News: Cape Lambert set to gain from African Iron

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Cape Lambert Resources Limited (ASX:CFE) looks set to gain from the proposed $338 million takeover of African Iron Limited (ASX:AKI) by South African mining group Exxaro Resources (PINK:EXXAF). 



Based on Cape Lambert’s stake in African Iron the company stands to receive $72.2 million if the deal goes through, a return of about 209 per cent on its investment.



Cape Lambert will also retain a $1 per tonne royalty in the Mayoko Iron Ore Project from the original sale agreement with African Iron.



Cape Lambert Chairman Tony Sage says the Exxaro takeover of African Iron represents an opportunity for Cape Lambert and its shareholders to generate a considerable return on its original investment.



Shares in Cape Lambert rose 2.86 per cent yesterday, closing at $0.54.



In the 2011 financial year Cape Lambert Resources reported a net loss of almost $12 million.