LONDON (ShareCast) - The A$400m sale of Cape Lambert’s iron ore project in the Pilbara region of Western Australia was completed today, sending shares in the miner sharply higher.

It has received a first payment of A$240m from China Metallurgical Group Corporation (MCC), boosting its cash reserves to more than A$270m. The next payment of A$80m is due before 15 September.

Cape said it will now proceed with the reduction of capital by way of a return to shareholders.

The rest of the money will be paid on the grant of a mining lease and related construction approvals in respect of the Cape Lambert Iron Ore Project.

In addition, it said Exploration Licence Application 47/1493 remains on schedule to be granted in August, enabling drilling to start at the Cape Lambert South Project in September/October.

“We have significant cash reserves, a highly prospective exploration target and a number of projects and companies that we are running the ruler over at present,” said Cape Lambert chairman Ian Burston.

“Our shareholders will receive a return through the capital reduction, and we feel we are well positioned to complete acquisitions that will provide long-term growth to shareholders.”

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