CAPE LAMBERT TO INCREASE PINNACLE INTEREST TO MORE THAN 90%
Key Points:
- Cape Lambert to increase its interest in Pinnacle Group Assets Limited to greater than 90%;
- Pinnacle’s key assets are the Kukuna iron ore project located in Sierra Leone and the Sandenia iron ore project, located in the Republic of Guinea;
- Cape Lambert currently holds 47.4% of Pinnacle following the conversion of loan funds (as at 31 March 2011) into equity;
- In acquiring an additional 42.8% of Pinnacle, the total consideration to be paid will be A$65.3 million satisfied in cash and Cape Lambert shares; and
- The deemed issue price of Cape Lambert shares will be A$0.60 per share, which is a 26.3% premium to the closing share price on 17 May 2011.
Australian resources and investment company, Cape Lambert Resources Limited (ASX: CFE) (“Cape Lambert” or the “Company”) is pleased to announce it is to increase its interest in Pinnacle Group Assets Limited (“Pinnacle”) to greater than 90%. Pinnacle owns the Kukuna iron ore project located in Sierra Leone (“Kukuna” or “Kukuna Project”) and the Sandenia iron ore project located in the Republic of Guinea (“Sandenia” or “Sandenia Project”) (refer Figure 1).
Contemporaneously, the Company has elected to convert funds advanced to Pinnacle up to 31 March 2011, under a convertible loan agreement, into shares in Pinnacle (“Pinnacle Shares”), resulting in its interest in Pinnacle increasing from 46.1% to 47.4%.
Cape Lambert Executive Chairman, Tony Sage said “this acquisition will deliver greater than 90% ownership of two potentially large scale iron ore projects in the emerging West African iron ore province, and will expose Cape Lambert shareholders to a conceivably significant value uplift with drilling planned to commence at both Kukuna (June 2011) and Sandenia (September 2011 quarter) in the near term”.
