London-based Renaissance Capital is confident Hanlong Mining will succeed in its bid for Sundance Resources.
Sundance shares were placed in a trading halt on Friday as the company waived the requirement for Hanlong to produce a “highly confident” letter from a financier.
Under the scheme implementation agreement entered into last month, Hanlong and Sundance indicated a “highly confident letter” from China Development Bank regarding the provision of acquisition funding was expected to have been completed on Monday.
Sundance shares fell 5.9 per cent to 40¢ in early Monday trade.
After speaking to Sundance, Renaissance said it understood the main reasons the letter was not forthcoming was China Development Bank had not visited the project site nor met with government officials since the transaction was announced on October 2011.
A site visit is, however, planned to Mbalam within the next two weeks which will allow for meetings with the authorities in Cameroon.
Although the condition has been waived, Renaissance said the China Development Bank could be in a position to provide the highly confident letter after its visit to Cameroon, perhaps later in November.
Assuming the deal proceeds at Hanlong’s 57¢ offer price, Sundance shares offer a 40 per cent return over the next five months.
