Cape Lambert puts Sierra Leone project up for sale
MINING: Cape Lambert Resources has started a $500 million sale process for its Marampa iron ore project in Sierra Leone.
"We start the (sale) process now and we have two groups going on site in February," Tony Sage, executive chairman of the Australian miner, said yesterday.
"We expect the sale to be complete by June 30," Mr Sage told reporters at a briefing.
He said he believed the project had a "minimum" value of $500m.
Although unwilling to identify the two prospective buyers about to visit Marampa, Mr Sage described them as a Korean steel making group and a "consortium of steel mills out of China".
He said earlier visitors to the project had included two Chinese entities -- the Shandong group and MCC.
Mr Sage said Cape Lambert was considering a 100 per cent "trade sale" of the Sierra Leone venture.
However, the executive chairman said he was leaning more towards an initial public offering which would leave room for Cape Lambert to retain an interest in the project.
The IPO would potentially raise between $US400m and $US500m, he said.
"We'd probably list it in London or Hong Kong," he said.
On top of the sale price, the buyer would need to spend roughly $600m to bring Marampa into production at a rate of 5 million tonnes a year, he said.
Cape Lambert recently concluded a deal with African Minerals to gain access on commercial terms to a nearby railway and port.
Under the deal, Cape Lambert's Marampa project secured 5 million tonnes a year of transport capacity.
Sierra Leone is one of several countries emerging as potential iron ore exporters in West Africa. The region has recently attracted investments from China as well as from diversified mining majors Rio Tinto, BHP Billiton and Vale of Brazil.
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With a market cap around $320 million this project alone without the cash position of 0.10 cents a share and many other projects in the pipeline there is a big 6 months in line for CFE.