Cape Lambert Resources has signed a deal to formalize ownership and access rights to key infrastructure in Sierra Leone to transport iron ore from its Marampa project.
Cape Lambert Resources has signed a deal to formalize ownership and access rights to key infrastructure in Sierra Leone to transport iron ore from its Marampa project.
The Tony Sage-led company will pay $US45 million to African Minerals to acquire a 33 per cent interest in the Marampa railway and Pepel Port by funding 33 per cent of refurbishment costs.
African Minerals has a 99 year lease over Marampa Infrastructure.
In a statement Cape Lambert said that refurbished railway will have the capacity to transport approximately 10 million tonnes per annum.
African Minerals has advised Cape Lambert that the refurbishment is expected to be completed in the March 2011 calendar quarter.
Once refurbishment of the Marampa Infrastructure is complete, Cape Lambert will have rights to a minimum throughput of 2 million tonnes per annum.
Commenting on the transaction Cape Lambert executive chairman, Tony Sage said "a key aspect in the development of any bulk commodity project is access to suitable infrastructure."
"This agreement ensures the Marampa iron ore project has access to suitable infrastructure, which we expect will provide a significant value uplift when we come to sell the project," Mr Sage said.
See full company statement below:
Cape Lambert's wholly owned Marampa iron ore project is connected to the deepwater port, stockpiling and ship loading facility located at Pepel via the 84km Marampa railway.
Cape Lambert has now signed a term sheet with African Minerals, which has a 99-year lease over the Marampa Infrastructure. The agreed term sheet provides for Cape Lambert to hold a 33% equity interest in the Marampa infrastructure, with African Minerals holding 57% and the Government of Sierra Leone holding 10% interests respectively. African Minerals, through a special purpose infrastructure vehicle, will oversee the refurbishment of, and operate on a day-to-day basis, the Marampa Infrastructure and will provide Cape Lambert with performance and other warranties typical of a contractor-principal relationship.
African Minerals has agreed to fix the cost to Cape Lambert and to provide a 10% discount, subject to the Company pre-paying its contribution. The agreed, fixed contribution from Cape Lambert is US$45 million, which will be funded from existing cash reserves and asset realisations.
African Minerals has advised Cape Lambert that the refurbishment of the Marampa Infrastructure is expected to be completed in the March 2011 calendar quarter. Once refurbishment of the Marampa Infrastructure is complete, Cape Lambert will have rights to a minimum throughput of 2 Mtpa.
Longer term, African Minerals is proposing to construct a new railway line to link its Tonkolili iron ore project with a new port at Tagrin ("Tonkolili Infrastructure") at which time it will cease using the Marampa Infrastructure. Cape Lambert has been granted an option to match any third party offer to acquire African Minerals' stake in the Marampa Infrastructure, which can be exercised once the Tonkolili Infrastructure is operational.
Commenting on the transaction Cape Lambert Executive Chairman, Mr Tony Sage, said "a key aspect in the development of any bulk commodity project is access to suitable infrastructure."
"This agreement ensures the Marampa iron ore project has access to suitable infrastructure, which we expect will provide a significant value uplift when we come to sell the project," Mr Sage added.
The transaction is subject to the fulfilment of the following conditions:
- agreement of and the entering into of formal legal documentation within 90 days relating to the access and ownership of the Marampa Infrastructure,
- receipt of all necessary regulatory consents; and
- the consent of the Government of Sierra Leone
