News Bulletin

Sundance Positive expectations of the upcoming DFS results

Wednesday, 12 Jan 2011
 The 4th quarter of 2010 has been very welcoming for Resource investors with shares such as Western African Resources, Bathurst Resources, Mutiny Gold and Sundance Resources doubling their value.
 
Sundance Resources is currently developing its Mbalam Iron Ore Project (“the Project” or “Sundance”) in the Republic of Cameroon and the Republic of Congo in the central west coast of Africa.  The company’s recent share price rally signals the market’s positive expectation of the Project’s DFS, which is due in Q1 2011. 
 
However, some of the recent share price uplift may also incorporate a component of Sundance’s upcoming funding risk.  The company’s latest presentation shows that in accordance with its 2008 PFS results, the Mbalam Iron Ore Project requires around $3.4 billion to develop.  With the company’s cash balance at Q3 2010 of around $60 million, Sundance would require to raise around $3 billion of capital in the near future.
 
Sundance currently has 2.7 billion shares outstanding and at a market capitalisation of around $1.6 billion, it is expected that the company will undergo a share consolidation to streamline its capital structure before committing to any capital raises. 
 
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