CHINESE parties are finalising due diligence on Sundance Resources, with an announcement expected soon on the junior's new strategic partner to help develop its West African iron ore project.
Sundance had previously flagged it would announce a project partner by the end of this month, but the delay did not concern the market, with the junior's shares closing 3.17 per cent higher yesterday at 32c.
The impending announcement of a new partner that will see the project start construction by the end of this year comes just over a year after Sundance lost its entire board in a plane crash, when the team was visiting the Mbalam iron ore project on the border of Cameroon and the Republic of Congo.
Chairman George Jones, who was in Africa last week talking to potential partners and government officials, said there was serious interest in the project and it was now trying to finalise a partner.
Start of sidebar. Skip to end of sidebar. Related Coverage
* Sundance in partnership talks Adelaide Now, 8 hours ago * Sundance up after quelling takeover talk Perth Now, 30 May 2011 * Sundance down 5pc on share placement Perth Now, 27 Apr 2011 * Sundance reveals $60m raising Perth Now, 27 Apr 2011 * Sundance Resources seeks more cash Perth Now, 21 Apr 2011
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The Mbalam iron ore project in West Africa has an estimated $4.7 billion capital cost, with most of the funds needed to build a 500km railway line and a deepwater port.
"Like the Pilbara (in Western Australia), there are numerous large-scale iron ore deposits in this West African region," Mr Jones said.
"But without the key transport infrastructure in place for export, the potential of the area remains untapped.
"This is a classic case of first-mover advantage. And the Chinese recognise this. They have the appetite, the vision and the balance sheet to carry out these types of developments."
The company said in an announcement yesterday that potential partners and a number of Chinese banking institutions recently visited Sundance's operations to finalise due diligence.
"Visits to the proposed mine sites, rail corridor and port site were undertaken," the company statement said.
"Follow-up discussions between Sundance's technical teams and a number of the prospective strategic partners have also been held in China and in Africa over the past few months.
"The governments involved have shown strong support and are eager for the completion of talks so that construction may commence as soon as possible."
Sundance says it has short-listed the preferred potential partners and has entered into commercial negotiations. It says it will advise the market as soon as something sufficiently binding or capable of announcement is available.
It also aims to begin construction of the rail and port infrastructure before the end of 2011.
SDL Price at posting:
32.5¢ Sentiment: None Disclosure: Not Held
