Just a week after striking a $50 million agreement to develop an African project, Cape Lambert Iron Ore Ltd has struck its first hiccup with the deal.
Just a week after striking a $50 million agreement to develop an African project, Cape Lambert Iron Ore Ltd has struck its first hiccup with the deal.
The party on the other side of the transaction, London-listed African Minerals Ltd, has become embroiled in a public and potentially legal stoush with another company regarding the iron ore deposit in Sierra Leone.
But Cape Lambert chairman Tony Sage dismissed talk of legal action over the deposit as of no concern.
Mr Sage said, however, that he would be ensuring that his company’s position was safe guarded when a final agreement was drawn up with African Minerals, a company in the stable of his London-based business colleague Frank Timis.
Cape Lambert announced last week that it had struck the deal with African Minerals to acquire 30 per cent of the Marampa iron ore project for 44 million shares (approximately 10 per cent of Cape Lambert’s issued capital) and $US25 million ($31 million) to fund a definitive feasibility study.
The WA company, which recently sold its namesake Pilbara project to the Chinese for $400 million (of which $240 million has been received to date) has also negotiated the right to buy the Marampa project outright for a total price of $US200 million ($250 million).
But overnight on Tuesday African Minerals was forced to provide an explanation to investors on the London Stock Exchange’s Alternative Investments Market about reported allegations from London Mining plc, another company with leases in the area.
Press reports at the weekend had outlined a dispute over the territory claimed by African Minerals.
“It is African Minerals' view that the basis for London Mining's allegations is inaccurate and completely without foundation,” African Minerals said in an announcement responding to an article in London publication The Sunday Times, having suspended its shares from trading.
“Any legal action against African Minerals by London Mining will be robustly defended.
“On a number of occasions the Government of Sierra Leone has confirmed to African Minerals and to London Mining that African Minerals' co-ordinates in respect of African Minerals' Exploration Licence EXPL 09/06 are valid and that London Mining's claims to land outside their Mining Lease (ML 02/05) are invalid.”
Mr Sage said the dispute was with regard to the boundary of a lease London Mining holds over part of the same deposit.
He said that Sierra Leone government records were very clear about the boundaries but Cape Lambert’s agreement with African Minerals would detail what was being bought and have buy back provisions in the event of any problems.
“Our deal is completely subject to the boundaries being verified by the courts in Sierra Leone,” Mr Sage said.
