What the Brokers Say
WHAT THE BROKERS SAY: Interesting news and views from across the Resource Analyst universe.
Sundance Resources Limited (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 of DSO for at least 12 years, with a 20-plus year, second stage 35 million tonnes per annum high‐grade itabirite concentrate operation starting in year 11.
Sundance Resources Limited (ASX: SDL) is making steady progress towards development at the Mbalam‐Nabeba iron ire project in the Republic of the Congo 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.
Midas Resources Limited (ASX: MDS)
New management to develop Kalman
60.8 million tonnes JORC Resource at 0.60 per cent copper equivalent to be finessed into a high-grade project
Recent drilling at Overlander, less than 10 kilometres from Kalman, has reported intercepts including:
14 metres at 2.62 per cent copper, 9m at 2.58 per cent copper, 13m at 2.15 per cent copepr.
Midas has consolidated over 1,950 square kilometres of tenements southeast of Mt Isa, including over 60km of the Pilgrim Fault.
This includes Kalman which is the basis for a copper project in northwest Queensland.
Kalman’s existing Resource will be reviewed, focussing on a smaller, higher-grade open pittable Resource, supplemented by high-grade feed from nearby deposits.
New Management – New Projects
New management was installed at Midas, after 10 years.
The new management has introduced new projects in N‐W and Central Queensland and is aggressively progressing them.
The new management has been successful in getting title to over 1,950sqkm, nearly all of which is 100 per cent Midas owned (and the balance on a clear path to 100 per cent).
Kalman development potential
Over $25 million has been spent at Kalman by previous owners, producing a JORC Resource of over 350,000 tonnes of contained copper equivalent, of which about 10 per cent is underground and the balance open‐cut.
The scoping study was based on a high volume, modest grade project, adding 6 per cent to each of global Rhenium and Molybdenum supply.
Midas’ concept is to focus on a smaller, higher grade project that relies less on by‐product credits and niche markets.
Regional Plan
Midas has over 65km of the Pilgrim Fault, which has many targets for near surface, higher grade copper, as shown by recent exploration results; these are within 10km of Kalman so they can be developed as satellite feeds to a mill of 1 to 2 million tonnes per annum at Kalman.
Other Projects
Kalman is the focus project for Midas.
Midas is farming into 320sqkm near the historic Mt Morgan and has flow a VTEM survey which has identified other prospective VMS occurrences.
Beer & Co conclusions
Beer & Co expects that the round of drilling that is to commence soon will lead to the definition of a new project, which we expect will be announced during Q2 2014.
Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.