A $1.3 billion takeover of Sundance Resources has fallen through after China’s Hanlong Mining struggled to finance the deal.
Africa-focussed Sundance ended the talks following a string of problems; its first warning came when Hanlong failed to provide it second round of $5 million funding within the required time frame.
“Sundance has decided to terminate the scheme implementation agreement because the funding condition was not met and after being informed by Hanlong that it was unlikely to meet the other required conditions,” Sundance stated.
Executives from Hanlong had previously been accused of insider trading, market manipulation and tax allegations and the company’s chairman Liu Han was recently detained in prison after suspicions of harbouring a fugitive.
Sundance announced it was now in discussions with other companies to develop its Mbalam-Nabeba iron ore project in Cameroon, Africa.
The project is forecast to cost $5 billion to build and is estimated to contain 436.3 million tonnes of ore grading 62.6 per cent iron. Mbalam-Nabeba also contains 775.4mt of high-grade hematite and more than 4 billion tonnes of itabirite.
Sundance chairman George Jones said the company was looking past the fallen deal to the Mbalam-Nabeba project.
“Sundance believes that it continues to receive support from the governments of Cameroon and the Republic of Congo and from China for this project,” he said.
“Sundance is engaging with other potential Chinese strategic partners with a view to developing the project. At the same time we will also progress discussions with non-Chinese parties.” The announcement saw shares in Sundance fall by nearly 50 per cent, taking $307.2 million off the company’s market value.