a lump and fine
direct shipping ore product from an enriched hematite ore at surface in
2012, before moving to a hematite concentrate product in 2019 produced
from itabirite ore as the direct shipping ore resource is exhausted.
The project has the potential to generate large cash flows of
~US$1,000m per annum from the enriched direct shipping hematite ore
and ~US$500m per annum from the itabirite ore. However, it is not
without its risks, which include defining sufficient ore reserves; large
infrastructure requirements including construction of a port and ~500km
of railway; unknowns relating to the final fiscal regime; as well as
perceptions of sovereign and political risk. Sundance is currently trading
at a substantial discount to our conservative valuation of 52cps, and as
the Company continues to de-risk the project, we expect it to be re-rated,
leading to significant share price appreciation. We rate Sundance
Resources Ltd as a Speculative Buy.