strategic partner interest - high vs low

The key to SDL not only obtaining funding, but getting a good deal all depends on the level of interest from possible strategic partners.

Although SDL have stated that they have narrowed it down to three Chinese Steel Mills, it is difficult to know who has the upper hand. It has to be either:

A) The three Chinese Steel Mills all jumping over themselves to be involved.

or

B) The Chinese Steel Mills expressed some interest but SDL is trying desperatly to convince one of them to sign up.

If it is A, then SDL holds the upper hand, but if it is B) then we could be in a spot of bother.

Below are arguments supporting both cases

Case A - High Interest

- China is sick of being held to ransom by the big boys
- China is looking for its own resources
- SDL has high grade / low cost ore
- China has a good relationship with Cameroon
- There is already Chinese interest involved through Port, Rail and Hanlong.
- Iron ore prices look to remain high in the short term
- China needs iron ore and lots of it
- SDL presents an oppurtunity to be the first mover in a new iron ore province.
- If someone else like RIO or BHP grabs it, then China will be held even more to ransom.
-

Case B - Low Interest

- Since the GFC companies are a lot tighter with money
- There is a high risk involved, ie Africa, 500km rail
- BHP and RIO don't appear to have expressed any interest in the project. If the project was that good, you would have thought that they would have expressed some interest, even if it was only to make sure that China don't get it too cheap.
- SDL have been trying to secure a strategic partner for years but still remains unsuccessful.
- China need Iron Ore now, but SDL is still 4 years off delivering.
- Low volume and a stagnant share price doesn't really suggest that they are close to signing a deal, let alone a good one.

Interesting to get everyone's thoughts.