RNS Number : 2376F
Cape Lambert Iron Ore Limited
07 October 2008
7 October 2008
CAPE LAMBERT IRON ORE LIMITED
REPORT FOR THE QUARTER
ENDING 30 SEPTEMBER 2008
COMPANY HIGHLIGHTS
Corporate
* During the quarter, the Company successfully completed the AUD$400 million sale of its namesake magnetite project to MCC Mining
(Western Australia) Pty Ltd, a wholly owned subsidiary of Chinese conglomerate China Metallurgical Group Corporation ("MCC"). Settlement
occurred on 6 August 2008, with Cape Lambert receiving the first cash payment of AUD$240 million. The second cash payment of AUD$80 million
was received on 15 September 2008. The final cash payment of AUD$80 million is to be paid by MCC on the grant of a mining lease and related
construction approvals in respect of the project.
* Further to the successful completion of the sale and as approved by Shareholders at a general meeting on 28 July 2008, on 2 October
2008 the Company announced the timetable applicable for a AUD$100 million combined return of capital and unfranked dividend. The ex return
of capital and ex dividend date has been set at 14 October 2008 and the Record Date is 20 October 2008. The Payment Date is 24 October 2008.
* At the end of the quarter, Cape Lambert had cash reserves of approximately AUD$333 million.
* The Company continues to evaluate investment opportunities in early definition iron ore and related steel making assets. The
current turmoil being experienced in financial markets has resulted in an extensive number of opportunities being presented to the Company.
* On 16 September 2008, Cape Lambert received a copy of a notice of a general meeting of Shareholders to be convened by Power United
Limited ("Power"). Power has a shareholding of approximately 10.3% of the Company. The general meeting of Shareholders is to be held on 15
October 2008 and relates to proposed changes to the board of Cape Lambert. The Company recommends that Shareholders carefully consider the
resolutions being proposed by Power.
Cape Lambert South Project (100% interest, Pilbara, Western Australia)
* On 21 August 2008, exploration licence application EL47/1493 was granted by the Department of Industry and Resources ("DoIR"), thereby
enabling (once Native title and regulatory approval have been secured) exploration work to commence at Cape Lambert South.
* In respect of regulatory approval, a Program of Work ("PoW") for an initial 5,000m reverse circulation drilling program was submitted
to DoIR in September, with approval expected in early to mid October.
* A Native title heritage clearance of the proposed drill collars was completed on 2 October 2008.
* Drilling contractor Grimwood Davies Pty Ltd is scheduled to mobilise to Cape Lambert South and, subject to DoIR's prior approval of
the PoW, commence drilling in late October.
Marampa Iron Ore Project (30% interest and Manager, Sierra Leone, West Africa)
* During the quarter, Cape Lambert acquired a 30% interest in Marampa Iron Ore Limited, the holder of the Marampa iron ore project.
Marampa is a brownfields exploration project.
* Pursuant to the terms of the acquisition, the Company issued 44 million shares and committed to sole funding the first US$25
million toward a definitive feasibility study in respect of this project. After initial expenditure of US$5 million, the Company has the
right to withdraw without paying any further funds towards the project. In addition, the Company has been granted an exclusive option to
acquire the remaining 70% of Marampa Iron Ore Limited.
* Cape Lambert is the manager of the project. Work at Marampa over the next 12-18 months will focus on drill testing defined
geophysical gravity targets, extending the geophysical survey to define additional drill targets and metallurgical beneficiation test work,
engineering and environmental studies to enable the scope, capital cost and economics of Marampa to be defined.
Cape Lambert Iron Ore Limited ("Cape Lambert" or the "Company") (ASX: CFE, AIM: CLIO) is an Australian domiciled, cashed-up iron ore
exploration and development company, with interests in two early definition iron assets located in the Pilbara region of Western Australia
and Sierra Leone, West Africa.
The Company's objective is to use its cash reserves to invest in a portfolio of early definition iron ore and related steel making
assets and to add value to those assets to position them for either development and/or sale.
Sale of Cape Lambert magnetite project
During the quarter, the Company successfully completed the AUD$400 million sale of its namesake magnetite project (hereafter referred to
as "MCC's Magnetite Project") to MCC Mining (Western Australia) Pty Ltd, a wholly owned subsidiary of Chinese conglomerate, China
Metallurgical Group Corporation ("MCC").
Settlement occurred on 6 August 2008 ("Settlement"), with Cape Lambert receiving the first cash payment of AUD$240 million. The second
cash payment of AUD$80 million was received on 15 September 2008. Consequently, the Company has now received 80% of the AUD$400 million sale
consideration.
The final payment of AUD$80 million is to be paid by MCC on the grant of a mining lease and related construction approvals in respect of
MCC's Magnetite Project.
At Settlement, all documents, information and files relating to MCC's Magnetite Project were handed over to MCC and from Settlement, MCC
commenced managing and operating the project.
Cape Lambert is continuing to work closely with MCC, providing assistance and guidance in respect to permitting and mining approvals to
enable the grant of a mining lease and related construction approvals in the shortest possible time frame.
Return of Capital and Unfranked Dividend
Further to the successful completion of the sale and, as approved by Shareholders at a general meeting on 28 July 2008, on 2 October
2008 the Company announced the timetable applicable for a AUD$100 million combined return of capital and unfranked dividend. The return of
capital and unfranked dividend will comprise 31.25% and 68.75% respectively of the AUD$100 million.
The ex return of capital and ex dividend date has been set at 14 October 2008 and the Record Date is 20 October 2008. The Payment Date
is 24 October 2008. Option holders who wish to participate in the return of capital and unfranked dividend will need to have converted their
options to fully paid shares in the Company by 14 October 2008.
The Company via its share registry, Computershare Investor Services Pty Limited, has dispatched to registered Shareholders documentation
requesting tax file number disclosure. The Company requests that the tax file disclosure documentation is completed and returned to
Computershare as soon as practicable.
Cape Lambert South Project (100% interest, Pilbara, Western Australia)
On 21 August 2008, exploration licence application EL47/1493 was granted by the Department of Industry and Resources ("DoIR").
EL47/1493, which has an area of approximately 35km2, is immediately south of, and the extension to, MCC's Magnetite Project and has an
identified 3km long, untested, magnetic anomaly located on the eastern margin.
A Program of Work ("PoW") for an initial 5,000m reverse circulation ("RC") drilling program was submitted to DoIR in early September and
is expected to be approved in early to mid October.
The initial drilling program has been designed to confirm the presence and extent of magnetite iron mineralisation. A second infill
program, which is subject to the success of the initial program, is planned for March/April 2009, with the objective of providing sufficient
geological information and confidence to enable completion of a mineral resource estimate.
A Native title heritage clearance of the proposed drill collars was completed on 2 October 2008.
Drilling contractor, Grimwood Davies Pty Ltd, is scheduled to mobilise an RC drill rig to site late October and, subject to DoIR's prior
approval of the PoW, commence drilling thereafter.
Marampa Iron Ore Project (30% interest and Manager, Sierra Leone, West Africa)
During the quarter, Cape Lambert acquired a 30% interest in Marampa Iron Ore Limited, the holder of the Marampa iron ore project
("Marampa") located near the town of Lunsar in Sierra Leone, West Africa.
Pursuant to the terms of the acquisition, the Company issued 44 million shares and committed to sole funding the first US$25 million
toward a definitive feasibility study in respect of Marampa. After initial expenditure of US$5 million, the Company has the right to
withdraw without paying any further funds towards Marampa. In addition, the Company has been granted an exclusive option to acquire the
remaining 70% of Marampa Iron Ore Limited for US$200 million less the value of the shares issued by the Company at settlement (being
US$13,170,266.51) and US$25 million. The Option may be exercised by Cape Lambert up to the earlier of the date falling 3 months immediately
after the finalisation of a definitive feasibility study; and the date 20 months from the date of completion of the transaction.
Cape Lambert is the Manager of Marampa.
Marampa is a brownfields exploration project located on Exploration Licence EXPL09/06, which covers an area of approximately 319km2.
EXPL09/06 completely encloses, but excludes, the former Development Company of Sierra Leone ("DELCO") mining operation. DELCO mined and
exported iron ore from the Marampa area from 1933 through to its closure in 1975, due to depressed commodity prices.
Iron mineralisation at Marampa consists of specular hematite schists, which feature variable iron grades in the range of 25% to 35%.
Historically, the hematite schists have been concentrated to saleable Fe concentrates using crushing, coarse grinding and gravity
separation.
Marampa is connected to an existing deep water port, stockpile area and shiploader at Pepel via an 84km narrow gauge railway.
Several tailings dams are located on EXPL09/06, which originate from the former DELCO mining operations. An opportunity exists to
retreat these tailings as part of any future mining operation.
Cape Lambert intends to follow a three pillared strategy for Marampa over the next 12-18 months comprising;
* Air core drilling of the tailings and drill testing the defined geophysical 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. Earlier gravity surveys were
limited in extent, and defined by the initial interpretation of a magnetic survey; and
* Completing metallurgical beneficiation test work, engineering and environmental studies to enable the scope, capital cost and
economics of Marampa to be defined.
Set out below is the quarterly cash flow report for the quarter ending 30 September 2008.
A copy of the ASX release, including figures, can be viewed on the Company's website at www.capelam.com.au.
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
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
CAPE LAMBERT IRON ORE LTD
ABN Quarter ended ("current quarter")
71 095 047 920 30 September 2008
Consolidated statement of cash flows
Current quarter Year to date
Cash flows related to operating activities $A'000 (12 months)
$A'000
1.1 Receipts from product sales and - -
related debtors
1.2 Payments for
(a) exploration and evaluation (371) (371)
(b) development
(c) production
(d) administration - -
- -
(3,218) (3,218)
1.3 Dividends received
1.4 Interest and other items of a
similar nature received 1,746 1,746
1.5 Interest and other costs of finance
paid
1.6 Income taxes paid
1.7 Other : Cape Lambert Iron Ore 315,000 315,000
project sale (30,400) (30,400)
Other
Net Operating Cash Flows 282,757 282,757
Cash flows related to investing
activities
1.8 Payment for purchases of:
(a)prospects - -
(b)equity investments (470) (470)
(c) other fixed assets (2) (2)
1.9 Proceeds from sale of:
(a)prospects - -
(b)equity investments - -
(c)other fixed assets - -
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other - Convertible Notes (750) (750)
1
Net investing cash flows (1,222) (1,222)
1.13 Total operating and investing cash
flows (carried forward) 281,535 281,535
1.13 Total operating and investing cash flows (brought
forward) 281,535 281,535
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 35,210 35,210
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other - repayment of issue proceeds - -
* costs of share issues
- -
Net financing cash flows
35,210 35,210
Net (decrease) in cash held 316,745 316,745
1.20 Cash at beginning of quarter/year to date 16,137 16,137
1.21 Exchange rate adjustments to item 1.20 - -
1.22 Cash at end of quarter 332,882 332,882
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
Current quarter
$A'000
1.23 Aggregate amount of payments to the parties included 1,762
in item 1.2
1.24 Aggregate amount of loans to the parties included in
item 1.10
1.25 Explanation necessary for an understanding of the transactions
Executive and non executive directors salaries and bonuses
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a
material effect on consolidated assets and liabilities but did not
involve cash flows
2.2 Details of outlays made by other entities to establish or increase their
share in projects in which the reporting entity has an interest
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available Amount used
$A'000 $A'000
3.1 Loan facilities - -
3.2 Credit standby arrangements - -
Estimated cash outflows for next quarter
$A'000
4.1 Exploration and evaluation 5,000
4.2 Development -
5,000
Total
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated Current quarter Previous quarter
statement of cash flows) to the related items in the accounts is as follows. $A'000 $A'000
5.1 Cash on hand and at bank 694 16,161
5.2 Deposits at call 332,188 -
5.3 Bank overdraft - -
5.4 Other (provide details) - -
Total: cash at end of quarter (item 1.22) 332,882 16,161
Changes in interests in mining tenements
Tenement reference Nature of interest Interest at Interest at end of
(note (2)) beginning of quarter quarter
6.1 Interests in mining E47/1233 Reduced/Sold 100% 0%
tenements E47/1248 Reduced/Sold 100% 0%
relinquished, E47/1271 Reduced/Sold 100% 0%
reduced or lapsed E47/1462 Reduced/Sold 100% 0%
6.2 Interests in mining E47/1493 Acquired 0% 100%
tenements acquired
or increased
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number quoted Issue price per Amount paid up per
security (see note security (see note
3) (cents) 3) (cents)
7.1 Preference
+securities
(description)
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns of
capital, buy-backs,
redemptions
7.3 +Ordinary securities 440,054,092 440,054,092
7.4 Changes during
quarter
(a) Increases
through issues 117,501,057 117,501,057
(b) Decreases
through returns of
capital, buy-backs
7.5 +Convertible debt
securities
(description)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through securities
matured, converted
7.7 Options Exercise price Expiry date
(description and
conversion factor) 42.7 cents
100,000 - 22 October 2008
31 October 2008
27.7 cents 31 October 2010
30,136,134 30,136,134 30 June 2009
37.7 cents
28,000,000 -
$1.40
3,300,000 -
7.8 Issued during
quarter 8,350,000 - 50.0 cents 30 June 2010
7.9 Exercised during 400,000 - 42.7 cents 22 October 2008
quarter 31 October 2008
31 October 2009
67,101,057 - 27.7 cents
50,000,000 - 32.7 cents
7.10 Expired during
quarter 3,300,000 - 90.0 cents 30 June 2008
7.11 Debentures
(totals only)
7.12 Unsecured notes
(totals only)
Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations
Act or other standards acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: ................................................................. Date: 7 October 2008
(Director/Company secretary)
Print name: ......Timothy Turner.............................................
Notes
1 The quarterly report provides a basis for informing the market how the entity's activities have been
financed for the past quarter and the effect on its cash position. An entity wanting to disclose
additional information is encouraged to do so, in a note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining
tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint
venture agreement and there are conditions precedent which will change its percentage interest in a
mining tenement, it should disclose the change of percentage interest and conditions precedent in the
list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and
7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB
1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards
for foreign entities. If the standards used do not address a topic, the Australian standard on that topic
(if any) must be complied with.
== == == == ==
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The company news service from the London Stock Exchange
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