CFE 0.00% 0.4¢ cape lambert resources limited

cape lambert african buy was ann made here

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    LONDON, Feb 26 (Reuters) - Australian exploration firm Cape Lambert Iron Plc plans to invest about A$170 million ($158 million) in an African iron ore asset by June, Chief Executive Tony Sage told Reuters on Tuesday.
    The London-listed firm also plans to return about A$100 million to shareholders following the sale of its Western Australia-based Cape Lambert iron ore project to Chinese government construction firm China Metallurgical Group Corp, a sale that will raise A$400 million.
    "We've signed the confidentiality documents and done the due diligence" on the Africa project," said Sage, who was speaking by telephone from Australia.
    "It's a fantastic resource, but we won't sign the MOU (memorandum of understanding) until the first tranche is paid by China Metallurgical, likely in the first week of June," he said.
    Cape Lambert's foray into Africa comes as foreign groups like China Metallurgical increasingly take stakes in Australian miners, helping to meet its voracious need for minerals to fuel rapid industrial growth, but which could result in over-mining.
    "The market will have to take a new view on Cape Lambert given its investment in this asset, but it could be a good move," said Collins Stewart analyst Danny Keating.
    "The Australian market is well-represented and quite competitive and there's a lot more potential for new discoveries in Africa.
    "We'd like to see where its location is and what sort of plans they have for it, but I suspect it's at a relatively early stage."
    Cape Lambert's London listed shares were down 15 percent to 26.25 pence at 1328 GMT, a decline that Collins Stewart's Keating attributes to profit-taking, while its Australia-listed shares were up 3 percent to A$0.495.
    The firm's FTSE-listed shares had almost doubled since the start of the year ahead of yesterday's announcement on the sale to China Metallurgical.
    Cape Lambert has excluded a 3km-long as-yet-undrilled site in Western Australia from the China Metallurgical sale, which the firm says will be worth as much as A$300 million at current prices, Sage said.
    "That's the blue sky scenario," Sage said. "The market has not yet given us a value for that asset, and that's the upside to the share price." (Reporting by Hsu Chuang Khoo; editing by Elaine Hardcastle)
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