Friday, 30 November 2012 14:58
Hanlong Mining's proposed takeover of Sundance Resources could be completed by Christmas after turmoil on financial markets forced the Sundance board to curb its price and timetable for the transaction.
Sundance on Friday signed an agreement which it said paves the way for development of the company's Mbalam iron ore project in Cameroon.
The company said the Mbalam deal would lead to issuing of a mining permit and commencement of construction which brings the company a step closer to a Scheme Implementation Agreement (SIA) with Hanlong.
"No one needs reminding that the Hanlong transaction has taken longer than we initially envisaged," Sundance chairman George Jones said in a statement delivered on his behalf at the company's annual general meeting (AGM) in Perth on Friday.
"It has undeniably been one of the more challenging deals I have executed in nearly 40 years as a banker and director of public companies."
Mr Jones said a year ago he expected to "enjoy Christmas" as the Hanlong transaction neared completion.
"Fortunately, I didn't nominate which Christmas and now, with Christmas almost upon us yet again, I could, and would, give the same answer," he said.
Sundance is developing the $4.7 billion Mbalam iron ore project in west Africa, but it is dependent on a larger partner, such as Hanlong, providing funding.
Earlier this month Hanlong secured $US438 million ($425.39 million) from a Chinese bank to fund its acquisition of Sundance Resources.
But analysts have questioned the viability of the project, given recent iron ore price volatility and location of the project.
Mr Jones said since the deal with Hanlong was first agreed in October 2011, the world economy had changed dramatically.
"Turmoil on world financial markets were key factors in the board agreeing to a revised price and timetable for the transaction," he said.
Still, he said shareholders would soon be given the opportunity to determine the final outcome.
Sundance has a hematite resource of 775 million tonnes and ore reserves or 352 million tonnes.
Mr Jones added that the Mbalam-Nabeba had an "outstanding future," as a stand-alone project and as the hub of the world's next great iron ore region.
Proxy votes counted at the AGM showed almost 13 per cent of shareholders voted against the company's remuneration report after chief executive Giulio Casello received a total of $1.9 million and Mr Jones received $814,000 in 2012.
Nine per cent of voters voted against the re-election of director Barry Eldridge.
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