PERTH (miningweekly.com) – Australian resources company Cape Lambert on Friday announced that Hong Kong-listed China Sci-Tech (CST) would buy its Lady Annie copper project, in Queensland, for a A$135-million.

Last month, the company ditched a plan to spin off the project through an initial public offering (IPO) of project vehicle Q Copper, which would have listed on the ASX.

“In the end, we felt a trade sale was the best outcome for shareholders and stakeholders, given [that] capital markets remain choppy, and may continue to do so for the medium run,” said Cape Lambert executive chairperson Tony Sage in a statement.

Cape Lambert initially planned to raise A$203-million through the IPO, but lowered that to A$164,5-million, before it withdrew the IPO.

Under the terms of the deal, Cape Lambert would receive an immediate A$5-million cash deposit and a further A$125-million in cash on the completion of the sale agreement. A further A$2,5-million would be payable once the Lady Annie project produces its first 10 000 t of copper cathode, and a further A$2,5-million once the delineation of additional ore reserves containing 25 000 t of copper metal has been completed.

CST was proposing to fund the acquisition from existing cash reserves and liquid assets.

The sale of the Lady Annie project was expected to be completed by the end of May, at which time Cape Lambert would have an additional A$130-million in cash, which would be used for a partially franked dividend payment to shareholders.

“”CST has very clear focus and complementary financial capacity to return Lady Annie to production in the short term, and we believe this is in the best interest of the various stakeholders associated with the project,” Sage said.

Following the sale of the Lady Annie project, Cape Lambert would still retain a number of key assets, which were acquired as part of the CopperCo transaction, including a 25% interest in the Lady Loretta lead/zinc/silver project, also in Queensland.

Subject to the completion of the Lady Annie sale, Cape Lambert would grant CST a right of first refusal over the sale of its interest in the Lady Loretta project, as well as three months exclusivity period to negotiate an acquisition of the rights to the Lady Annie deeps from the Lady Loretta joint venture.

Cape Lambert noted that the completion of the Lady Annie sale was still conditional on a number of matters, including receiving Foreign Investment Review Board and shareholder approval.

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