Hanlong Mining has become Sundance Resources' largest shareholder after it acquired the entire stock holding of the Talbot Group.
Hanlong said the acquisition of Talbot Group's 16 per cent shareholding on Friday took its stake in Sundance to 19 per cent.
Sundance chairman George Jones said Hanlong representatives expressed their regard for the company as a long term investment following the deal.
"It was a friendly discussion with Hanlong and we perceive their investment positively," Mr Jones said.
"We consider Hanlong's decision to become a major shareholder a further indication of Chinese interest and recognition in the validity of our strategy to develop the Mbalam Iron Ore Project over the next four years."
Hanlong Mining chairman Peter Mansell said the acquisition was consistent with Hanlong's investment strategy.
"We're a financial investor and will be a supportive shareholder assisting the company to fast-track its infrastructure and mine development plans," Mr Mansell said.
At 9:46AM (WST) Sundance shares had shed 2 per cent to trade at $0.48.