Hanlong has been struggling to finalise the deal, which was launched two years ago, with the latest setback the detention of Hanlong chairman Liu Han by Beijing police.
Reports from China over the weekend quoted a two-sentence statement issued by the Police Ministry issued on Friday that said Mr Liu was under investigation for harbouring a fugitive and other unspecified ``serious offences''. It announced the capture of his brother, a ``major murder suspect'', but gave no other details.
Hanlong has been attempting to secure a credit-approved term sheet from its financiers, China Development Bank and China Everbright Bank. If it fails to do so by today's deadline, its ability to complete the transaction will again be questioned. The deal allows Sundance or Hanlong to terminate the deal five days after today's deadline is missed, following ``good faith consultation''.
Sundance is said to be working on an alternative plan and the board believes its $5bn Mbalam iron ore project on the border of the Republic of Congo and Cameroon, will be backed by Chinese interests.
Sundance said last week, after its board met on Friday to discuss the latest setback, that it would continue talks with Hanlong and the National Development and Reform Commission. This suggests the Australian junior hopes to find a new Chinese suitor should the Hanlong deal be officially terminated.
Chinese President Xi Jinping will visit Congo this week, confirming China's long-term commitment to Africa, which has become its largest trading partner.
China could be looking at the Sundance deal as a regional play.
Core Mining's Avima project is next to the Mbalam operation, and Socrates Vasiliades, the Melbourne-born former commodities trader who owns Core, hopes to secure Chinese funding for his project.
Core has struck deals with Glencore and Russian steelmaker Severstal to give them both a stake in the company, and has a memorandum of understanding with Sundance to consider developing shared infrastructure. Sundance last traded at 21c, well below Hanlong's proposed offer price of 45c.
News Ltd.
SDL Price at posting:
21.0¢ Sentiment: Buy Disclosure: Not Held
