Name and Location
Marampa iron-ore project, Sierra Leone.

Client
Cape Lambert Resources and London Mining.

Project Description
Marampa is a specular hematite project, located 90 km north-east of Freetown, in Sierra Leone.

It has a mineral resource of more than one-billion tonnes of iron-ore, including a probable ore reserve of 539-million tonnes grading 31.1% iron, sufficient for a mine life of more than 40 years.

The mine is being expanded to five-million tonnes a year and has sufficient resources to support a staged expansion to more than ten-million tonnes a year.

Value
Total capital expenditure forecast to complete the five-million-tonne-a-year operation is expected to be $340-million.

Duration
Production started in December 2011.

Latest Developments
Cape Lambert is preparing to lodge a mining licence application for the Marampa project.

The granting of the licence will be the final step in the permitting process to start production.

Once granted, the mining licence will significantly derisk the project and  add considerable value for potential investors by clearing the way for immediate development, says executive chairperson Tony Sage.

Cape Lambert has been actively seeking a buyer for an equity stake in the project.

Further, an infrastructure agreement with Aim-listed African Minerals will likely be finalised in the next two weeks.

The infrastructure agreement provided a clear bulk commodity transportation strategy for the Marampa project, enabling Cape Lambert to export about two-million tonnes a year of concentrate through the recently refurbished and operational Pepel rail and port infrastructure.

African Minerals also has the option of buying an estimated two-million tonnes a year of Marampa concentrate at mine gate during the first three years of production.

Meanwhile, a recently completed life-of-mine feasibility study, based on probable reserves of 539-million tonnes at 31.1% iron, at the Marampa mine, has indicated that a $240-million processing plant upgrade will extend the operation’s life to more than 40 years.

The study further indicated that production at the iron-ore operation could be increased through the optimisation of the existing plant to a rate of six-million tonnes a year by 2014, at an estimated additional cost of $40-million, which has been described by the company as a low-risk exercise.

The iron-ore miner’s production guidance for this year is set at between 3.5-million and 3.9-million tonnes.

The incremental expansion and other initiatives identified by the feasibility study will reduce average operating costs to between $42/t and $45/t over the life of the mine.

Key Contracts and Suppliers
Bateman Engineering (updated scoping study); Southern Mining Consultants or SMC (financial modelling).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Bateman Engineering, tel +27 11 899 9000, fax +27 11 899 4903 or email enquiries-africa@batemanengineering.com.
SMC, tel + 61 407 884 667 or email je@southernmc.com.au.
Cape Lambert Resources investor relations, Eloise von Puttkammer, tel +61 8 9380 9555 or email eloisev@capelam.com.au.