UPDATE: Sundance Has Talked with Parties Including Glencore-Source

   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 [e-mail]

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