Hi all,The doubting hit a fever pitch today but I still think...

Hi all,

The doubting hit a fever pitch today but I still think long term holders have made a sound decision here. While the uncertainty surrounding Hanlong is causing many holders anxiety I still can't fault their tactic. They have put themselves in a very strong position to maximise their own return. They stumped up significant coin to take a powerful stake and now are exercising the control that they bought. Regardless of the outcome here I will be keeping a very close eye on their future moves in the hope that some opportunities to "piggy-back" might eventuate.

Now some of the rhetoric that Hanlong have been quoted on recently is puzzling. They almost market themselves as the saviour of Chinese money being lost to the "Big3", yet they are not State owned. I am unable to rationalise how a private group with global interests is different to the Big3. Granted, the Chinese govt are supportive of local interests that are able to reduce the level of imports, but will Hanlong guarantee to sell the ore only to Chinese customers and at a significant discount to spot prices? Are the Chinese govt able to incentivise private interests in such a way to make that worthwhile for Mr Han? If so would the Aust govt need to reassess FIRB guidelines for "private" Chinese interests and treat them the same as State owned? Mr Han was himself quoted today as saying that current Aust law cannot prevent his takeover. Was that meant to be a not-so-subtle wake up call?

Also, the line that Hanlong believe the Sundance ore bodies are capable of supplying 200MTPA keeps sticking in my mind. Even if you acknowledge that ramping up a greenfields site to be able to produce such a volume would take many years from the start of successful operations -at spot prices that is in excess of $30B in annual revenue. Even at long term prices it is circa $13B. Surely Mr Kloppers and Mr Walsh would have had their respective assistants pouring over these numbers this morning. So why would Hanlong tout these numbers at this point in time? I can"t understand what they have to gain if they want their bid to succeed. It struck me more like a red rag to a bull. As an existing shareholder would you vote in favour of a "low-ball" takeover scheme of arrangement, when even the bidder is saying the already impressive financial projections could rise by a factor of 5+? Maybe some sharper minds than my own can shed some light? Yowie, I would genuinely be interested if you have a theory on that one?
Mr Casello's urgent trip to Cameroon remains mysterious. Ratification of the convention would, I expect, be met by the entire board. Issuance of the mining permit however may be accepted by the MD only. Or is this a changing of the guard that signifies Mr Jones' confidence in and respect for Mr Casello? Would be a nice gesture if it is and Mr Jones has been very open about his plans to step back and be less involved "when the time is right". I also find myself reflecting on Mr Casello joining SDL last year. In light of the news re: SINOSTEEL putting their mid-west project on hold, you may speculate that was a major factor in Mr Casello looking to join SDL when he did. But taking it a step further: were there already close discussions happening between the 2 companies that forged a relationship between our Chairman and MD? If so maybe SINODANCE is still a possible joint venture outcome?
I guess what I'm thinking is that the time to panic is not upon us (not yet anyway). Some very experienced tacticians are working their trade at the moment and our board are NOT out of their depth. The quote from Mr Jones that the board is not against a takeover in principle provided the price is right and the conditions are dropped, was reassuring. Had he turned around and said that Hanlong needed to double their bid price to get a serious look, then I would have panicked!

The take away for me today is that we have unofficially advised the market that Mbalam output could go as high as 200MTPA, our board are open minded to realistic co-operation discussions, and our MD is on such an urgent Cameroon excursion that he could not present as planned at Australia's biggest annual mining conference. I'm comfortable sleeping on my holdings tonight.

Best wishes all holders,
Sth.