Exxaro Resources has been granted a mining convention for the Mayoko Iron Ore Project, located in the Republic of Congo, which upon production commencement will see CFE receive significant royalty payments on an ongoing basis.
Production from Mayoko is due to commence in H2 2014 at a rate of 30,000 tonnes per month, rising to 2 million tonnes per annum from 2015. From 2019 it is expected that production will be approximately 10 million tonnes per annum.
The Mayoko royalty was negotiated by Cape Lambert as part consideration when it sold its 100% interest in the Mayoko Project to African Iron Limited in January 2011, which was subsequently taken over by Exxaro in March 2012. The royalty is equal to US$1 per tonne for every tonne of iron ore shipped from the Mayoko Project (indexed annually to the CPI).
Commenting on the granting of the Mining Convention Cape Lambert Executive Chairman Tony Sage said, “it is great news that Exxaro will commence mining operations at the Mayoko Iron Ore Project in the coming months, not only for Exxaro and the people of the Republic of Congo, but also for Cape Lambert and its shareholders who will receive significant royalty income for many years to come.”