What the Brokers Say
WHAT THE BROKERS SAY: Interesting news and views from across the Resource Analyst universe.
Sundance Resources (ASX: SDL)
Sundance Resources is a Central African iron ore developer, with high quality projects at the shovel‐ready stage that will initially produce a high‐grade, low impurity Direct Shipping Ore (DSO) product.
The company envisages a two stage production plan, with an initial phase producing 35 million tonnes per annum (Mtpa) of DSO for at least 12 years, with a 20-plus year, second stage 35Mtpa high‐grade itabirite concentrate operation starting in year 11.
Sundance Resources (ASX: SDL) is making steady progress towards development at the Mbalam‐Nabeba iron ore project in the Republic of the Congo (RoC) and Cameroon, in Central Africa.
The project is‘shovel‐ready’, with a positive Definitive Feasibility Study delivered in early 2011 and the majority of Government approvals now in place.
Tenders for the estimated $2.6 billion direct cost rail and port infrastructure have been received, with a decision on the successful bidder expected in Q2, 2014.
Negotiations are also underway concerning offtake agreements.
These are critical elements in advancing the project, enabling construction of the infrastructure that will unlock the riches of this greenfield, world‐class iron ore province.
Sundance’s project is the most advanced in this emerging iron ore province.
Development of Mbalam‐Nabeba represents an excellent ‘company making’ opportunity, while controlling regional infrastructure should create numerous secondary benefits.
The company will achieve a strong market re‐rating as it achieves funding and development milestones.
Advanced Player in a World Class Province
Sundance Resources is majority owner of the Mbalam‐Nabeba iron ore project (including the Mbarga and Nabeba groups of deposits.
The project is the most advanced project in the as yet undeveloped world class Central African iron ore province, located in Cameroon, Republic of the Congo and Gabon.
The province includes two main groups of identified deposits; one group (including Mbalam‐Nabeba) is located in the northern RoC, Gabon, and southern Cameroon. The second is located in the southern part of the RoC.
These form two distinct provinces – the northern province contains significant DSO resources in addition to itabirite, whereas the southern Mayoko‐Zanaga province is dominated by itabirite, with no significant DSO resources.
Blackham Resources (ASX: BLK)
Blackham Resources continues to make significant progress as it steadily marches toward production.
The recently acquired 1.1 million tonnes per annum processing plant represents a game changer, supporting the company’s transition from ‘explorer’ to ‘emerging producer’.
Blackham also has a substantial tenement position over highly prospective ground where ongoing drill programs provide potential for resource upgrades in the coming months.
Blackham Resources (ASX: BLK) recently agreed terms to acquire the Wiluna gold project under highly favourable terms totalling $4.6 million.
This acquisition is a major step forward for Blackham in its aspirations of becoming a near-term, self-sufficient gold producer.
The Wiluna gold project hosts a significant JORC Resource of 16.7 million tonnes at 5.3 grams per tonne gold for 2.8 million ounces of gold.
However, the game changing aspect of the acquisition for Blackham is the fully permitted 1.1Mtpa processing plant and associated infrastructure, located in the middle of its Matilda gold project.
With the acquisition of the Wiluna gold project now a formality, Blackham intends to continue drill programs designed to prove up oxide and free milling reserves as the principal feed for a refurbished and reconfigured processing plant.
Encouragingly, the nearby Williamson and Matilda deposits both host this style of mineralisation and are already within granted Mining Leases (existing haul roads also link the plant to the deposits), thus providing a relatively short time frame and low capex pathway to production.
Initial gold production is targeted in mid-2016.
Blackham is now in the enviable position of being a well-funded, emerging gold producer with a significant resource all on the door step of fully permitted processing plant.
Significant exploration potential still exists and with drilling campaigns ongoing, resource and reserve upgrades are likely.
Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.