As foreshadowed yesterday, Cape Lambert Resources has today announced the sale of its Lady Anne copper project to Chinese company China Sci-Tech (CST) Holdings for $135 million.
The transaction includes a $5 million deposit, the major $125 million instalment and two $2.5 million production milestone payments.
In addition, to this Cape Lambert will also receive $13 million in cash from the release of environmental bonds.
CST will also reimburse the costs incurred while the mine was in care and maintenance, which are estimated at around $3 million.
“In the end we felt a trade sale was the best outcome for our shareholders, given capital markets remain choppy and may continue to do so for the medium run,” Cape Lambert executive chairman Tony Sage said.
“China Sci-Tech has a very clear focus and complimentary financial capacity to return Lady Annie to production in the short term and we believe this is in the best interests of the various stakeholders associated with the project.
Sage said the company would now also be in a position to complete a partially franked dividend payment to shareholders.
“It is our intention to return between eight and 10 cents per share to the shareholders once the sale is completed and the cash is received,” Cape Lambert executive chairman Tony Sage said.
“This will be the second cash return to our shareholders in 18 months, after $100 million was paid in October 2008.”
The company had hoped to float the project as part of a $214 million Initial Public Offering (IPO) under the banner of the Q Copper spin-off.
The float was then lowered to $165 million after the withdrawal of a key investor.
However, calls “adverse market conditions” forced the company to shelve the IPO in early February.