Cape Lambert to sell off Mayoko royalty
PERTH (miningweekly.com) – ASX-listed Cape Lambert was looking to divest of its royalty in the Mayoko iron-ore project, in the Republic of Congo.
The royalty right was acquired as part of Cape Lambert’s consideration when it sold its 100% interest in the project to African Iron, which was subsequently taken over by major Exxaro Resources in March of last year.
The royalty was equal to $1/t of every ton of iron-ore shipped from the Mayoko project, and Cape Lambert said on Thursday that based on the assumption that the project would produce some two-million tons a year of ore, in 2015 – 2016, and some 10-million tons a year from 2017 onwards over a life-of-mine of 30 years, the royalty had a net present value of between A$55-million and A$114-million.
“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,” said Cape Lambert executive chairperson Tony Sage.
He noted that the company was confident it would be able to secure a buyer for the royalty, based on interest in similar transactions from West African iron-ore projects in recent years.
“The sale of the royalty would allow the board to consider the payment of a special dividend to shareholders as per the company model,” Sage said.
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