Cape Lambert Iron Ore and disgruntled shareholder Mick Shemesian are headed for the courts after the WA miner refused last night to give a written undertaking not to push ahead with a potential $US200 million ($249 million) investment in a Sierra Leone hematite project.
It is expected that Mr Shemesian’s lawyer, Martin Bennett, will seek a court injunction this morning to prevent Cape Lambert pushing ahead with the controversial deal, which will involve issuing a 9 per cent equity stake in the WA miner to a London company controlled by colourful entrepreneur Frank Timis.
The proposed deal with Mr Timis’ company, African Minerals, would be the first meaningful one since Cape Lambert agreed to the $400 million sale of its former flagship Pilbara magnetite project earlier this year.
But if the injunction is granted, Cape Lambert could be prevented from finalising the deal with African Minerals over the Marampa hematite asset — originally slated for the end of this month — and wait until a shareholder meeting is called.
Mr Shemesian, who controls 11.4 per cent of the WA miner, has demanded a shareholder vote on the Marampa deal, claiming it was a significant transaction that could deliver “a potentially controlling interest” in Cape Lambert to Mr Timis’ company.
His attack on Cape Lambert, which observers have described as part of a battle between Mr Shemesian and Mr Timis, includes requisitioning a shareholder meeting to roll most of the WA miner’s board, including executive chairman Tony Sage. In their place Mr Shemesian has nominated Mr Bennett and Melbourne identity Leo Khouri.
The meeting is scheduled for October 15 although, barring the injunction, Cape Lambert is hopeful of having settled the Marampa deal by then and also of having struck a truce with another disgruntled shareholder, Russian steel giant Evraz.
Mr Sage and fellow directors under attack, Brian Maher and Tim Turner, wrote to shareholders yesterday urging them to reject Mr Shemesian’s push and suggesting it was designed to wrest control of Cape Lambert’s $340 million cash pile on the cheap.
“We strongly refute the suggestion that the investment in Marampa poses a risk to the current or future ownership structure of the company,” the directors said. “We believe significant shareholders (Mr Shemesian) and Evraz (16.5 per cent) pose a greater potential risk to the effective control of the company.”
Cape Lambert shares lost a further 2¢ to close at 36¢, valuing the miner at $158.2 million compared with its $340 million cash backing.
PETER KLINGER
CFE Price at posting:
18.3¢ Sentiment: Hold Disclosure: Held
