cfe to sell marampa for $500m +

FRESH from turning around the sale of DMC Mining this month, Tony Sage’s Cape Lambert Resources will put its other major African iron ore project on the blocks next year.
Mr Sage said today he expects to begin the sale process for the sale of the Marampa iron ore project in Sierra Leone early next year.

Cape Lambert acquired its initial stake in the Marampa project in late 2008. The company now controls 100 per cent of the project after issuing 118 million shares to London-listed African Minerals, and agreeing to spend at least $US25 million (then $A29.5 million) on the development of the project.

The Cape Lambert boss now says he will be seeking at least $500 million, plus an ongoing equity interest in the project, in a trade sale of Marampa early in the new year.

The decision comes after Cape Lamberts sale of DMC Mining to Stirling Minerals won the approval of Stirling shareholders this week. DMCs major asset is the Mayoko iron ore project in the Republic of Congo.

We are looking for expressions of interest, as we did with Mayoko, and well probably start another process to monetise Marampa in January, said Mr Sage.

If you go on the valuations that have happened in Guinea and Sierra Leone with African Minerals, with Bellzone [Mining], with Chinalco and Vale and BHP, the minimum [we would want] would be $500 million.

Cape Lambert announced a maiden resource at Marampa last month, saying project contains 197 million tonnes grading 28.5% iron, with further exploration expected to significantly expand that resource.

Mr Sage said the company has sorted out transport issues at the project, and expects production to begin early in 2012.

Retaining an equity stake in both Mayoko and Marampa marks a major change of strategy for Cape Lambert, which made its money from buying earlier stage projects and then selling them before they reached production.

Mr Sage said maintaining an equity stake in the mines it buys will be a major part of Cape Lamberts strategy in the future, however.

He said the success of other Africa-focussed mining plays was the spur for Cape Lambert to shift strategy.

Cape Lambert was trading at 50c at 1245 AWST.