Cape Lambert (CFE), an iron ore explorer, said today it completed acquisition of three tenements adjacent to its iron ore project located in the Pilbara region of Western Australia, increasing the company's ground holding to 70%.
The company's ground holding is now 373km².
"The acquisition of these tenements is strategically important given their proximity to the existing Cape Lambert resource, the potential for the resource to extend east into the tenements, and the presence of the newly discovered, untested magnetic anomalies," executive director Tony Sage said.
Cape Lambert has agreed to pay a cash and scrip consideration for the tenements comprising of $2 million in cash and the equivalent of $2 million in fully paid ordinary Cape Lambert shares.
In the event that mining is commenced, the vendor shall be entitled to production payment of $0.50 per tonne of magnetite concentrate, but only in respect of that produced from the acquired tenements.
In the annual report released on Wednesday, the company reported an entity of after tax loss for the year of about $3.9 million, significantly lower than 2006's loss of $15 million.
The company also announced the annual general meeting is to be held on 30 November 2007.
On October 5, the stock fell by as much as 25% after it terminated the proposed sale of 70% of its iron ore project to Chinese investor Ding Liguo, chairman of Delong Holdings.
Cape Lambert said Ding had failed to satisfy the conditions for the transaction and had breached a memorandum of understanding (MOU).
Since then, the stock has remained volatile, and is steadily following a downwards momentum.
Today's news didn't draw a great reaction from the market, with the share price moving in a tight range between 0.430-0.445, amid thin volumes.
On the other hand, Cape Lambert Iron Ore's spin off company, Global Iron (GFE) is doing very well after making a strong debut on 18 October 2007 and keeping a steady upward momentum since.
The company which was designed to assist in development of Cape Lambert's non-core iron ore assets, excluding the Cape Lambert Iron Project in Western Australia
Shareholders who bought into the company at the initial public offer will be glad, with the price currently around the 70 cent mark, significantly higher from the offer price of 20 cents.
