Perth, Jan 17, 2006 AEST (ABN Newswire) - Cape Lambert Iron Ore Limited (ASX: CFE) is pleased to announce a proposed restructure of its mineral exploration and production assets through the formation of a 100% owned subsidiary, International Goldfields Limited (IGL), which will hold the companies Mt Ida, Evanston and other non-core gold assets. The Sacu gold/copper in Romania will be retained by CFE.
Once the subsidiary company is established, CFE proposes to list International Goldfield Limited?s shares on the Australian Stock Exchange (ASX) through an initial public offering (IPO) of 15,000,000 shares at 20c per share, to raise up to $3 million. Following the IPO, CFE and its shareholders will hold approximately 70% of the issued capital of IGL. CFE Executive Chairman, Mr Tony Sage, said that through the creation of the subsidiary and subsequent IPO CFE would realise the true value for its gold assets.
The Board of CFE believes that the value of the Company's gold operations (which are to be assigned to IGL) are not currently being fully reflected in the company's share price, Mr Sage said. This is largely due to the recent acquisition of the Cape Lambert Project being undertaken in conjunction with the significant and sustained increase in the gold price. The proposed de-merger is expected to release significant value and result in the distribution of this value directly to Cape Lambert's shareholders, who following the de-merger will hold shares in two listed entities.
Subject to obtaining approval for the proposed listing of IGL on the ASX, CFE intends to reward its existing shareholders through an in specie distribution of approximately 71% of the securities it holds in IGL (post IPO). The proposed distribution will give CFE shareholders 50% equity in IGL. The distribution of IGL shares will be subject to the successful listing of IGL on the ASX and the approval by CFE shareholders (refer proposed Capital Structure Table).
If successful the process will result in the establishment of IGL as a listed gold production and exploration company, with Cape Lambert becoming a company more focussed on iron ore exploration and development, Mr Sage said.
This will allow each company to capitalise on the prevailing positive sentiment towards the mineral sector in general and iron ore and gold in particular. The proposed IPO to raise $3 million, will provide funds for the further exploration and development of IGL gold projects at no cost to Cape Lambert.
Following the completion of a mine feasibility study in late 2005, mining at the Mt Ida gold project in Western Australia will commence in the second quarter 2006.
The mining activity at Mt Ida is expected to last approximately 22 months and will focus on the Baldock, Meteor, Whinnen and Timoni ore bodies, which have a combined JORC compliant resource of 110,650 ounces (averaging 24gms per tonne). The expected cost to develop and bring the four ore bodies into production will be approx A$4.5 million, Importantly, Cape Lambert will retain a 50% royalty interest on operating profit (up to $15 million) derived from mining the four ore bodies.
Milspan Holding Pty Ltd (Milspan) has agreed that the joint venture arrangement at Mt Ida, announced to the ASX on 4 January 2006, will be terminated, with the development and mining of these ore bodies to now to be undertaken and funded by IGL. Milspan will be engaged to provide executive management services to IGL in regards to this activity. The remaining ore bodies at the Mt Ida, to be transferred to IGL, are subject to a separate Farm-in and Joint Venture Agreement with MRA.
As part of the this agreement MRA have committed to spend A$7.5 million on gold exploration at the Mt Ida project over a five year period to earn a 51% interest of all gold found as part of the agreement.
The board of IGL will be made up of Mr Tony Sage (Non-Executive Chairman), Mr Nap Mayer (Executive Director), Mr Charles Mostert (Director) and Mr Tim Turner (Director). Mr Mayer holds a Bachelor Engineering (Mining) degree from the University of the Witwatersrand in South Africa and Diplomas in Business Administration from the University of South Africa and Harvard Business School in the United States of America. He has over 40 years experience in the mining industry, including an extended period as the Managing Director of the Gold and Uranium Division of Anglo American.
At the time this division produced 8 million ounces annually. As this restructure is subject to approval by CFE Shareholders, the company will be calling a shareholder meeting within the next seven weeks, with full details of the meeting and resolutions to be voted on being issued to all CFE shareholders, and the appropriate regulatory authorities, within the coming 14 days.
About Cape Lambert Resources Limited
Cape Lambert Resources Limited (ASX:CFE) (Cape Lambert) 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, Europe, Africa and South America.
![abnnewswire.com]()
Related Companies
Social Media
Share this Article
