SDL 0.00% 0.6¢ sundance resources limited

I doubt very much there will be a share consolidation. The only...

  1. 1,194 Posts.
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    I doubt very much there will be a share consolidation. The only point would be if the company had a future!
    Have any sdl boosters looked at the iron ore price lately?
    Try adding current shipping rates to sdl proposed estimated cash cost and you will find the proposed business is a loss making exercise. In this reality it is meaningless if the railway and port eventually get constructed. The mine will not make any margin and therefore can not justify investment or repay any capital. Fairly simple concept and I'm surprised this isnt the subject of discussion.
    I do not consider it credible to consider that SDL will market iron ore products to Europe or North America. For a variety of reasons this is unrealistic. 70% of seaborne iron ore goes to China. Analyse the 30% source and supply and you quickly see there is no space in that market. In any case Vale pricing structure and product quality approach ensure that the price discount adjusts for the shipping rates differential to remove any arbitrage.
    Large scale West (and Central - if you wish to be a pedant) African iron ore production is a China centric story.
    Post AGM I expect the reality of the business case weaknes will now be revealed. With or without a EPCM announcement. In fact the EPCM announcement really just starts a clock on total destruction in value when the financing timeline expires and the Cameroonian government take back the licences.
    J9
 
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