announcement jorc, page-3

Cape Lambert closer to sale

Rebecca Lawson
Tuesday, 26 June 2007

CAPE Lambert Iron Ore has released a new mineral resource estimate for its namesake magnetite project which has satisfied one of the conditions for the sale of 70% of the project to a Chinese investor.


The new resource estimate focuses on the Central Target Area which is some six kilometres long and one kilometre wide within the project.

The estimate uses data from the company's 2006 reverse circulation drill program together with earlier drill data from Robe River Mining.

Calculated by Golder Associates, the total new resource estimate stands at 977 million tonnes at 32.4% iron, 39.6% silica, 1.76% aluminium oxide, 0.024% phosphorous, 0.11% sulphur and 5.98 loss on ignition.

Separately, the mineral resource in the inferred category is 323Mt at 32.6% iron and 654Mt at 32.2% iron is in the indicated category.

The estimate uses a 20% iron cut-off.

The new estimate satisfies one of the conditions for the sale of 70% of the project to Beijing firm Best Decade Holdings for $250 million in cash, with one of the conditions including Cape Lambert defining a minimum indicated mineral resource of 300Mt.

Another condition for the sale is that resource estimates are verified by an independent geologist.

As announced in is March quarterly report, Cape Lambert has appointed RSG Global as its independent geologist, which has already started verification of the estimate.

The resource estimate is expected to be verified before a shareholder meeting scheduled for July 16.

Shares in Cape Lambert shed 0.5c to 74c in trading this morning.