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Cape Lambert Resources Returning $25M To Shareholders

Cape Lambert Resources (ASX:CFE) is executing its strategy of returning surplus cash to shareholders by paying $0.04 per share in fully franked dividends over two payments, or a total of $25 million.

This follows its recent positive settlements with the Australian Taxation Office and Metallurgical Corporation of China.

The payments will be made on 31 October 2014 and 27 February 2015. It represents an attractive dividend yield of 36% based on previous day's closing price.

Following resolution of its settlements and paying the dividend, Cape Lambert will have cash, receivables and listed securities of $69 million including $38 million in unrestricted cash.

"We have proven over a long period of time that we can execute our strategy and return surplus cash to our shareholders, a strategy that we will continue in the future with the aim to deliver further value to shareholders," executive chairman Tony Sage said.

"We have been presented with, and identified, a range of investment opportunities that we think we can add value to, either through technical or financial support, and we plan to advance these so as to create further value for our company and shareholders."

Settlements

The company had at the beginning of this month reached a settlement with the ATO to make a final payment of $2.4 million that discharges its remaining liability of $79 million arising from an Amended Assessment received in 2012.

Tony Sage recently spoke to Proactive Investors, click here to watch the interview.

It had also received in mid-July $51.6 million in relation to the Metallurgical Corporation of China settlement relating to the sale of the Cape Lambert magnetite iron ore project.

Analysis

The return of $25 million to shareholders, or $0.04 per share, in the form of fully franked dividends is in line withCape Lambert Resources' strategy of returning surplus cash to shareholders.

This is a significant reward for shareholders given that shares in the company are currently trading at $0.15.

It also leaves the company with a still healthy $69 million in cash, receivables and listed securities to evaluate and take advantage of any investment opportunities.

To top it off, the company has $62 million in available carry forward losses to utilise against future taxable income.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.