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http://www.proactiveinvestors.co.uk/columns/fairfax-i-s/8032/fairfax-marketing-report-including-discovery-metals-goldplat-firestone-diamonds-medusa-mining-plus-others-8032.html


Cape Lambert (ASX:CFE) – Plans A$500m Iron Ore IPO
· The company has earmarked the Marampa Iron Ore project in Sierra Leone for sale.
· The project has a JORC resource of 680 Mt at 28.2% Fe over four deposits.
· The project is at the scoping study stage which has looked at a 10 mtpa concentrate operation.
· Feasibility and permitting has commenced with a total exploration target of 0.7 – 1.0 Bt of 25-35% Fe.
· The project has rail and port access of 5 mtpa with an additional 5 mtpa access in progress.
Conclusion: Cape Lambert appears to be realising value from its iron ore assets – the company will have a cash flow of A$72.2m from its stake in African Iron following the takeover from Exxaro.
Following the set back in the second half of last year, the market/interest in the iron ore sector has revived as prices still remain relatively high generating good cash flows for iron ore producers and high NPVs on iron ore projects.
The West African Iron ore landscape appears to be building momentum with projects from the larger players coming into fruition as well as juniors such as London Mining and African Minerals getting into production. This combined with the bid for African Iron should attract further interest in the sector.
There are newsreports that the Gabonese government may be taking away the licence of the Belinga iron ore deposit from CMEC and awarding it to BHP Billiton. Belinga is one of the major iron ore deposits in Gabon and CMEC estimates a 30 mtpa iron ore project here with an investment of US$3.5bn to develop the mine and transport infrastructure. Should BHP be successful in securing the licence and pushing this forward, it would be positive for assets that have been “stranded” in the region. Equatorial’s Badondo project is across the border from Belinga and other nearby projects include Afferro’s Nkout project, Core’s Avima project and SDL’s Mbarga project.
We would recommend investors to be selective in the iron ore juniors we would buy behind this newsflow and to invest in companies which can realistically get product to market within a reasonable timescale and with good quality ores – we recommend Equatorial Resources with its project in the Congo next to African Iron, Bellzone and a speculative buy on West African Minerals which has some early stage licences in the Cameroon and Sierra Leone but with a targeted approach to pursuing projects with DSO potential.