TAKE a convicted heroin dealer, a part-owner of the Perth Glory and
an ageing rock star. What could the three men possibly have in common?
As it turns out, a mining project in Sierra Leone.
Cape Lambert Iron Ore - headed by the Perth Glory backer and fashion
magazine owner Tony Sage - yesterday agreed to purchase a 30 per cent
stake in the West African iron ore project for $US45 million ($54
million) in cash and shares.
The deal will hand control of 10 per cent of Cape Lambert to African
Minerals, an exploration company listed on London's Alternative
Investment Market. It is headed by Mr Sage's former associate, Frank
Timis, a colourful Romanian-Australian businessman based in London.
Mr Timis recently attempted to bail out the failed fuel-pill maker
Firepower. And according to the prospectus for the AIM listing of Regal
Petroleum, in both 1990 and 1994 he was convicted of possessing heroin
with the intent to supply under Australian law.
Mr Timis, whose company has a few projects in Sierra Leone, in June
led a delegation including the rock star Bob Geldof to the African
nation to explore the possibility of enhancing the nation's economy.
The Marampa project contains millions of tonnes of very low grade
iron ore - in the 23 per cent to 30 per cent range - which can be
upgraded to a much higher-grade concentrate product through washing and
screening. It is one kilometre from a historic, 80-kilometre-long
railway which was destroyed during Sierra Leone's long-running civil
war, but can be restored easily by laying new tracks.
African Minerals is giving Cape Lambert an option to acquire the
rest of Marampa for $US155 million at a later date. Cape Lambert had
been looking for projects after agreeing to sell its namesake magnetite
project in Western Australia to China Metallurgical Group for $400
million.
Mr Sage said his team had examined coal and iron ore projects in
Brazil, South Africa and Indonesia before he bumped into Mr Timis in
London and started to discuss a deal over the Marampa deposit. "I've
had one visit to the site," Mr Sage said. "It looks like a country you
can do business in."
Completing the Marampa deal will require regulatory approvals and more due diligence but, importantly, not a shareholder vote.
Cape Lambert's largest shareholder, the Russian steelmaker Evraz,
said it wanted to leverage its 19.9 per cent stake into a board seat,
having recently bought 75 per cent of the Cape Lambert project from
China Metallurgical in a $300 million side deal.
Evraz has not yet made up its mind as to whether it approves of the investment in Sierra Leone.
"Evraz will be in a position to properly consider the proposal once
we have received further substantial information about the proposed
Marampa investment," said a spokeswoman for the steel group.
