CLIO Cape Lambert

    RNS Number : 8135E
  Cape Lambert Iron Ore Limited
  01 October 2008
   

    1 October 2008
    Cape Lambert Iron Ore Limited
    Cape Lambert completes 30% investment in Marampa, Hematite Iron Ore Project
    Issue of Shares and Notice of Significant Shareholder
    Key points:
    *     Completion of 30% investment in Marampa Iron Ore Limited, owner of the Marampa Iron Ore Project in Sierra Leone, West Africa.
    *     Exclusive option to acquire remaining 70% interest in Marampa Iron Ore Limited, resulting in the Company being the 100% owner of
the Marampa Iron Ore Project.
    *     The Company has the right to withdraw from the transaction upon expending an initial US$5million.
    Australian domiciled iron ore company Cape Lambert Iron Ore Limited ("Cape Lambert" or the "Company") (ASX: CFE, AIM: CLIO) has today
formalised an agreement relating to the 30% investment in Marampa Iron Ore Limited ("Marampa"), a wholly owned subsidiary of African
Minerals Limited ("African Minerals") (AIM: AMI) and owner of the Marampa Iron Ore project ("Marampa Project") in Sierra Leone.
    The formalisation of this agreement is further to the conditional agreement, announced on 2 September 2008, and follows the completion
of all necessary legal and technical due diligence tasks associated with the investment.
    Under the terms of the agreement, Cape Lambert has today issued 44 million shares in the Company (representing 9.1% of the Company) to
African Minerals and has committed to invest, subject to paragraphs (a), (d) and (e) below, US$25million in the Marampa Project to fund a
definitive feasibility study. 
    Other key terms of the investment are as follows:
    *     A commitment to contribute US$25million to fund a definitive feasibility study of the Marampa Project will be in accordance with
an agreed monthly calling schedule applicable to the Marampa Project, which shall be agreed by the parties. If the feasibility study costs
in excess of US$25million, the Company and African Minerals will contribute to the excess cost pro rata to their respective shareholding in
Marampa. The Company will contribute an initial US$5million upon completion occurring.
    *     The Company has the right, in its sole discretion, to withdraw from the transaction upon expending an initial US$5million. If the
Company exercises this right, it shall retain a pro-rata interest in Marampa and will have no further expenditure obligations, other than to
make contributions pro-rata to its shareholding in Marampa. 
    *     The shares issued to Marampa in consideration for the acquisition will not be entitled to participate in any capital reduction or
dividend announced by the Company on 18 August 2008 and proposed to be paid to shareholders in October 2008.
    *     The Agreement provides Cape Lambert with the right to terminate the Agreement if the exploration licence upon which the Marampa
Project is located is revoked, rescinded, terminated or cancelled, or its boundary or area is materially and adversely changed in any manner
whatsoever within 12 months of the date of completion of the Agreement. Upon the Company exercising its right to terminate, the parties have
an obligation to do all that is possible to unwind the transaction, including the repayment of all funds paid by the Company under the
Agreement and the buy back and cancellation of all shares issued under the Agreement for nominal consideration. To this end, a separate
share buy back agreement, which is subject to shareholder approval, has been executed by the parties.
    *     Subject to the Government of Sierra Leone and African Minerals finalising a 99 year lease for the Pepel Port and railway
connecting the Marampa Project to the Port, African Minerals has agreed to grant access rights to Marampa to this infrastructure. However,
in the event African Minerals is unable to grant such rights to Marampa within 12 months of the date of completion, the Company may
terminate the Agreement with the same effect as that described in paragraph (d).
    *     As a result of the provisions referred to in paragraphs (d) and (e), the shares to be issued to African Minerals will be subject
to a 12 month voluntary escrow period. 
    *     Initially, Cape Lambert Chairman Tony Sage and senior technical advisor Joe Ariti will be appointed to the Board of Directors of
Marampa, thereby giving the Company 50% Board representation. 
    *     The Company has been granted an exclusive option to acquire the remaining 70% in Marampa (resulting in the Company holding a 100%
interest in the Marampa Project) in consideration for US$200 million, less the value of the consideration paid by the Company on completion
of the 30% acquisition, which may be satisfied in cash, shares or a combination of both. The option may be exercised by the Company either
three (3) months immediately after the finalisation of the definitive feasibility study or the date 20 months from the completion date
(whichever is the earlier).
    *     The Agreement includes usual representations, warranties and indemnities provided by African Minerals and Marampa.
    Marampa Project and Infrastructure
    A summary of the Marampa Project and nearby infrastructure has previously been provided to the market. Please refer to the Company's
announcement dated 2 September 2008. 
    Strategy
    Cape Lambert and African Minerals intend to follow a three pillared strategy for the Marampa Project over the next 12-18 months
comprising;
    *     Drill testing the defined anomalous gravity targets, with the objective of delineating a JORC compliant mineral resource.
    *     The extension of gravity surveys to cover prospective areas within the 20km long regional structure. Reconnaissance drilling has
confirmed the validity of gravity for defining drill targets and its coverage will be extended to define further drill targets and provide
an assessment of the potential mineralised inventory.
    *     Completing metallurgical test work, engineering and environmental studies to enable the scope, capital cost and economics of the
Marampa Project to be defined.
    Application to the London Stock Exchange has been made for the 44,000,000 new Ordinary Shares issued today to be admitted to trading on
AIM ("Admission") and it is expected that Admission will become effective on 7 October 2008. Following the issue of these shares the Company
has 484,054,092 fully paid ordinary shares in issue. Set out below is a notice pursuant to Section 708A(5) of the Corporations Act.
    FOR MORE INFORMATION PLEASE CONTACT: 
    Cape Lambert Iron Ore Limited: 
    Tony Sage +61 (0)8 9380 9555 

    Australian Enquiries: 
    Professional Public Relations 
    David Tasker +61 (0)8 9388 0944/ +61 433 112 936 

    UK Enquiries: 
    Nominated Adviser: 
    Grant Thornton UK LLP 
    Fiona Owen +44 (0)20 7383 5100 

    AIM Broker: 
    Collins Stewart Europe Limited 
    Adrian Hadden +44 (0)20 7523 8353 
    Oliver Quarmby +44 (0) 20 7523 8354 

    Conduit PR: 
    Jos Simson +44 (0)20 7429 6603/+44 (0)7899 870 450 
    Jane Stacey +44 (0)20 7429 6606 

    Website: www.capelam.com.au

    Notice under Section 708A

    Cape Lambert Iron Ore Limited ( "the Company") issued on 1 October 2008, 44,000,000 shares as consideration pursuant to an agreement
with African Minerals Limited and Marampa Iron Ore Limited ("Marampa") whereby the Company has agreed acquire a 30% interest in Marampa. The
securities are part of a class of securities quoted on ASX Limited ("ASX"). 
    The Company gives this notice pursuant to Section 708A(5) of the Corporations Act. 
    The shares were issued without disclosure to investors under Part 6D.2, in reliance on Section 708A(5) of the Corporations Act. 
    The Company, as at the date of this notice, has complied with:
    *     the provisions of Chapter 2M of the Corporations Act; and
    *     Section 674 of the Corporations Act. 
    There is no excluded information for the purposes of Sections 708A(7) and (8) of the Corporations Act.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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