The Australian iron ore company Cape Lambert Iron Ore Limited (Cape Lambert) has signed a conditional agreement to make a 30 percent investment in Marampa Iron Ore Limited (Marampa), a whole subsidiary of African Minerals Limited (African Minerals). The deal is valued at more than $45 million.
Under the terms of the agreement, Cape Lambert will issue 44 million shares in the company, representing about 10 percent of the company's stake, and also invest $25 million in Marampa iron ore project, located in Sierra Leone, to fund a definitive study.
Cape Lambert has been also granted an exclusive option to invest further in the iron ore project in question by acquiring the outstanding shares in Marampa from African Minerals, resulting in Marampa becoming a wholly-owned subsidiary of Cape Lambert at a price of $200 million. This option may be exercised at any time during the feasibility study or for the period of three months immediately after its finalization.
Completion of the transaction is expected to occur September 30, 2008 or at the date agreed by both parties.