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Cape Lambert Resources to bank $12.7M from Glory Resources sale

Proceeds from the unconditional takeover offer for Glory Resources by Eldorado Gold Corporation as well as an upfront payment of $6.5 million relating to the sale of the Sapes Gold Project in Greece will add more than $12.7 million to Cape Lambert Resources’ cash reserves. This validates its model of acquiring, adding value to and monetising mineral assets.


Cape Lambert Resources (ASX: CFE) is poised to bank A$12,747,500 after Eldorado Gold Corporation (TSE: ELD) declared its takeover offer for Glory Resources (ASX: GLY) unconditional.

This is based on Cape Lambert’s shareholding of 36.75 million shares in Glory and the $6.5 million upfront payment that it had agreed to in relation to the sale of the Sapes Gold Project in Greece.

Importantly, this validates the company’s model of acquiring and investing in mineral assets and companies, adding value through a “hands on” approach to management, exploration and evaluation, and monetising the assets.

Upon successful completion of Eldorado’s takeover of Glory, which is scheduled for 21 February, Cape Lambert will have cash reserves of approximately $31.0 million including about $5.6 million from environmental bonds associated with the Leichhardt Project that are due for release in February 2014.

“Cape Lambert is pleased the Takeover of Glory Resources has gone unconditional. Upon completion, we will have generated significant cash proceeds from our Glory investments, delivering considerable value for Cape Lambert shareholders,” executive chairman Tony Sage said.

Sapes Gold Project

Cape Lambert had originally acquired the Sapes Gold Project in Greece in June 2009 before subsequently becoming a cornerstone investor in Glory Resources by selling the project to Glory for a total consideration of A$32,500,000 in cash and 16 million Glory shares.

Glory was originally obliged to pay Cape Lambert an additional A$10 million in cash or shares on achievement of two milestones, namely the granting of an operating permit and the sale of the first 1,000 ounces of gold or gold equivalent.

As part of Eldorado’s takeover for Glory, Cape Lambert agreed to waive the milestone payments in return for an upfront payment of A$6.5 million.

The Sapes project, located 15 kilometres from Eldorado’s Perama Hill project in Thrace, hosts total proven and probable reserves of 637,000 ounces of gold at an average grade of 15.1 grams per ton.


The completion of Eldorado Gold’s takeover of Glory Resources will grant Cape Lambert Resources an upfront payment of A$12,747,500.

This will increase its cash reserves to about $31 million versus its market cap. of $77 million, roughly trading at a little less than half cash backing.

It also validates its model of acquiring, improving and monetising minerals assets.

Cash surpluses will be either used to buy-back Cape Lambert shares, tightening the share register and reducing issued capital or potential distributions to shareholders.

During the December 2013 quarter, it undertook an on market buy back of 21,169,905 fully paid ordinary shares completed for expenditure of A$3,019,421.41.

With cash levels increasing and royalty income commencing – from the Mayoko Iron Ore Project in the Republic of Congo, Proactive Investors can see that potential returns to shareholders are growing and significant.

Taken together with the fact that the company has no debt and a history of paying out retained cash in dividends or capital returns, and buying back shares on market, it provides a platform for maximising returns to Cape Lambert shareholders.


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