WA-based exploration and development company Cape Lambert Resources has reported a potential special dividend payment to its shareholders, after appointing global investment bank Deutsche Bank to sell its Mayoko iron ore project royalty.
The project, within the Republic of Congo, is estimated to be worth between $55 million and $114 million in royalty to the company, as confirmed by internal valuation.
Subject to the success of the sale, Cape Lambert intends to reward its shareholders with a substantial distribution payment from resulting earnings.
The company currently accrues US$1 per tonne, for every tonne of iron ore shipped from the project and is confident of the financial rewards of the sale. Mayoko is expected to ship 2 million tonnes per annum in 2015 to 2016, and then 10mtpa onwards from 2017 throughout the mine’s 30-year life expectancy.
“We think now is a perfect opportunity to achieve maximum value from this royalty, which would in turn allow us to deploy funds in other areas,” Cape Lambert executive chairman Tony Sage said.
“The sale of the royalty would allow the board to consider the payment of a special dividend to shareholders as per the company model.”
Cape Lambert strategises in acquiring and investing in undervalued and distressed mineral assets and companies, adding value management, exploration and evaluation.
The company currently has exposure to iron ore, copper, gold, uranium, phosphate, lead-silver-zinc and vanadium assets in Australia, Europe, Africa and South America.