Cape Lambert plans project update

Investors are expecting an update from Cape Lambert Iron Ore Ltd on its negotiations with Chinese partners in its planned iron ore project in the Pilbara.

The company requested a trading halt today pending an announcement next week.

It follows negotations with Chinese group Shandong Yuansheng International Trading Co Ltd over the on market purchase of a significant equity stake in Cape Lambert.

It said last month that Shandong could acquire up to 50 million shares or 19.9 per cent of the issued capital in Cape Lambert.

The acquisition of equity was a condition Cape Lambert had set as part of an original agreement reached with Shandong to have "first right of refusal" to negotiate an off-take agreement at the Cape Lambert Iron Ore Project.

Shandong have indicated they will buy the equity stake on market after other options including participation in a private placement and a sell down by other major shareholders were neither possible or suitable at this time.

Cape Lambert and Shandong are also negotiating to finalise an off-take agreement though Shandong is still committed to take all the iron ore concentrate that may be produced by the project.

In addition, Cape Lambert has advised negotiations with another major Chinese group are still on-going.

The trading halt is to be lifted on Tuesday morning.