Good post Matt.The way I see it, 22 months after I was last a...

Good post Matt.

The way I see it, 22 months after I was last a holder, I have got another chance to buy at a similar level to when I first bought that parcel.

That is disasterous for those that have held the journey but I now am prepared to take the risk, again.

Back then, coming out of the GFC it was a simple MOU with China Rail that got the ball rolling. Any ann. from left field can now turn the tide, imo, especially after we saw 2 large volume periods of negative SP returns, Apr-JUN,. (signs of strength) and pretty low volumes since then.

Yes there is risk now, but, imo, no more than there was then, in fact there is probably less.

Back then there was no DFS with NPV $4billion(more now), no take over offer that initially valued SDL at$1.4b,no Mbalam convention or Congo approvals, not even enough DSO in measured category to support 10 year mine life, plus, almost the entire board tragically killed in plane crash.(RIP)

It's all been said before and gone over a thousand times but is there really more risk then there was back then?

A little passage from after the DFS release:

Fortescue’s Cloudbreak mine(2009)
Production: 38mt
Grades: 57-61%
Cost per tonne: $US 26.6

Aquila West Pilbra iron ore project
Production (2014): 30mt
Grades: 56%-62%
Cost per tonne: $US 19.48

Sundance Mbalam project
Production(2014): 35mt
Grades: 63.6%
Cost per tonne: $US 21.2

The Net Present Value of the Mbalam project is calculated using iron ore prices of $US 105dmtu. The price applied to the NPV equation seems conservative, in the long term Iron ore prices are expected to increase substantially which would lead to higher a higher margin and higher cash flows assuming costs are kept the same. Sundance have investigated various opportunities to reduce capital expenditure.

There is no hiding the capex for Mbalam is large, realistically given the size and quality of the resource the project it was always going to require large capital investment, world class projects are not cheap . Once again a case study of Fortescue in its early stages may be appropriate. Fortescue struggled to find support from Australian institutions and investors who also questioned the large capex of their Pibara operations, which are now one of the biggest on a global scale. Sundance looks set to follow in the same footsteps as Fortescue by securing investment from Asian institutions to fund development and expansion.

There is still “political risk” associated with the Mbalam given the Congo government has not yet provided approval for the project , although the likelihood of the Congo government rejecting what would be a significant boost for their economy is unlikely. The market is likely to remain cautious on Sundance until financing and government approvals has been announced. There is expected to be updates on both finance and government approvals through the rest of year.

The outlook for the project overall is still positive, the market tends to have a short term focus which provides an opportunity for long term investors. The facts still remain:

China are looking for iron ore suppliers outside of Australia and Brazil
Growth in African resources
Long term outlook for iron ore is bullish
Substantial margin

Good luck all.