SDL 0.00% 0.6¢ sundance resources limited


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    Sundance reports 2.2bln tonne resource at Mbarga
    Tuesday , 04 Nov 2008

    International iron ore company Sundance Resources Limited (ASX: SDL - "Sundance") is pleased to announce a very positive update on exploration and development activities at its 90%-owned Mbalam Iron Ore Project in Cameroon, West Africa.

    The JORC-Code compliant Inferred Mineral Resource inventory of itabirite hematite at the Mbarga Deposit has been increased by 25% to 2.2 billion tonnes at 40% Fe. This inventory of itabirite hematite is summarised in Table 1 and is based on assay data received from a total of 255 drill holes, including 23 diamond core holes, for a total of 56,459 metres drilled (refer Figure 1).

    Table 1: Inferred Mineral Resource inventory of itabirite hematite at Mbarga Deposit

    Sundance has now achieved its overall itabirite Exploration Target of 2.0 to 2.5 billion tonnes over Exploration Permit 92, solely from the Mbarga Deposit. Significantly, the itabirite resource includes over 1.0 billion tonnes at 44% Fe. This will have significant positive implications for mining and beneficiation costs.

    The Company has defined JORC-Code compliant Inferred Resources totalling 2.45 billion tonnes of itabirite and DSO quality hematite (including the previously announced Inferred Mineral Resource of 223 million tonnes of DSO quality hematite). Mbarga is clearly a very large deposit and compares favourably in terms of scale and quality of iron ore mineralisation with the world class itabirite resources of the Minas Gerais region of Brazil operated by Vale, BHP Billiton and Anglo American / MMX.

    Mbarga Deposit alone contains sufficient itabirite and DSO resources to underpin over +20 years of mine operations with the broader Mbalam Project area (including EP92 and EP143 in Cameroon and EP 2007-362 and EP2007-363 in the Republic of Congo) offering significant potential to expand this resource base (refer Figure 2).

    Broader exploration will continue to target additional DSO resource potential at Metzimevin and other prospects on EP92. Mobilisation for aeromagnetic surveys over EP143 and the two Congo exploration permits has commenced, with this work to be completed in the December 2008 Quarter. The results of the aeromagnetic surveys will be used to prioritise further exploration targets.

    Having established a world scale resource, the Company is now focusing on negotiations with strategic off-take and financing partners. The Company has invited selected international parties to participate in this process with discussions advancing over the past month. This has confirmed that the itabirite mineralisation at Mbalam is regarded by potential off-take partners as a key value driver for the Mbalam Project given the potential longevity and quality of supply of itabirite concentrate.

    In parallel, the Company has reduced drilling expenditure given that its itabirite exploration target has now been achieved. Three drilling rigs ceased operations as at end of October 2008 with resource definition drilling to continue using the three larger rigs on site. These rigs will initially focus on in-fill drilling at the Mbarga Deposit to increase geological confidence and convert Inferred Resource to Indicated and Measured status. This will result in significant cost savings and ensures prudent management of the Company's cash resources. Sundance had cash reserves of $32.7 million as at 30 September 2008.

    Commenting on the announcement, Sundance's Managing Director, Mr Don Lewis, said: "We have very rapidly achieved our key resource target and confirmed Mbalam as a world-scale iron ore project. The Inferred Resource base at Mbarga is sufficient to support production at 35 million tonnes per annum for at least 20 years of mine operations with potential to increase both the scale and life of production. Mbalam is now firmly established as a major potential iron ore producer with a number of potential off-take and financing parties."

    "Interest from a number of international steel mills and potential off-take partners has been high. These parties recognise that the Mbalam Project is a potential long-term source of high-quality iron ore products and they have already provided valuable feedback on the development strategy for the Project. Our view is that these strategic off-takers will continue to support the development of new independent producers to ensure diversity of future supply from major, new projects."

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