Dec. 31 (Bloomberg) -- Sundance Resources Ltd. surged the most in 17 months after gaining a permit for its iron ore mine, boosting confidence that a A$1.14 billion ($1.2 billion) takeover offer from Sichuan Hanlong Group will go ahead.
Sundance, developing the $4.7 billion Mbalam rail, port and iron-ore mine bordering Cameroon and the Republic of Congo, rose 16 percent, the most since July 18, 2011, to 37 Australian cents at the close in Sydney.
Congo approved a mining permit for the Nabeba deposit that forms part of Mbalam, paving the way for work to start once financing is confirmed, the Perth-based company said today in a statement. China Development Bank earlier this month delayed approving backing for Hanlong’s takeover, in part because it sought to review the mining permit.
“It’s one of the key approvals that they needed to get further uncertainty removed from the project,” Hayden Bairstow, a Sydney-based resources analyst with CLSA Asia-Pacific Markets Ltd., said by phone. “Confidence in the industry has been shaken in terms of funding these high-cost, long-life projects in places like West Africa.”
Hanlong, a Chinese investor in highway and power projects that already owns 14.15 percent of Sundance, delayed the acquisition after China Development Bank failed to agree on terms for a loan by a Dec. 13 deadline. China is urging its companies to buy assets overseas and secure energy and commodity resources to meet domestic demand.
Hanlong in August cut its takeover offer for Sundance by 21 percent to 45 cents a share after iron ore prices fell. The initial 57 cents-a-share offer was agreed to in October 2011.
The purchase of Sundance is scheduled to be completed by March 1, Hanlong said in a statement on Dec. 27.
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