Spending spree

Cape Lambert Iron Ore has won the bid for CopperCo's assets in a process conducted by CopperCo receivers and managers Gary Doran and David Lombe of Deloitte. The move represents another purchase in a colourful nine months of spending at Cape Lambert, where chairman Tony Sage has been under pressure to distribute what the company has to stave off various corporate raiders.

The acquisition was made for approximately $106 million, comprising $78 million in secured debt that Cape Lambert has already acquired and $27 million on completion of the deal.

The move was widely expected following Cape Lambert's purchase in February of CopperCo's debt for $72.7 million in cash, of which $15 million will be paid in July (No longer sheepish, February 9). The vendors of that debt were Macquarie Group and LinQ Capital. Cape Lambert also provided bank guarantees in place of CopperCo's existing performance bonds and unpaid liabilities that total $33.8 million.

"The CopperCo asset portfolio is attractive and extensive and current market conditions now provide an opportunity to unlock value for Cape Lambert and its shareholders through this acquisition," said Sage, who besides being chairman of Cape Lambert also part-owns the soccer A-League team Perth Glory. Perth Glory, one rung up from the bottom of the ladder, has big ambitions and it is speculated that former Arsenal FC player Nwankwo Kanu could be joining once his contract with Portsmouth expires.

The same ambitions could be attributed to cashed-up Cape Lambert, but the star being added to this line-up is a north Queensland copper mine called Lady Annie. Through CopperCo Cape Lambert now further owns a 25 per cent stake in Lady Loretta, also in Queensland, a 100 per cent interest in the Sappes gold project in Greece and various shareholdings in companies include NiPlats, Platmin, Tianshan Goldfields and Corvette Resources.

Cape Lambert is cashed-up thanks to the sale last year of its namesake project in the Pilbara to China Metallurgical for $400 million and it's been an eventful journey since then.

When Cape Lambert effectively became cash box it became of particular interest to Dubai-based corporate raider Mick Shemesian and minority shareholder Evraz, a steelmaker partly owned by yacht-loving oligarch Roman Abramovich.

Shemesian's Hong Kong-registered United Power attempted to stop the acquisition of a 30 per cent interest in a Sierra Leonean iron ore project and requisitioned a meeting. United Power proposed to replace Cape's board – comprising of Sage, Timothy Turner and Brian Maher – with a cast of Leo Khouri (reportedly known as 'The Gun' in day-trading and Opes Prime-following cicles), Blair Sergeant, Tony Roberts and Martin Bennett. It was not proposed that non-executive director Peter Landau, be replaced. Landau is executive director of Puntland-focused Range Resources, to which Khouri is a consultant.

Luckily for Sage and Cape Lambert, however, that volley was dodged via a court injunction and on October 1 the 30 per cent investment in Marampa was made. The vendor of the stake was AIM-listed African Minerals, a company associated with colourful Romanian-Australian businessman Frank Timis.

Timis, who last year attempted to rescue controversial fuel-technology Firepower, is a former associate of Sage's and has a number of projects in Sierra Leone. Timis led a delegation, including ageing rock star Bob Geldof, to promote the West African country in the middle of last year.

Cape Lambert also gave $100 million back to shareholders and to reduce its cash holdings will be spending more money post-acquisition on flood and environmental damage to Lady Annie. But unlike many most companies in a credit-constrained environment, Cape Lambert will be pressured to keep spending. It is set to receive a final payment of $80 million from China Metallurgical and Evraz is still waiting in the wings.

The spending spree is certainly not over.