Cape Lambert to cut staff, costs

Perth-based mining developer Cape Lambert Resources has announced it is cutting 117 jobs and postponing a planned dividend payment, in response to the sharp downturn in the iron ore market.

The news sent the company’s share price tumbling this morning, falling 16.6 per cent to 7.5 cents per share before 10:30am.

In a statement, the company said a range of cost reduction measures included reducing its full time workforce at both its head office and across its operations.

“Cape Lambert has also reduced exploration activities across its portfolio of assets and placed some non-core assets on care and maintenance,” the company said.

A spokesperson from Cape Lambert confirmed that is was company's West African assets which would be put on care and maintenance.

"In Western Australia we've reduced our operations team from 12 down to four," the spokesperson said.

Cape Lambert has estimated $3.5 million per annum would be saved through the cost cutting measures.

The company also said it would postpone a second dividend payment of 2 cents per share to shareholders, which was scheduled for the end of February.

The dividend was announced after Chinese company MCC paid $51.6 million in cash to Cape Lambert to settle a dispute.

Executive chairman Tony Sage emphasised that it was a postponement and not a cancellation.

“We have seen a sharp drop in the iron ore price in recent months, coupled with a downturn in market conditions for the mining sector as a whole,” he said.

“With these factors in mind, Cape Lambert believes it is prudent capital management to find genuine cost savings across its business and postpone the second dividend payment.”

Cape Lambert holds several tenements in Sierra Leone, West Africa, including its Marampa iron ore project which is currently in the development and permitting stage.

It also has full interests in the Kukuna and Sandenia iron ore projects in West Africa, however, both are currently on care and maintenance.

According to the company’s most recent quarterly report, no exploration activities have been conducted at its exploration permit area in the Pilbara and it has decided to divest the project.