SDL 0.00% 0.6¢ sundance resources limited

sundance fires on $1.4bn hanlong bid

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    CHINA'S $1.4 billion move on Africa-focused Sundance Resources has sent the target's shares soaring, as the iron ore junior argues the proposal undervalues the company.

    Sundance announced today that Hanlong Mining Investment had advised it last Friday evening that it intended to make a 50-cents-a-share offer for the emerging miner.

    Shares in Sundance jumped as high as 28 per cent today as the stock traded hands above the offer price. Sundance stock had pulled back slightly by early afternoon and was 20 per cent higher at 48c.

    Chairman George Jones said the board considered that the terms of the offer did not provide adequate value or certainty to Sundance shareholders.

    But the company said it would engage in discussions with Hanlong, which has an 18.6 per cent stake in the target, about the terms of its proposal.

    Mr Jones said: "At the same time, Sundance will continue to progress its advanced negotiations with potential strategic partners in respect to possible joint-venture, financing and offtake arrangements to develop its Mbalam iron ore project in the Republics of Cameroon and Congo.

    "The company has the vision, passion and technical expertise to develop the Mbalam Project, which will produce 35 million tonnes per annum of high-grade hematite."

    Foster Stockbroking said that, with Australian projects facing headwinds recently, West Africa presented investors with a new and attractive landscape for iron ore plays.

    "The Hanlong offer highlights the strategic value of quality assets in West Africa to the Chinese" the analysts said.

    Hanlong managing director Xiao Hui said he looked forward to further discussions on Hanlong's proposal with Sundance, to move ahead on the proposed transaction.

    Hanlong said the offer price was a 25 per cent premium to Sundance's closing price on Friday.

    The Chinese group has been active in Australia and last week made a $145 million bid for uranium hopeful Bannerman Resources, which the target has opposed.

    Hanlong also has a 59 per cent stake in Australia's Moly Mines, which is developing the Spinifex Ridge molybdenum project in Western Australia.

    The $1.4bn bid highlights the remarkable journey Sundance Resources has been through since it lost its entire board in a plane crash more than a year ago, when the team was visiting the Mbalam iron ore project on the border of Cameroon and the Republic of Congo.

    Sundance has targeted the end of this year to begin construction on the project, and had flagged late last month that Chinese parties were finalising due diligence on the junior.

    The miner further said it was hoping to shortly announce a strategic partner to help develop its iron ore project.

    Sundance, which has advised its shareholders to take no action, said that since Hanlong acquired its stake in the company, the two parties had developed a strong stakeholder relationship.
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