The transaction will see Cape Lambert assign 100% of its rights and obligations in relation to the project to Fe Limited.
This allows Cape Lambert to focus its efforts and funds on fast-tracking its Kipushi Tailings Project and Zambian Kitwe Tailings Project to production.
Cape Lambert will receive 25 million shares in Fe Limited and up to $125,000 in cash as consideration.
The company will retain an interest in any upside from the Kasombo Project through its significant shareholding in Fe Limited.
Tony Sage, chairman, commented: “The assignment of the Kasombo Project to Fe Limited will enable the company to focus its efforts in bringing the Kipushi Tailings Project and Kitwe Tailings Project to production as soon as possible, in doing so maximise shareholder return at a very favourable time for the cobalt market.”
Settlement of the transaction has a number of conditions which have until 30 September 2017 to be satisfied or waived.
Cape Lambert shares are trading up 120% year to date, currently priced at $0.029.