REPORT FOR THE QUARTER ENDED 31 DECEMBER 2008

 

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 [phone] 
 
 
Australian Enquiries: 
Professional Public Relations 
David Tasker [phone]/ [phone] 
 
 
UK Enquiries: 
Nominated Adviser: 
Grant Thornton UK LLP 
Fiona Owen [phone] 
 
 
AIM Broker: 
Collins Stewart Europe Limited 
Adrian Hadden [phone] 
 
 
Conduit PR: 
Jos Simson [phone]/[phone] 
Gareth Tredway [phone] 
 
 
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 
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