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Lemur Resources: Strategic Review Targets New Acquisitions

Contributed by Fox-Davies Capital

The Company has recently completed a strategic review of how best to utilise the Company's cash reserves (A$18.02M at 31st December 2012) and will now also look for new acquisitions.

As we have highlighted previously Lemur is trading at a significant discount to its cash position despite having a 147.5Mt JORC coal resource at its Imoloto coal project in Madagascar and the results of the scoping studies due by the end of the quarter.

The Company's work programme for the rest of the 1H'13 means that cash expenditure will be minimal including:

- Construction of a detailed financial model for the Imaloto Project based on the findings of the Mine, Port and Infrastructure Scoping Studies

- Continued work with Jirama towards having an Independent Power Plant (“IPP") concession awarded, and commencement of work on the IPP Environmental Impact Assessment (“EIA")

- Continued work with the Ministry of T ransport in evaluating alternative port sites

- Effecting permit administration including renewal and transfers.

Therefore the Board believes that given the current strong cash position and the weak market, now would be an ideal opportunity to consider making acquisitions, principally in coal. The Company have stated that a formal search is already underway with contact made with various Global Investment Banks and Commodity Traders with non-exclusive mandates to be executed in due course.

Since Lemur raised its capital, the market for coal companies has shifted significantly along with their corresponding market valuations. We believe that this is a good time to be acquiring coal assets and given lemur's strong cash position and limited capital requirements over the rest of the year, it makes sense for the Company to acquire assets outside Madagascar which are in or close to production and will support the eventual development of Imoloto. We have no guidance on geography, but suspect it will be initially looking in Southern Africa given CEO Blair Sergeant's recent relocation there.