A signed agreement 2+ months ago means nothing to Chinese. Maybe...

A signed agreement 2+ months ago means nothing to Chinese. Maybe time for BHP, Rio, FMG to play the same with iron ore pricing.

Hanlong takeover of Sundance moves closer with new pact

BY: RHIANNON HOYLE From: Dow Jones Newswires May 24, 2012 11:56AM

Source: Bloomberg
SUNDANCE Resources said it has signed a revised agreement with China's Sichuan Hanlong Group, taking it one step closer to finalising Hanlong's proposed $1.7 billion takeover of the iron-ore explorer.

Sundance, which owns the Mbalam iron ore project on the border of the Republic of Cameroon and the Republic of Congo, said the parties have "simplified" the timetable for the deal, which it hopes will now be completed in November.

Sundance's shares rose on the news and were recently trading up 7.5 per cent at 43 cents a share, compared with a 0.2 per cent rise in the ASX 200.

Sundance's Mbalam project aims to mine 35 million tonnes of iron ore annually, making it an attractive prospect to reduce China's dependence on Australia for the key raw materials used in steelmaking.

However, the project has faced many hurdles, including securing appropriate approvals and lining up funding from China Development Bank, Hanlong's financiers. There is also an investigation by the Australian Securities and Investments Commission into alleged insider trading among former Hanlong executives, although Sundance today reiterated that it has been told this "focuses on individuals" and not on the group.

"This revised agreement...reflects the substantial progress made in discussions in recent weeks, the strong desire of all the parties to finalise the (scheme implementation agreement) and their resolve to do it as efficiently as possible," Sundance Resources chairman George Jones said in a statement to the Australian stock exchange.

Hanlong in July 2011 put in an offer for Sundance at 57c cash per share, which the company's directors unanimously recommended. Hanlong already owns 18.6 per cent of Sundance.

However, Sundance has been in protracted negotiations with the Cameroon government to obtain an exploitation permit to start extracting iron ore.

The company said today that, under the revised agreement, the terms of the deal will be signed off by the Cameroon's head of government, after Hanlong waived the requirement that it be ratified by the Cameroon National Assembly.