PERTH (miningweekly.com) − ASX-listed Cape Lambert would increase its interests in two potentially large-scale West African iron-ore projects as part of an A$80-million play for Pinnacle Group Assets, the Tony Sage-led company announced on Thursday.
Cape Lambert is to increase its stake in Pinnacle, which owns the Kukuna iron-ore project, in Sierra Leone, and the Sandenia iron-ore project, in Guinea, to 90,2%, from its current 47,4% shareholding.
The company also made an A$1,10 a share offer to the remaining 9,8% of Pinnacle shareholders, which would expire on May 20.
Around A$40-million of the offer price would be payable through the issue of 67-million Cape Lambert shares, deemed at a price of around 60c a share, with a further A$20-million payable in cash. A further $20 million would be paid in cash on or before December 31.
The company’s shares were trading at around 48c a share at the time of writing.
Sage said on Thursday that the acquisition would deliver a greater than 90% ownership of two potentially large-scale iron-ore projects in the emerging West African iron-ore province, and would expose the company’s shareholders to a conceivably significant value uplift, with drilling planned to start at both projects in the near term.
The Kukuna project comprises one exploration licence of 68 km2 and is located only 70 km north of Cape Lambert’s Marampa iron-ore project and associated infrastructure.
The Kukuna project has an exploration target of between one- and two-billion tons, grading at between 30% and 35% iron.
The Sandenia project in turn comprises two exploration licences covering 608 km2. Prospect-scale mapping and sampling of the priority exploration targets would start in the June quarter of this year, to enable the design of a first-pass drilling programme, currently scheduled to start in the second half of the year.