REPORT FOR THE QUARTER ENDED 31 DECEMBER 2008
20 Gennaio 2009 - 8:00AM
UK Regulatory
TIDMCLIO
RNS Number : 9146L
Cape Lambert Iron Ore Limited
20 January 2009
20 January 2009
CAPE LAMBERT IRON ORE LIMITED
Report for the Quarter ended 31 december 2008
COMPANY HIGHLIGHTS
Corporate
* During the quarter, the Company successfully completed a AUD$100 million
combined return of capital and unfranked dividend distribution to shareholders
equating to AUD$0.217 per share, which comprised;
*
* A return of capital of AUD$0.068 per share; and
* An unfranked dividend of AUD$0.149 per share.
* As at 19 January 2009, Cape Lambert had cash reserves of approximately AUD$223
million.
* Cape Lambert is continuing to work closely with China Metallurgical Group Corporation, 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, thereby enabling receipt of the final cash payment of AUD$80 million.
* Mezzanine financings totalling AUD$7.8 million via secured convertible notes at
a 12% coupon rate were provided to ASX listed, iron ore exploration company DMC
Mining Limited (ASX: DMM), uranium explorer Scimitar Resources Limited (ASX:
SIM) and coal development company, Continental Capital Ltd (ASX:
CNF). Cape Lambert is evaluating other convertible note opportunities that
potentially enable it to convert to a controlling equity position.
* 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.
Cape Lambert South Project (100% interest, Pilbara, Western Australia)
* During the quarter, the Company completed an initial drilling program at Cape
Lambert South, which is located in the coastal Pilbara region of Western
Australia. The completed program comprised 14 reverse circulation ("RC") drill
holes for a total advance of 4,107 metres and a single diamond hole (375m).
* Within the central portion of the magnetic anomaly, magnetite
banded-iron-formation, with down-hole intervals of between 35 and 73 metres, was
logged in 4 RC holes and the diamond hole over a strike length of approximately
1.8km. Assay results and Davis Tube Recovery tests for these intervals and the
other drill holes are pending, with first results expected at the end of January
2009.
Marampa Iron Ore Project (30% interest and Manager, Sierra Leone, West Africa)
* Planning and definition of the initial work program, including recruitment of
several expatriate project management personnel, completed for Marampa Iron Ore
Project (Sierra Leone).
* Initial work program at Marampa has commenced, which will involve regional mapping, geophysics, drilling and metallurgical test work on the tailings (including recovery of a bulk sample for pilot scale work in Australia) and drill testing of the known geophysical anomalies.
Report for the Quarter ended 31 December 2008
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 (refer Figure
1).
The Company's objective is to use its substantial 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.
Return of Capital and Unfranked Dividend
During the quarter, the Company successfully completed a AUD$100 million
combined return of capital and unfranked dividend distribution to shareholders
equating to AUD$0.217 per share, which comprised;
* A return of capital of AUD$0.068 per share; and
* An unfranked dividend of AUD$0.149 per share.
The distribution was made following shareholder approval on 28 July 2008 and the
successful completion of the AUD $400 million sale of the Company's namesake
magnetite project to MCC Mining (Western Australia) Pty Ltd, a wholly owned
subsidiary of Chinese conglomerate China Metallurgical Group Corporation
("MCC").
Project Sale - Final Cash Payment
In respect of the sale of its namesake magnetite project, the Company has
received AUD$320 million of the AUD$400 million sale price, with the final cash
payment of AUD$80 million to be paid by MCC on the grant of a mining lease and
related construction approvals in respect of 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 thereby enabling receipt of the final AUD$80 million cash payment.
Mezzanine Financings
During the quarter, and through its 100% owned subsidiary Dempsey Resources Pty
Ltd ("Dempsey"), the Company provided mezzanine financings totalling AUD$7.8
million via secured convertible notes to ASX listed, iron ore exploration
company DMC Mining Limited (ASX: DMM), uranium explorer Scimitar Resources
Limited (ASX: SIM), and coal development company, Continental Capital Ltd (ASX:
CNF) (the "Notes"). For all Notes, interest is payable quarterly at a rate of
12% per annum. The face value and term of the Notes vary as set out below;
* AUD$2.0 million with a term of 12 months for DMM;
* AUD$2.3 million with a term of 15 months for SIM; and
* AUD$3.5 million with a term of 24 months for CNF.
Pursuant to the terms of the convertible notes, Dempsey has the right before the
repayment dates to convert the Notes into ordinary shares.
Peter Landau, a non-executive director of Cape Lambert, is Executive Chairman
and Company Secretary of CNF.
Cape Lambert is evaluating other convertible note opportunities that potentially
enable it to convert to a controlling equity position in resource companies with
assets which the Company believes to be attractive.
Cape Lambert South Project (100% interest, Pilbara, Western Australia)
The Company completed an initial drilling program at Cape Lambert South, which
is located in the coastal Pilbara region of Western Australia (refer Figure 2).
This initial drilling program, which comprised 14 reverse circulation
("RC") drill holes for an advance of 4,107m and a single diamond hole (375m),
was designed to confirm the presence and extent of magnetite iron
mineralisation.
Within the central portion of the magnetic anomaly, magnetite
banded-iron-formation, with down-hole intervals of between 35 and 73 metres, was
logged in 4 RC holes (SRC04, SRC06, SRC12 and SRC14) and the diamond hole (DD1)
over a strike length of approximately 1.8km (refer Figure 3).
Follow-up drilling is planned to commence at Cape Lambert South in late March
2009, following the end of the Pilbara cyclone season.
At the completion of the program, the Company had submitted approximately 440
samples for Davis Tube Recovery ("DTR") test work. First DTR results for the
program are expected to be received at the end of January 2009.
Marampa Iron Ore Project (30% interest and Manager, Sierra Leone, West Africa)
On 1 October 2008, Cape Lambert made a 30% investment in the Marampa Iron Ore
project ("Project") located in Sierra Leone, West Africa (refer Figure 4).
Pursuant to the terms of its investment, Cape Lambert is the Manager of the
Project.
During the quarter, the Company completed planning and definition of the initial
work program, including recruitment of several expatriate project management
personnel, who have now mobilised to the Project.
The initial work program will involve regional mapping, geophysics, drilling and
metallurgical test work on the tailings (including recovery of a bulk sample for
pilot scale work in Australia) and drill testing of the known geophysical
anomalies.
A full version of this announcement including maps, tables and figures is
available on the Company's website 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
Conduit PR:
Jos Simson +44 (0)20 7429 6603/+44 (0)7899 870 450
Gareth Tredway +44 (0)20 7429 6612
Website: www.capelam.com.au
Competent Persons Attributes:
The Metallurgical information in this report is based on information compiled by
GV Ariti who is a Member of The Australasian Institute of Mining and Metallurgy.
Mr. Ariti has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the 2004
Edition of the "Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves". Mr. Ariti consents to the inclusion in this report
of the matters based on his information in the form and the context in which it
appears.
The Exploration information in this report is based on information compiled by K
Bischoff who is a Member of The Australasian Institute of Mining and Metallurgy.
Mr. Bischoff has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the 2004
Edition of the "Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves". Mr. Bischoff consents to the inclusion in this
report of the matters based on his information in the form and the context in
which it appears.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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