Cape Lambert swings the axe
Cape Lambert Resources says it has axed 117 staff, cut exploration, mothballed assets and postponed dividend payments in response to falling iron ore prices and deteriorating market conditions.
The Tony Sage-led company announced this morning the cutbacks would save it $3.5 million a year.
The moves follow a review of the company's capital management strategy and projected expenditure in light of recent deteriorating market conditions and a fall in the iron ore price.
"As a result, Cape Lambert has instituted a range of cost reduction measures across its business, including reducing its full-time workforce at both head office and across its operations by 117 people," the company said in a statement to the ASX.
"Cape Lambert has also reduced exploration activities across its portfolio of assets and placed some non-core assets on care and maintenance."
Investors also reacted negatively to news the company would postpone its proposed second dividend payment of two cents a share fully franked, which was due to be paid on February 27.
Mr Sage noted a sharp drop in the iron ore price in recent months, coupled with a downturn in market conditions for the mining sector as a whole.
"With these factors in mind, Cape Lambert believes it is prudent capital management to find genuine cost savings across its business and postpone the second dividend payment scheduled for February," he said.
However he insisted it was a postponement, not a cancellation of the dividend payment.
"Cape Lambert as a company is in a strong commercial position and taking these measures is sound management to protect the company in what is a hard time for the mining sector," he said.
Mr Sage said the company was confident the iron ore price would recover in the near-to-medium term and the dividend payment could resume in due course.
Cape Lambert is the latest in a rash of announced cutbacks by junior iron ore miners and explorers responding to a sharply lower iron ore price.
Iron ore was trading at $US70.87 a tonne yesterday
Cape Lambert shares were off 1.6 cents, or 17.78 per cent, to 7.4 cents at 9.50am.
