Sundance Resources Limited (“Sundance”, “Company”) is...

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.