cape lambert have a age

Cape Lambert ready to pounce on assets
5th January 2009, 6:00 WST

The Cape Lambert Iron Ore board is poised to meet this week to consider a swag of potential acquisitions, including the assets of collapsed miner CopperCo and debt-laden OZ Minerals as it prepares to strike an offtake deal over its flagship Sierra Leone project.

Chairman Tony Sage said the cashed-up explorer had short-listed up to seven projects after being “inundated” with offers from companies looking to offload assets amid the global financial crisis.

“All we can do is analyse the assets, see what we want and make an offer — and we’ve done the first two parts,” Mr Sage told WestBusiness.

“I’m going to call a full board meeting on Monday and I’ve just got to now convince the board because some of the assets obviously aren’t iron ore related.

“(Then) we’re just going to make some offers — they’re pretty lowball to reflect the current market conditions. We don’t want to rush it.

“Some of the assets are quite good and, if we can pick them up at the right price, then I think in six months’ time we’re going to have a very, very strong balance sheet.”

Cape Lambert has been on the hunt for fresh acquisitions since pocketing $400 million in August from the sale of its namesake iron ore project to China Metallurgical Group. As of December 16 it had just over $220 million in the bank.

It has already struck a deal with African Minerals for an initial 30 per cent stake in the Marampa iron ore project in Sierra Leone and has invested in several cash-strapped junior explorers via convertible notes that will hand Cape Lambert the assets if the minnows cannot meet payments.

Assets likely to be on Cape Lambert’s shopping list are OZ Minerals’ Golden Grove and Rosebery polymetallic mines in WA and Tasmania.

Credit Suisse analysts have valued the projects at $73 million and $153 million respectively but, given the buyer’s market, Cape Lambert could pick them up at a hefty discount.CopperCo’s projects include the Lady Annie copper mine and Lady Loretta lead-zinc project, both in Queensland.

Cape Lambert representatives are due to head to Africa this week as work begins at the Marampa iron ore project, with the first of two Chinese delegations due to arrive to discuss developing the site’s rail and port infrastructure in return for offtake agreements.

“I can’t name (the Chinese groups) yet until we sign one of them but there are two groups looking at building the rail and port for us and for that they’ll get guaranteed offtake,” Mr Sage said.

“That’s very positive for Cape Lambert because we don’t have to spend any of our money on infrastructure.”

Cape Lambert and joint venture partner African Minerals have already signed a lease with the Sierra Leone Government over rail and port access but both need to be upgraded.

KATE EMERY