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Cape Lambert Resources Ltd

Cape Lambert Resources directs focus to iron ore amidst strong market dynamics

The company is focusing on the Marampa Iron Ore Project in Sierra Leone which has a scoping study and test work completed.

Cape Lambert Resources Ltd - Cape Lambert Resources directs focus to iron ore amidst strong market dynamics
Key infrastructure of rail, port and plant are available

Cape Lambert Resources Limited (ASX:CFE) is directing its focus to iron ore through the Marampa project in Sierra Leone which hosts a 680 million tonne resource at 28.2% iron.

This comes at a time when global dynamics of the iron ore market are particularly strong supported by a recovery in prices.

Cape Lambert’s decision to focus on iron ore is also supported by the advanced state of the Marampa project with a scoping study and test work completed as well as the presence of key rail and port infrastructure.

Marampa, which has been under care and maintenance since April 2015, is just 90 kilometres northeast of the capital Freetown.

Adjoining mine and plant

The project’s potential is enhanced by the adjoining Marampa mine and plant.

Cape Lambert has received interest for the Marampa project and the Government of Sierra Leone (GoSL) has shown interest in the two projects merging due to the obvious synergies.

The company is refocusing its efforts in pursuing the interested third parties and others with the hope of progressing the Marampa project to development and has started the application process for reissuance of the relevant licences.

Executive chairman Tony Sage said: “I am pleased that there has been renewed interest in the Marampa project which has suffered due to the low iron price preventing its development.

“We look forward to working with interested parties and the GoSL to merge the Marampa project with the Marampa mine and bring it to its long-awaited production.”

A merger of the two projects would provide greater use of the infrastructure, including Pepel port and rail, to export iron ore.

Potential to serve European markets

Another positive of the new focus is the company’s opportunity to partner with DGWA GmbH to position its diversified mineral investment portfolio into the European market.

Sage said: “Partnering with DGWA gives CFE a great opportunity of attracting high-quality European investors into our existing diversified mineral investment portfolio.”

Strong iron ore market

Iron ore market trends and prices are prompting strong interest in the sector globally.

Since the price lows of 2015, the iron ore price has risen steadily and since January 2019 has been above US$75/tonne (62% Fe, CFR China), peaking at US$117/tonne in July 2019.

The quality and grade of Marampa ore means an extra 15% to 20% premium to these prices making for very robust project economics.

Kipushi JV terminated

Cape Lambert’s focus on iron ore follows the termination of project financing extension for the Kipushi Cobalt-Copper Tailings Project in the Democratic Republic of Congo (DRC).

After an exhaustive effort, the company has been unable to source project funding to develop the project.

Kipushi’s economics have been impacted by low cobalt prices while the challenging security situation and yet to be controlled Ebola outbreak have made the DRC a very difficult jurisdiction for the company to work in.

On termination of the DRC JV with Paragon, Sage said: “We wish Paragon all the very best for the project and thank them for their patience in giving us the additional few months to find the project finance for the JV."

Scoping study completed

In 2013 at Marampa, Cape Lambert completed an update of a 15 million tonnes per annum scoping study which was based on exploiting the JORC-compliant mineral resource.

This showed that 82% of the resource could be mined to produce high-grade hematite concentrate over a 15-year mine life. 

Extensive metallurgical test work was undertaken by Tenova, which showed that the use of WHIMS technology provided the best beneficiation results on Marampa ores, producing a high-quality iron concentrate with low levels of deleterious elements.

Quick facts: Cape Lambert Resources Ltd

Price: $0.01

Market: ASX
Market Cap: $7.21 m
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