what is driving this, page-31

Sundance shoots up on possible rumours

"rumours surfaced today on mining internet forums"

Rebecca Lawson
Thursday, 13 September 2007

SUNDANCE Resources has beaten the Australian Securities Exchange to a speeding ticket, giving its own explanation of why its share price has climbed to a 12-month high - on nearly seven times BHP Billiton's traded volume.

Shares in the iron ore play reached an intraday high of 66c before closing at 64c – a gain of 11c or 20.8% – with over 71 million shares traded, compared to an average of 5-7 million shares.

Sundance experienced a spike in the volume of its traded shares yesterday – just over 23 million shares exchanged hands – following an announcement the company had completed a share placement.

However rumours surfaced today on mining internet forums that Sundance was possibly doing a joint venture deal with Gindalbie Metals or a Chinese company, and may have prompted the iron ore play to issue a release explaining its share price movement and volume on no news.

In a statement, Sundance explained it was aware of a "detailed internal commentary" by Australian broker Southern Cross Equities that presented a "very positive assessment" of the international iron ore industry and the potential of its Mbalam project in Cameroon.

Sundance also said it was aware of another major international broker preparing a research report on the company following a recent site visit to Mbalam.

"The company believes that the preparation of the broker commentary, combined with recent presentations and site visits by brokers and strategic investors in the company, may be responsible for the increase in the company's share price over the past day," Sundance said.

Rumours of a JV deal with Gindalbie could prove to be fruitless, with the company's share price dropping 4c (2.4%) to $1.64.

Meanwhile resource stocks in general were mixed following largely neutral offshore leads, with base metals waiting for some direction as the United States prepares to release more economic data on Friday, including August's retail sales and consumer sentiment.

The spot and three-month price of lead was the best performer out of the base and precious metals on continuing supply issues at Magellan Metals' Wiluna mine in Western Australia.

The metal's spot price last traded on the London Metal Exchange at $US3065.50 per tonne, a 1.5% increase, while its three-month delivery was up 1.7% to $3080/t.

However the news did nothing to excite Zinifex and Perilya which mine the metal as a by-product in their operations, with the former adding A11c (0.7%) to $15.79 and Perilya unchanged at $3.65.

Overall the top three movers for the day were Elemental Minerals, up 5c (26.3%) to 24c; Intrepid Mines added 6.4c (24.5%) to 33c and Uran firmed 5c (21.3%) to 28.5c.

On the other side of the spectrum Highlands shed 3c (18.8%) to 13c on the back of its interim report. In the six months to June 30, 2007, the company made a total loss of $US114 million ($A135.7 million).