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September 2015 Quarterly Report
30 September 2015
28 October 2015
QUARTERLY REPORT - 30 September 2015
Please find attached the Quarterly Activities Report and Appendix 5B for the period ended 30 September 2015.
Yours faithfully
Cape Lambert Resources Limited
Tony Sage
Executive Chairman
Cape Lambert Resources Limited Sept 2015 Quarterly Report
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Cape Lambert Resources Limited (ASX: CFE) is a fully funded mineral development company with exposure to iron ore, copper, gold, uranium, manganese, lithium and lead-silver- zinc assets in Australia, Europe, Africa and South America.
Australian Securities Exchange
Code: CFE
Ordinary shares 626,686,586
Unlisted Options
8,925,000 ($0.088 exp 18 Dec 2016)
Board of Directors Tony Sage Executive Chairman
Tim Turner
Non-executive Director
Jason Brewer
Non-executive Director
Ross Levin
Non-executive Director
Melissa Chapman Company Secretary
Key Projects and Interests
Marampa Iron Ore Project Pinnacle Group Assets
Cape Lambert Contact
Tony Sage Executive Chairman
Eloise von Puttkammer Investor Relations
Phone: +61 8 9380 9555
Email: [email protected]
Australian Enquiries
Professional Public Relations David Tasker
Phone: +61 8 9388 0944
Mobile: +61 433 112 936
Email: [email protected]
UK Enquiries
Tavistock Communications Emily Fenton / Jos Simson Phone: +44 (0)207 920 3150
Mobile: +44 (0)7899 870 450
www.capelam.com.au
September
HIGHLIGHTS
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As at 30 Sept 2015, the Company had approximately A$7.0 million in cash at bank.
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Further cost reduction measures being implemented in Sierra Leone.
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Cape Lambert Chairman reaffirms commitment by increasing shareholding.
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Update on Timis Mining royalty and funding arrangement.
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Update on African Minerals Limited sale of shares in the Company.
CORPORATE
Strategy and Business Model
Cape Lambert Resources Limited (ASX: CFE) (Cape Lambert or the Company) is an Australian domiciled, fully funded, mineral development company. Cape Lambert has interests in several exploration and mining companies, providing exposure to iron ore, copper, gold, uranium, manganese, lithium and lead-silver-zinc assets in Australia, Asia, Europe, Africa and South America (refer Figure 1).
Cape Lambert's strategy is to acquire and invest in undervalued and/or distressed mineral assets and companies (Projects) and:
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improve the value of these Projects, through a hands on approach to management, exploration, evaluation and development; and
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retain long-term exposure to these Projects through a production royalty and/or equity interest.
Cape Lambert aims to deliver Shareholder value by adding value to these undeveloped Projects. If Projects are converted into cash, the Company intends to follow a policy of distributing surplus cash to Shareholders.
Capital Management
African Minerals Limited Shareholding
As previously announced, the Company advised Shareholders that administrators had been appointed to manage the affairs, business and property of African Minerals Limited (AML). AML continues to be a substantial shareholder of the Company with a holding of 105,808,628 shares.
Cape Lambert Chairman Increases Shareholding
During the quarter, Cape Lambert Executive Chairman reaffirmed his commitment to the Company by significantly increasing his shareholding via an off market purchase of 29,151,25q shares increasing his shareholding to 11.61% (refer ASX Announcement 18 August 2015).
September
Investments
Timis Mining Corporation Royalty
The Company wishes to update Shareholders regarding the royalty agreement with Timis Mining Corporation SL Limited and Timis Mining Corporation Limited (collectively Timis Mining).
As previously announced, under the terms of the agreement Cape Lambert will receive a royalty of US$2 per tonne of iron concentrate (Royalty) exported from the Timis Marampa Iron Ore Mine (Mine), which is payable on a quarterly basis. The Royalty was originally payable over a four year period and in the event that the Mine temporarily suspended production due to a force majeure event, the Royalty period would be extended by the same period that the force majeure event continues. The Royalty agreement has been amended and a Royalty of US$2 per tonne is now payable on production of 24mt from the Mine and is not limited to a 4 year time period.
In the March 2015 quarter, eight shipments were made from the Mine with Cape Lambert due to receive a royalty payment of US$2,566,420 which has yet to be paid to the Company. The Mine remains on care and maintenance due to the currently low iron ore price.
Timis Mining Corporation Bridging Finance
The Company would like to provide an update to Shareholder regarding the bridging finance with Timis Mining (refer ASX Announcement 22 October 2014).
Bridging finance of US$8 million is repayable to the Company in October 2015 and incurs interest of 3 month US LIBOR (London interbank offered rate) + 6%. The principal and interest is due to be repaid to Cape Lambert in one payment on 21 October 2015 and can be extended by the parties on mutually agreed terms.
Repayment of the bridging finance is yet to be received by the Company. Cape Lambert has written to Timis Mining requesting repayment of the bridging finance and is in communication with Timis Mining to understand when it is anticipated that the Mine will re-commence production and be in a position to repay the bridging finance.
September
PROJECTS
Marampa (100% interest)
Marampa is an iron ore project at the development stage, and is located 90 km northeast of Freetown, Sierra Leone, West Africa (Marampa or Marampa Project) (refer Figure 2). Marampa comprises one granted mining licence (ML05/2014) comprising 79.40km2 and two granted exploration licences (EL46A/2011 - 159.78 km2 and EL46B/2011 - 66.00km2 (formerly EL46/2011 - 305.18km2)) held by Marampa Iron Ore (SL) Limited, which is indirectly, a wholly owned subsidiary of Cape Lambert.
No exploration activities occurred during the quarter. The Company is in the process of implementing further cost reduction measures at Marampa, to be completed early in the December 2015 quarter.
Dempsey Resources (100% interest)
Dempsey Resources holds the Kukuna Iron Ore Project located in Sierra Leone (Kukuna or
Kukuna Project).
The Project is located 120 km northeast of Freetown in the northwest of Sierra Leone and consists of one exploration licence (EL22/2012) covering 68km2 (refer Figure 2). The licence is located 70km due north of the Marampa Project and the Pepel Infrastructure and comprises rocks that correlate with the Marampa Group stratigraphy known to host specular hematite mineralisation.
The Kukuna Project is currently under care and maintenance.
Metal Exploration Limited (100% interest)
Metal Exploration (Mauritius) Limited, a wholly owned subsidiary of Cape Lambert, holds 15 granted exploration licences and one application in Sierra Leone covering approximately 1,688km2. This land package covers the region 70km to the north and south of Marampa and is referred to as the Rokel Iron Ore Project (Rokel or Rokel Project). Rocks from the Marampa Group exist throughout the licence areas, much the same as the Marampa Project, and are known to host specularite schist bearing units.
The Rokel Project is prospective for discovery of hematite schist deposits geologically similar to those at Marampa and is located proximal to the existing Pepel infrastructure (refer Figure 2). Regional mapping and geophysics has identified a number of prospective areas to be followed up with future targeted exploration.
The Rokel Project is currently under care and maintenance.