Cape Lambert Resources will help junior gold explorer Chameleon Mining obtain $6.5 million worth of funding, after the two companies reached a ‘strategic alliance’ yesterday.
Cape Lambert will assist in setting up a credit facility for the funds, which will go towards exploration and mining expenditure.
The board of Chameleon is chaired by former rugby league international Ben Elias, who played for the Balmain Tigers in the 1980’s and early-90’s.
Elias recently joined the board of Perth Glory Football Club, which is owned by Cape Lambert executive chairman Tony Sage.
He said the agreement would create value for shareholders and help the company in its next phase of growth.
“Cape Lambert’s experience in developing mining assets, along with its iron ore expertise, will be of particular benefit to the Chameleon board and shareholders,” he said.
“The investment is an endorsement of Chameleon’s decision to take action in the Federal Court over the Jack Hills iron ore assets.”
As per the terms of the agreement, Cape Lambert is entitled to nominate three directors onto the Chameleon board.
Sage, who will take up one of the new spots, said he was optimistic about the opportunities available to Chameleon and looked forward to contributing to the company’s development.
He will be joined by Jason Bontempo, the managing director of gold explorer Corvette Resources, as well as Paul Kelly, the chief executive of Perth Glory and chairman of DMC Mining.
Chameleon will also undertake a share placement to raise $2.5 million at 1.5 cents per share.
Cape Lambert will subscribe to $2 million worth of shares, while Sage and Bontempo will take the remainder with $400,000 and $100,000 worth of shares respectively.
The placement is still subject to shareholder approval.