News item on MiningNews.net - http://www.miningnews.net/StoryView.asp?StoryID=2396937 Hopefully someone will buy for a good price but plan b looks pretty solid and is a good lever to help get the sale price up. Interesting TS says CFE will stay in for 25%. As always DYOR. ADH
New Marampa resource drives London IPO
Tania Winter Thursday, 7 July 2011
WITH resources capable of supporting a 20-year 10 million tonne per annum operation at its Marampa hematite play in Sierra Leone, Cape Lambert Resources is keen to go down the IPO route with a planned $US700 million ($A654 million) float in London timed for October.
Cape Lambert Iron Ore executive chairman Tony Sage.
The company?s colourful executive chairman Tony Sage confirmed to MiningNews.net that he would be travelling to London on Sunday to meet with five broking houses and six fund managers.
?We plan to write a prospectus now that all the information on Marampa is available, but think a $700 million float is quite conservative based on a project which has a potential net present value of $1.5 billion,? Sage said.
He also believes that the capital cost of $655 million for Marampa, which was returned from the recently completed scoping study, would be reduced based on recent metallurgical testwork, which not only lowered the grind size, but lifted recoveries.
?So, we are going to change that number as we go through the next month,? he said.
Sage said the group would replicate the strategy it used to float African Iron by retaining a 25% stake in Marampa, as well as a $1/t royalty to lock-in any future upside.
Its strategy has always been to invest in undervalued or distressed resource assets and companies and develop them to a point for a profitable sale, while retaining upside through capital returns or dividends.
?We will also be looking to take money off the table now to develop our next two projects in the country,? he said.
One possible contender for Marampa, given it is a key investor in African Minerals, is China?s Shandong Iron and Steel Group, which is due to pay for its 25% stake in African Minerals? Tonkolili project later this year.
A key selling point for Cape Lambert is access to African Minerals? newly refurbished port and rail infrastructure.
?It would be more a trade sale opportunity, but yes, everyone that has seen Tonkolili has lodged an expression of interest in Marampa,? Sage confirmed.
Total resources at Cape Lambert?s wholly owned Marampa property now total 680 million tonnes grading 28.2% iron, with total near-surface oxide material of 42Mt at 31.7% iron.
The highest grade deposits ? Matukia (34.8% iron), Rotret (36.8% iron) and Mafuri (31.5% iron) ? represent potential start-up opportunities.
Metallurgical testwork on bulk samples from two deposits has already demonstrated that the hematite can be beneficiated to a concentrate grade of 63-65% with low levels of silica, alumina and phosphorous using simple wet, high intensity magnetic separation.
Drilling completed to date covers about 60% of the known mineralised strike area at the project, but upside remains at prospects in the north and south and at Mafuri, which is open to the west.
Shares in Cape Lambert were up 3.3% or A1.5c in morning trade to 47c.
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CFE Price at posting:
46.5¢ Sentiment: Buy Disclosure: Held
(20min delay)