Cape Lambert to sell Lady Annie for $135m
Cape Lambert Resources Limited (CFE) shares climbed Friday morning after the company said its has entered into an agreement with Hong Kong company China Sci-Tech Holdings Limited (“CST”), for the sale of its 100% interest in the Lady Annie Project in Queensland for $135 million. The Australian iron ore explorer said CST is proposing to fund the acquisition from existing cash reserves and liquid assets.
Cape Lambert said in addition to the total consideration, CST would reimburse Cape Lambert agreed care and maintenance expenditure incurred at Lady Annie for up to $3 million and also receive approximately $13 million of cash back from the release of environmental and other bonds related to Lady Annie.
The company said the sale is expected to complete on or before 31 May 2010, at which point executive chairman, Tony Sage said the company would be in a position to finalise its plans regarding a partially franked dividend payment.
“It is our intention to return between $0.08 and $0.10 per share to shareholders once the sale completes and the $130 million in cash is received,” Mr Sage said.
Upon completion of the sale, Cape Lambert said its cash and receivables position would be about $300 million, not including the mark-to-market value of its listed securities of approximately $70 million.
“In the end we felt a trade sale was the best outcome for shareholders and stakeholders given capital markets remain choppy, and may continue to do so for the medium run,” Mr Sage added.
"China Sci-Tech has a very clear focus and complimentary financial capacity to return Lady Annie to production in the short term and we believe this is in the best interests of the various stakeholders associated with the project.”
The company said completion of the transaction remains subject to a number regulatory approvals.
AS at 1050 AEDT, Cape Lambert shares were up 6c to 50.5c.
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