marampa plans 2

Cape Lambert sells Sappes gold project as its ponders Marampa listing
2:45 pm by Kam Patel With Cape?s main focus being iron ore and base metals, the sale of the Sappes gold project offers the best value for the company's shareholdersWith Cape?s main focus being iron ore and base metals, the sale of the Sappes gold project offers the best value for the company's shareholders

Cape Lambert Resources (ASX:CFE), the Perth-based miner, announced today the sale of its 100 percent owned Sappes gold project in Greece to Glory Resources (ASX:GLY) for A$46.5 million in cash and Glory paper. The move increases the group?s focus on iron ore and base metals as it continues to seriously consider a potential US$400-US$500 million IPO of its Marampa iron project, located in Sierra Leone.

The sale, which is subject to Glory obtaining shareholder approval, will raise US $42.5 million in cash for Cape Lambert, which acquired the Sappes project as part of its $135 million bid for the assets of failed miner CopperCo Limited in June 2009.

If the deal goes ahead, Cape will have realised around $250 million from the sale of former CopperCo assets in the past 24 months.

The Sappes project, located in north eastern Greece, boasts a total mineral resource at its Viper deposit of 0.99 million tonnes at 21.4 grammes per tonne (g/t) for 688,000 ounces of contained gold.

The total mineral resource at Sappes? St Demitrios deposit is 0.8 million tonnes at 3.4 g/t for 86,300 ounces of contained gold.

In a statement on the Sappes sale, Cape Lambert?s executive chairman Tony Sage says that company?s main focus is iron ore and base metals. The Sappes sale, therefore, offers the best value for shareholders and allows the company to retain exposure to the Sappes project's upside through shares in Glory, he says.

Sage recently admitted in an interview with Platts, the respected metals and energy information provider, that Cape Lambert Resources is looking to list its Marampa iron ore project in Sierra Leone by the end of 2011 to raise as much as US$500 million.

Certainly earlier this year the company had also been pondering the option to offload Marampa completely for a minimum of A$500 million. Even at that time, though, Sage admitted he was beginning to favour an IPO option for the business.

The August 4 Platts report cites Sage as saying Cape Lambert plans to announce a strategic investor for the project to coincide with a road show later this year for the initial public offering, with London and Hong Kong front runners.

The company wants to sell down its 100%-owned project in an IPO target range of US$350 million - US$500 million, while offering a strategic investor the chance to take a majority stake, according the article.

In a company presentation released today, Marampa is declared to have a total mineral resource of 680 million tonnes at 28.2% iron across four deposits. The resource comprises 261 million tonnes in the total indicated category at 28.7 per cent iron (38 per cent of total), and 419 million tonnes at 27.9 per cent iron.

The company says there is potential to increase resource inventory at the Mafuri, Makambo, Petifu and Toma satellite prospects. It adds that potential production could start in 2012-13, ramping up to 10 million tonnes per annum (Mtpa).

A scoping study for a 5Mtpa, standalone open pit mining development at Marampa has alread been completed with initial capital investment estimated at US$655 million.

Earlier this year Cape Lambert Resources advised that definitive agreements have been signed between AIM listed company African Minerals (LON:AMI) and China Railway Materials Commercial Corporation for the development of African?s Tonkolili project, also in Sierra Leone, and Cape?s Marampa project.

A key aspect of the agreements is the upgrade of the port and railway infrastructure for use by both companies.
The involvement of the Chinese in Sierra Leone was underlined further by African Minerals earlier this month finally executing a $1.5 billion investment accord for its Tonkolili project with China's state-owned Shandong Iron and Steel Group.

Cape Lambert?s Sage is pleased with the increased Chinese companies? involvement, noting in the Platts interview that through their agreements with Africa Minerals, Sierra Leone has been ticked off by China as a place it approves to do business.

He believes further investment by Chinese companies could be fast-tracked as a result of the Africa Minerals deal, while interest from India is high due to the country's delays in matching Chinese rates of securing overseas natural resources.

Cape Lambert believes the rail and port logistics at Marampa are advantages over larger, more costly West African iron ore projects led by Rio Tinto, Vale, BHP Billiton and Xstrata. This is despite higher ore grades being developed at other sites.