Cameroon government keeps Sundance waiting, shares tumble 25pc

Mining Angela East
Waiting, Getty

Troubled iron ore play Sundance Resources has resumed trading on the ASX — but still has no answer on whether the Cameroon government will extend an agreement over its Mbalam-Nabeba project.

Investors were not happy, driving down the share price a further 25 per cent on Wednesday to 0.6c.

The shares have lost 50 per cent of their value since mid-February last year when they reached a 52-week high of 1.2c.

The junior explorer (ASX:SDL) has been in a trading halt since January 29 pending the release of the government’s decision on whether it would grant another extension to the convention covering the project.

The Mbalam convention was signed by Sundance and the Cameroon government back in 2012 and paved the way for the development of the project.

An initial six-month extension to the convention expired on January 26 and Sundance was required to show substantial progress on funding the $1 billion project either by itself or with a credible partner before it could secure a further extension.

SDL shares over the past three months.
SDL shares over the past three months.

Just four days before the deadline, the company announced it had inked a binding memorandum of understanding with private Chinese firm Tidfore Heavy Equipment Group, which has agreed to help it secure financing for the project.

“No decision has been made as yet regarding the extension by the government,” Sundance told the market.

However, the company plans to continue work on the Mbalam-Nabeba project in the meantime.

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