Also - update on DJ Newswires on Marampa just out....
DJ Cape Lambert Aims For Marampa Project Prospectus By Late March
21/02/2012 02:34PM AEST
By Robb M. Stewart
Of DOW JONES NEWSWIRES
MELBOURNE (Dow Jones)--Cape Lambert Resources Ltd. (CFE.AU) aims to distribute the prospectus for an initial public offering of its Marampa iron ore project in Sierra Leone by the end of March as it pushes ahead with plans to sell control by the middle of the year, Chairman Tony Sage said.
Cape Lambert plans to sell all but a 25% stake and retain a royalty from the Marampa project, and is well on the way to a listing for the project on London's Alternative Investment Market, Sage said in an interview with Dow Jones Newswires.
The release of the prospectus will be followed by roadshows visiting potential investors lasting around a month, he said.
The move is in keeping with the Perth-based businessman and former fund manager's approach to the mining industry, where his company invests in promising assets, then sells down to a minority position.
Sage said his company planned to IPO Marampa last year, before market volatility heightened amid the fall in commodity prices and uncertainty over the global economy. After Marampa is listed, Cape Lambert likely will seek to sell its Leichhardt copper project, located about 100 kilometers northeast of Mt Isa in Australia's Queensland state, he said.
"We don't just buy and sell...we fix problems, then sell a clean package," Sage said, adding Cape Lambert investors have done well out of the strategy, which has funded dividend payments and a share buyback in recent years.
The company has attracted strong interest from institutional investors. BlackRock Inc. (BLK), one of the world's biggest investors in the resource industry, this week disclosed it had increased its stake in Cape Lambert to 8.6% from 5.1% with recent on-market purchases of shares.
The Marampa exploration project, located near the township of Lunsar in Sierra Leone, covers more than 300 square kilometers that encloses an area where London Mining PLC (LOND.LN) holds a mining lease.
The project's plans envisage an open-pit mine producing 10 million metric tons a year of iron ore concentrate at its peak. Capital investment of US$458 million is needed to bring 2 million tons of annual production online in a first phase, with a further US$1.05 billion required to reach maximum capacity, the company has said previously.
Cape Lambert earlier this year agreed to sell its 25% stake in African Iron Ltd. (AKI.AU) to South Africa's Exxaro Resources Ltd. (EXX.JO), which is expected to generate about A$72.2 million. In mid-December it sold its Sappes gold project in Greece to Glory Resources ltd. (GLY.AU) for A$46.5 million in cash and shares.
Sage has a strong focus on West Africa, which he has long said will become the next Pilbara--the patch of Western Australia that accounts for 40% of the world's trade in iron ore by sea. Some of the world's biggest producers of iron ore, including Vale SA (VALE) and Rio Tinto PLC (RIO), are investing tens of billions of dollars developing projects in the region.
In Cape Lambert's portfolio is the Kukuna iron ore project in Sierra Leone, where the company has begun drilling an exploration target of 1 billion to 2 billion tons or hematite ore, and Sandenia in neighboring Guinea where drill rigs will soon be set up to explore.
-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; [email protected]
CFE Price at posting:
53.0¢ Sentiment: LT Buy Disclosure: Held
(20min delay)