The 70 per cent sale of Leederville-based iron ore firm Cape Lambert Iron Ore Ltd's namesake project is on track, after an independent geologist confirmed a minimum indicated mineral resource of 300 million tonnes at the site, the company has announced.
The 70 per cent sale of Leederville-based iron ore firm Cape Lambert Iron Ore Ltd's namesake project is on track, after an independent geologist confirmed a minimum indicated mineral resource of 300 million tonnes at the site, the company has announced.
The company will seek shareholder approval for the sale at an extraordinary general meeting to be held on July 16.
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") is on track to complete the partial sale of its 100 per cent owned Cape Lambert Iron Ore Project, located in the Pilbara region of Western Australia, following the satisfaction of one of the final conditions precedent to a sale agreement with a Chinese investor.
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. The sale agreement requires the satisfaction of several conditions precedent, including verification by an independent geologist of a minimum Indicated Mineral Resource of 300 million tonnes.
Independent geologists RSG were appointed by Mr Ding Liguo to complete this task and in the past 24 hours have completed their review and advised the Company of its findings.
RSG has confirmed that the Indicated component of its mineral resource estimates exceeds the minimum requirement of 300 million tonnes. As such the company has satisified one of the final conditions precedent to the sale agreement.
The final condition precedent to be satisfied as part of this sale agreement is shareholder approval. The company expects to receive this at an EGM to be held on 16 July 2007.
Commenting on the confirmation by RSG Global of the minimum Indicated Resource at the project Cape Lambert Executive Director Tony Sage said:
"We are one step away from 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."
"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.
"We expect our shareholders to overwhelmingly support this sale agreement as it will provide significant upside to them not only as this project develops, but also as the company acquires and develops further iron ore projects.
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.
