By Gillian Tan
SYDNEY--Sundance Resources (SDL.AU) has held talks with parties
including Glencore International PLC (GLEN.LN) about the sale of a
stake in its flagship Mbalam iron ore project, a person familiar
with the matter said Tuesday.
The talks are taking place amid worries that China's Hanlong
Mining may fail to complete its 1.38 billion Australian dollar
(US$1.4 billion) takeover of Sundance, which is being advised by
UBS AG. It wouldn't require parties to acquire any equity in
Australia-listed Sundance, the person said.
A credit-approved term sheet from Hanlong's financiers, China
Development Bank and China Everbright Bank Co., is due March 26.
The person said it isn't clear whether Hanlong will meet this
deadline.
Sundance said last month that if Hanlong wasn't able to deliver
the term sheets, the deal may be terminated.
The Mbalam iron ore project, which straddles the border of the
Republic of Cameroon and the Republic of Congo, is forecast to cost
around A$5 billion to build. The project is targeting annual output
of 35 million metric tons of iron ore, used to make steel.
Prior to Hanlong's proposal to acquire the company in July 2011,
Sundance told the Australian Securities Exchange that it had
shortlisted parties as possible strategic partners who could
provide equity, construction, off-take and finance for the Mbalam
project. Sundance said at the time the deal terms were yet to be
fixed, but it wasn't interested in selling a more than 50%
stake.
The person familiar said Tuesday the size of the stake discussed
recently wasn't limited to 50%.
Sundance shares fell 6.7% early Tuesday to A$0.21, less than
half the A$0.45 offer tabled by Hanlong.
-Write to Gillian Tan at gillian.tan@wsj.com
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