Cape Lambert sells Lady Annie for $135m

Shares in Cape Lambert Resources Ltd jumped sharply after the resources and investment company sold a copper project in Queensland for $135 million to a Hong Kong-based firm.

The stock closed up nine per cent, or four cents, to 48.5 cents, but reached an intraday high and six-week best level of 54.5 cents.

Cape Lambert said it had agreed to sell the Lady Annie Project to Hong Kong's China Sci-Tech (CST) Holdings Ltd.

The Lady Annie copper project is near Mt Isa in north-west Queensland and was acquired along with other assets from CopperCo Ltd last year for about $106 million.

"In the end we felt a trade sale was the best outcome for shareholders and stakeholders given capital markets remain choppy and may continue to do so for the medium run," Cape Lambert chairman Tony Sage said.

"China Sci-Tech has a very clear focus and complimentary financial capacity to return Lady Annie to production in the short term."

Cape Lambert will receive $5 million now and $125 million payable on completion of the deal, under the terms of the binding share sale agreement.

A remaining $5 million is payable in two tranches on achievement of certain production and reserve milestones.

Cape Lambert intends to pay shareholders eight to 10 cents per share, following the receipt of $125 million.

CST is proposing to fund the acquisition from existing cash reserves and liquid assets.

Cape Lambert said upon completion of the Lady Annie sale, the company's cash and receivables position will be about $300 million excluding the mark-to-market value of its listed securities of about $70 million.