6 August 2008 The Company Announcements Office ASX Limited Via E Lodgement Cape Lambert and MCC settle AUD$400M Sale Agreement Drilling scheduled to commence at Cape Lambert South Project Highlights Cape Lambert and MCC Mining (Western Australia) Pty Ltd, a wholly owned subsidiary of China Metallurgical Group Corporation, settle AUD$400 million sale of Cape Lambert Iron Ore Project; First payment of AUD$240 million received, which comprised an AUD$230 million cash payment and the AUD$10 million deposit; The Company’s cash reserves now stand at more than AUD$270 million; and The next payment of AUD$80 million is due on or before 15 September 2008. Cape Lambert Iron Ore Limited (“Cape Lambert” or the “Company”) (ASX: CFE, AIM: CLIO) and MCC Mining (Western Australia) Pty Ltd, a wholly owned subsidiary of China Metallurgical Group Corporation (“MCC”) have today completed settlement of the AUD$400 million sale of the Cape Lambert Iron Ore Project, located in the Pilbara region of Western Australia. As a result of settlement being completed, Cape Lambert has received the first substantive cash payment of AUD$240 million, comprising a payment of AUD$230 million, and the AUD$10 million deposit. A further cash payment of AUD$80 million is to be paid to the Company on or before 15 September 2008. The final payment of AUD$80 million is to be paid on the grant of a mining lease and related construction approvals in respect of the Cape Lambert Iron Ore Project. With settlement now complete and the Company holding in excess of AUD$270 million in cash reserves, the Board of Cape Lambert will proceed with the reduction of capital by way of a return to shareholders, as approved by shareholders at the 28 July 2008 general meeting. The Company will make an announcement containing details of the reduction of capital, including the timetable applicable to the reduction of capital, on the later of receipt of the 2008 audited accounts or the AUD$80 million second payment from MCC. The Company will continue to investigate and progress opportunities associated with the acquisition of projects and companies that meet the Board’s investment criteria. Exploration Licence Application 47/1493 remains on schedule to be granted in August, which will enable drilling to commence at the Cape Lambert South Project in September/October 2008. Cape Lambert Iron Ore Limited 6 August 2008 ASX Release Page 2 of 2 Cape Lambert Chairman, Ian Burston, said “This is a landmark day for the Company. We have significant cash reserves, a highly prospective exploration target and a number of projects and companies that we are running the ruler over at present.” “Our shareholders will receive a return through the capital reduction, and we feel we are well positioned to complete acquisitions that will provide long-term growth to shareholders.” Yours faithfully Cape Lambert Iron Ore Limited Ian Burston Executive Chairman FOR MORE INFORMATION PLEASE CONTACT: Cape Lambert Iron Ore Limited: Ian Burston +61 (0)8 9211 0600 Tony Sage +61 (0)8 9380 9555 Australian Enquiries: Professional Public Relations David Tasker +61 (0)8 9388 0944/ +61 433 112 936 UK Enquiries: Nominated Adviser: Grant Thornton UK LLP Fiona Owen +44 (0)20 7383 5100 AIM Broker: Collins Stewart Europe Limited Adrian Hadden +44 (0)20 7523 8353 Oliver Quarmby +44 (0) 20 7523 8354 Conduit PR: Jos Simson +44 (0)20 7429 6603/+44 (0)7899 870 450 Jane Stacey +44 (0)20 7429 6606 Website: www.
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