going by this article in miningnews, the sale of Marampa is a long way off...2 to 3 years away according to TS
"Sage told MiningNews.net the company has received interest from third parties with a number of parties in the data room reviewing material and hoped to monetise Marampa within two to three years for between $400-$500 million"
African Iron bid a win-win for Cape Lambert -------------------------------------------------------------------------------- Wednesday, 11 January 2012 Tania Winter
TONY Sage-chaired Cape Lambert Resources, the largest shareholder of African Iron, has thrown its support behind an all cash takeover of the group by one of South Africa’s largest coal producers Exxaro Resources, in a deal that could inject $A72.2 million into the investment vehicle.
The deal values African Iron at between $250 and $287 million.
For Cape Lambert, this represents a 209% return on its 19.9% investment in African Iron, including the $47 million in cash it received when it sold DMC Mining, the original owner of the 80% interest in the Mayoko property in the Republic of Congo, to African Iron (formerly Stirling Minerals) in January last year for $32.4 million.
Cape Lambert will maintain exposure to Mayoko via a $A1 per tonne royalty.
It also grows the company’s kitty to $230 million, including the $46.5 million received last month from the recent sale of its Sappes gold project in Greece to fledgling explorer Glory Resources.
Exxaro is initially offering 51c a share per African Iron share, but will increase this to 57c once it snares 75% in the group, as well as 31c cash as a base consideration for each listed African Iron option, climbing to 37c, again once the 75% acceptance level has been triggered.
The offer, which is due to close on February 14 unless extended, has been unanimously supported by the African Iron board in the absence of a superior bid, and is subject to only a small number of conditions, namely more than 50% minimum acceptance (on a fully diluted basis).
Each African Iron director intends to accept the offer within six business days of its opening.
A research note by leading investment bank Renaissance Capital viewed the likelihood of more than 50% acceptance as being high and was optimistic the 75% level would be reached.
Exxaro plans to fund the offer from cash reserves and existing debt facilities and has already obtained Foreign Investment Review Board and all necessary South African regulatory approvals.
The $72.2 million to be paid to Cape Lambert is based on the higher 57c per share offer, and while it actually holds a 25.25% stake in African Iron, the pre-bid agreement with Exxaro applies only to 19.9%, or 100,315,473 shares.
Exxaro chief executive Sipho Nkosi said the offer provided the group with the opportunity to realise its stated ambitions of developing a significant iron ore asset, leveraging off its bulk commodity and iron ore expertise.
“We have invested a significant amount of time and resources in due diligence on this acquisition, including several site visits and meetings with senior members of the Republic of Congo government,” Nkosi said in a statement.
Sage said the decision to agree to accept the takeover offer was not taken lightly, given its belief in the Mayoko project.
“However, we felt that to do so at this time would also generate sufficient funds to rapidly increase the exploration and development activities across our existing suite of iron ore assets in West Africa,” Sage said.
These include the Marampa and Kukuna iron ore properties in Sierra Leone and Sandenia in Guinea.
More importantly, the proposed takeover provides it with much-needed breathing space, taking the pressure off in terms of a trade sale, with the planned float of its Marampa asset on London’s AIM put on hold due to market conditions.
Sage told MiningNews.net the company has received interest from third parties with a number of parties in the data room reviewing material and hoped to monetise Marampa within two to three years for between $400-$500 million.
Behind the scenes Cape Lambert continues to progress technical work on the property.
Shares in African Iron were last trading on 40c, while shares in Cape Lambert were unchanged on 52.5c.
CFE Price at posting:
53.5¢ Sentiment: Hold Disclosure: Held
(20min delay)