THE board of Sundance Resources has recommended a takeover bid from Chinese-based investor Hanlong Mining to its shareholders after the all-cash bid was improved from 50 to 57 cents per share.
There was unanimous support for the $1.65 billion takeover, with shareholders expected to vote on the proposal in April next year.
If approved, the deal would be completed in May 2012. Sundance chairman George Jones said in statement that the deal would provid a large part of the estimated US$4.68 billion needed to construct the Central West Africa Mbalam iron ore mine infrastructure.
“Hanlong’s offer means that the substantial financial support needed for this integrated port, rail and mine project will now be available,” he said. Sundance is focussed on developing its flagship Mbalam project, which spans the Republics of Cameroon and the Congo, and will generate around 35 million tonnes of iron ore each year when production begins in late 2014. Development will include the
construction of a new deepwater port for export of the ore and a heavy haulage railway connecting Mbalam to the port.
This infrastructure will be integral in opening up what Sundance referred to in a statement as “the world’s next great iron ore province of which Mbalam will be the cornerstone”.
A recent announcement by the company said that Mbalam contained high-grade hematite resources of 521.7mt at 60.7 per cent iron, and a further 2.3 billion tonnes of itabirite hematite resources at
38 per cent iron.
The scheme is conditional on approvals from the governments of the Congo, Cameroon and China, as well as the Australian Foreign Investment Review Board.
Hanlong took an 18 per cent stake in Sundance in March 2011. That interest in Sundance was previously held by coal mining billionaire Ken Talbot, who died in a plane crash, along with the rest of the Sundance board, while en route to the Mbalam project last year.
By Reuben Adams