west australian

Business
Relief all around as Congo approves Sundance’s iron plan
Nick Evans
377 words
1 January 2013
The West Australian
TWAU
First
19
English
(c) 2013, West Australian Newspapers Limited
Sundance Resources shares jumped 16 per cent after the company said it had received the final regulatory approval for construction of its Mbalam iron ore project in West Africa.

The company said yesterday the Republic of Congo had issued a mining permit for the Nabeba deposit. Sundance received approval for the Cameroon side of the Mbalam project in late November. Receipt of the mining permit clears the way for Hanlong Mining to close out its long-running takeover for Sundance, or for the emergence of a counteroffer for the Australian-listed company.

Sundance chairman George Jones yesterday would not comment on speculation a rival offer may be lodged before the February 1 shareholder vote to approve the Hanlong offer but said the Congo decision “was a huge step forward”. “This is the one thing I was worried about most along the way,” he said. “I knew we’d get it eventually but the time that it’s taken has been a worry.”

Sundance shares jumped 5¢ to 37¢. They remain well below Hanlong’s 45¢ offer price but return the price to levels the shares were trading at in late November. That was when the China Development Bank slowed progress on the takeover by indicating it wanted to review Sundance’s agreements with the Cameroon and Congo governments before extending acquisition finance to Hanlong.

Mr Jones said he understood the CDB had finished its review of the Cameroon agreement, and there was nothing to stand in the way of Hanlong meeting the revised acquisition timetable.

Media reports from China last week indicated Hanlong was seeking partnerships with Chinese state-owned enterprises to help build the $4.7 billion Mbalam project, but Mr Jones said that was expected. “It’s too big for them to develop the whole thing on their own,” Mr Jones said.

“They’ve always intended to acquire Sundance and then partner it. They want to partner with China Rail and China Harbour, and they want a big steel mill involved.

“And I think the authorities — the NDRC and their bankers — have always wanted the comfort of knowing they have a substantial partner to run with and we’ve always understood that.”

West Australian