Gindalbie, Sundance drop merger plan

SYDNEY (Reuters) - Australia's Gindalbie Metals Ltd (GBG.AX: Quote, Profile, Research, Stock Buzz) and West African explorer Sundance Resources Ltd (SDL.AX: Quote, Profile, Research, Stock Buzz) scrapped plans for a merger that would have created a company worth around A$2.4 billion ($2.2 billion).

Gindalbie had been looking to tap vast deposits of iron ore in Cameroon with an all-share offer for Sundance worth about A$1.38 billion, based on Gindalbie's closing price on Wednesday.

"The decisions follow due diligence undertaken by the companies and consideration of extensive feedback received from shareholders in both companies," the companies said in a joint statement on Thursday.

Gindalbie's managing director, Garret Dixon, said the company remains committed to developing its Karara iron ore project in Western Australia.

The project is being supported by its 12.78 percent shareholder, China's Anshan Iron & Steel Group Corp (0347.HK: Quote, Profile, Research, Stock Buzz).

Sundance said it will continue to focus on developing its Mbalam project in Cameroon.

"Today's decision dos not in any way change this vision," Sundance Managing Director Don Lewis said in a statement.

Both companies are chaired by long-time iron ore miner George Jones, who said he was disappointed with the decision but supported the boards and management teams at both companies.

($1=A$1.11)