DJ INTERVIEW: Cape Lambert Chairman: 18 Parties Interested In...

DJ INTERVIEW: Cape Lambert Chairman: 18 Parties Interested In Marampa17/07/2011 12:01AM AEST This story was originally published Thursday.

--18 interested parties officially contacted over Marampa listing

--Mineral resource estimate increased to 680 million tons per annum from 197 million tons

--Study in progress investigating increasing annual output to 10 million tons per year from 5 million tons per year


By Francesca Freeman

Of DOW JONES NEWSWIRES


LONDON (Dow Jones)--Australian mineral investment company Cape Lambert Resources Ltd. (CFE.AU) has begun formal discussions with 18 parties interested in an October listing of its Sierra Leone Marampa iron ore project, following an more-than-threefold increase in the project's mineral resource estimate.

"The Marampa project is effectively complete and it is time to spin it out," Executive Chairman Tony Sage told Dow Jones Newswires in an interview.

Although unwilling to identify prospective investors, Sage said Cape Lambert had showed 18 groups around the Marampa project, all of whom expressed an interest. Having revised the company's resource outlook for the site to 680 million metric tons last week from 197 million metric tons, Cape Lambert has now written to all interested parties and opened up a virtual data room to prepare for Marampa's initial public offering on the London AIM market, expected in October.

"We didn't want to talk to people until we were ready, but having upsized our resource to almost 700 million tons, the project is now economic to develop," said Sage.

Cape Lambert expects Marampa to be valued at least A$500 million, with annual iron ore exports of five million tons, based on a $655 million mining development that would access nearby rail and port facilities operated by African Minerals Ltd.

However, an upgrade study is currently in progress investigating strategies to increase output to 10 million tons per year, a move that could bump up the company's value to as much as $1.5 billion, said Sage.

In February, Cape Lambert flagged the sale of Marampa by June, but the process has been delayed by a longer-than-expected drilling program on Marampa.

At that stage, Cape Lambert was considering either a trade sale or IPO, but it now believes better value will be realized from a new listing.

"If we spin it out, we keep a portion and take royalties, which is much better for our shareholders," said Sage.

Sierra Leone is one of several West African countries trying to establish a major iron ore export industry, following recent investments in the region by Chinese groups and global diversified miners Rio Tinto PLC (RIO), BHP Billiton Ltd. (BHP.AU) and Brazil's Vale SA (VALE).


-By Francesca Freeman, Dow Jones Newswires; +44 (0)20 7842 9412; [email protected]


(END) Dow Jones Newswires

July 16, 2011 10:01 ET (14:01 GMT)

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