Cape Lambert finalises $250m namesake project sale

The part sale of Leederville-based Cape Lambert Iron Ore Ltd's namesake asset to Chinese investor Ding Liguo for around $250 million won shareholder approval today, clearing the last hurdle for the company restructure.

The full text of a company announcement is pasted below

Iron ore exploration and development company, Cape Lambert Iron Ore Limited ("Cape Lambert:" or "the company") will move to finalise the partial sale of its 100 per cent owned Cape Lambert Iron Ore Project, located in the Pilbara region of Western Australia, following shareholder approval for the transaction which was received at an Extraordinary General Meeting (EGM) held earlier today.

On 27 March 2007 the Company announced it had entered into a sale agreement with Mr Ding Liguo to sell 70% of the Cape Lambert iron ore project for approximately AUD$250 million in cash.

Commenting on the overwhelming support given to the transaction by shareholders today Cape Lambert Executive Director Tony Sage said:

"This is one of the biggest transactions in the life of Cape Lambert Iron Ore. The company will receive approximately $250m for selling seventy per cent of the project."

"Our shareholders have provided overwhelming support to this transaction, they realise that this will provide the impetus and more importantly the financial capability for the company to grow into a leading iron ore exploration and development company.

"Importantly we will retain a significant stake in the project and play an important part as this project develops towards production. We believe this project will be significant in terms of the scale of the project and what it will provide the state, and are pleased to have retained an interest in it.

Under the terms of the sale agreement Mr Ding Liguo will pay Cape Lambert 30% of the sale price (approx AUD $75 million) at settlement of the transaction, which is likely to be August 2007, with a further 55% (approx AUD $138 million) of the sale price being paid three months after that date. The final installment, being 15% will be paid on completion of the BFS and commencement of construction.