SDL 0.00% 0.6¢ sundance resources limited

fairness of sdl bid

  1. 2,000 Posts.
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    The Hanlong bid values Sundance's ore in the ground at $1.20 per tonne, when the resources are converted to 100% Fe. Coincidentally, this is about what most iron resources go for, although some much lower (Sojitz' buy into Granges Southdown being one) and some much higher (MCCM's buy into Ironclad's Wilcherry hitting over $4/t). The relative merits of each deposit comes into play here: the Sundance resources need a very high capaital intensity of over $200/tonne as they have to build a railway, a port, and they're in the middel of the jungle (no infrastructure, like power, available). Of course, in spite of the current dismissal of sovereign risk, Cameroon and the Congo are certainly not considered low risk.

    Hanlong have done their Due Diligence well and, unless another bidder comes along, is likely to succeed at "around" this bid value. Another bidder is unlikely, but not impossible, given Hanlong's 18.6% holding already.
    It ain't over till the thin-challenged woman sings, but on paper people dreaming of a bid way in excess of 50c really are dreaming. Still, some dreams do come true.....

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