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Cape Lambert Resources Granted Key Mining Licence For Marampa Iron Ore

Cape Lambert Resources (ASX:CFE) has been granted a large scale mining licence for its wholly-owned Marampa Iron Ore Project in Sierra Leone and will now negotiate a mine lease agreement.

Marampa is a brownfields hematite project with total JORC Resources of 681 million tonnes at 28.2% iron at a 15% iron cut-off.

With the grant of the Mining Licence, Cape Lambert will commence negotiations with the Ministry of Mineral Resources on the mine lease agreement.

This will take between 6 to 9 months to finalise.

"I am delighted that the MoMR has finally approved the grant of Marampa's Mining Licence so that we can get on with the process of negotiating the mine lease agreement, which will provide another level of confidence for potential investors or acquirers of the project," Cape Lambert executive chairman Tony Sage said.

CFE funding agreement with Timis Mining

Today's grant of the Marampa Mining Licence follows on from the news yesterday that CFE agreed to provide Timis Mining with US$20 million in financing to assist with acquiring the Marampa Iron Ore Mine, which is adjacent to the Marampa Iron Ore Project.

This included the US$12 million purchase of a US$2 per tonne royalty that could be worth up the US$56 million over four years, along with an US$8 million 12 month bridging loan.

The first royalty cheque is expected within the next three months.

Marampa Iron Ore Project

Marampa is a specular hematite project currently at the permitting and development stage located 90 kilometres northeast of Freetown in Sierra Leone.

It comprises two granted exploration licences (EL46A/2011 - 239.18 square kilometres and EL46B/2011 - square kilometres).

The project has 4 deposits with an Indicated Resource of 262 million tonnes at 28.7% iron and an Inferred Resource of 419Mt at 27.9% iron.

Marampa has access to access to a stockpiling and ship loading facility located at Pepel Port via a 73 kilometre rail operated by a subsidiary of African Minerals Limited (LON:AMI).

An Infrastructure Access Agreement has been in place with African Minerals Ltd since December 2013 that grants Marampa access rights to transport and export 2Mwtpa (equivalent to 1.8Mtpa dry) of iron concentrate via African Minerals' existing Pepel rail and port infrastructure.

The company was issued its environmental licence for the project in April 2013, which marked the first key step in the permitting process.

Marampa has a coarse primary grind size, low power costs, life of mine average mass yield of 36.4% and production of greater than 65% iron concentrate.


The grant of the Mining Licence provides potential project investors or acquirers with another level of confidence.

This is timely given yesterday's agreement with Timis Mining that could provide Cape Lambert potential payments of up to US$56 million over four years, or equivalent to US$3.5 million a quarter, and there is potential for the first royalty payments to be made within the next three months.

Considering the CFE market valuation of $66 million, a cash war chest and $62 million in available carry forward losses to utilise against future taxable income, the current market valuation is very light.

In addition, Timis Mining will also have the exclusive right to purchase 100 million tonnes of oxide material from Cape Lambert's Sierra Leone Projects - including the Marampa Iron Ore Project.

This could potentially earn between US$300 million and US$500 million.

Progress with the Marampa Iron Ore Project could also allow the company to continue its long standing dividend policy, where appropriate, of returning any surplus cash to shareholders.

It recently demonstrated its dedication to this policy, rewarding shareholders with $25 million though a $0.04 per share dividend in two equal fully franked payments.

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