Two days after announcing a $20 million capital raising for its West African Iron Ore project, Perth-based Sundance Resources Ltd announced it was seeking an additional $10 million.
Two days after announcing a $20 million capital raising for its West African Iron Ore project, Perth-based Sundance Resources Ltd announced it was seeking an additional $10 million.
The full text of a company announcement is pasted below
Due to high levels of demand from leading international and Australian institutional investors, emerging international iron ore company Sundance Resources Ltd has increased the size of its proposed share placement from the $20 million announced on Tuesday to $30 million to accelerate its potentially world-class Mbalam Iron Ore Project in West Africa.
The share placement will comprise of 375,000,000 shares at a price of 8 cents per share, to be made in two tranches to both existing and new Australian and international institutional and sophisticated investors. The first tranche, comprising 152.25 million, shares will be within the limits set out in the ASX Listing Rules and will be completed shortly under the Company's 15% placement capacity. The issue of the second tranche of 222.75 million shares will require shareholder approval at a meeting to be convened shortly.
The placement shares will rank pari passu with the Company's existing ordinary shares. Following allotment of the shares under the placement, Sundance will have 1.532 billion shares on issue, with a market capitalisation of approximately $122 million at the issue price of the placement.
Capital Investment Partners Pty Ltd, a company associated with two directors of Sundance, has been appointed on normal commercial terms to arrange this placement.
The decision to increase the size of the placement follows high levels of investor interest in the Company and its plans to accelerate a pre-feasibility study on the Mbalam Iron Ore Project in West Africa with the appointment, announced yesterday, of high-profile mining executives, Mr George Jones, Mr Don Lewis and Mr John Saunders to its Board.
Strategically located midway between European and Asian markets, the Mbalam Iron Ore Project in the Republic of Cameroon offers Sundance a potentially significant opportunity to develop an iron ore export project of global significance, delivering substantial volumes of high-grade hematite ore to international markets over a long period.
Incoming Sundance Chairman, Mr George Jones, said the increased capital raising would enable the Company to accelerate and expand resource drilling programs as part of the current pre-feasibility study, which is scheduled for completion in July 2007. A preliminary budget of $18 million had been allocated to the pre-feasibility study, but this will increase with additional work and drilling being undertaken.
"The very strong response to this proposed capital raising demonstrates the level of appetite in international investment markets for quality iron ore assets, particularly in light of the continuing strong demand outlook for iron ore in global markets," Mr Jones commented. "The potential scale of the Mbalam Project, combined with the fact that it is a high-grade hematite deposit, has attracted investment support from a range of high-quality Australian and international institutional investors."
A Scoping Study on the Mbalam Project was completed by Australian-based Promet Engineers in August 2006 based on the currently estimated initial Inferred Resource of more than 800 million tonnes of iron ore, including 218 million tonnes grading more than 60% Fe which was previously delineated by a very limited drilling program by the United Nations Development Fund.
Sundance aims to confirm and expand on those results with a major exploration program over the next 6 -12 months, targeting the estimated 35km strike length of prospective iron mineralisation in the region.
