Cape Lambert Iron Ore Ltd ASX ANNOUNCEMENT 07 October 2010 CAPITAL MANAGEMENT PROGRAM: ON MARKET SHARE BUY-BACK The Board of Cape Lambert Resources Limited (Cape Lambert or Company) (ASX:CFE) is pleased to announce that, as part of a capital management program, it intends to implement an on market share buy-back (On Market Buy-Back).

The Board has determined to introduce the On Market Buy-Back for up to 10% of the Companys fully paid ordinary shares (Shares).

The On Market Buy-Back will comply with the provisions set out in the Corporations Act and the ASX Listing Rules and does not require shareholder approval.

Patersons Securities Limited has been appointed by Cape Lambert to act as broker to the On Market Buy-Back.

The earliest that the Company will be permitted to buy-back any Shares on market will be 22 October 2010.

Attached to this announcement is an Appendix 3C detailing Cape Lamberts intention to implement the On Market Buy-Back.

Option allocation to Directors, Staff and Consultants The Company plans to issue and allot unlisted options exercisable at $0.45 on or before 30 September 2011 to reward and retain directors, key staff, and consultants.

In total 8,000,000 options will be issued, of which 4,900,000 will be allocated to directors of the Company (subject to shareholder approval) as follows: Name Number of options Tony Sage 2,800,000 Tim Turner 900,000 Brian Maher 600,000 Ross Levin 600,000 The remaining options will be allocated to staff and consultants of Cape Lambert as determined by the Board. Please contact the Company on +61 8 9380 9555 if you have any queries about the On Market Buy-Back.


To download a copy of the CFE ASX announcemenet please click here: http://esp.gewru.com/download/files/12414/1253865/20101007%20-%20CAPITAL%20MANAGEMENT%20PROGRAM%20ON%20MARKET%20SHARE%20BUY-BACK.pdf FOR MORE INFORMATION PLEASE CONTACT: Cape Lambert Resources Limited: Tony Sage Executive Chairman Tel: +61 (0)8 9380 9555 Australian Enquiries: David Tasker Professional Public Relations, Tel: +61 (0)8 9388 0944 Mobile: +61 433 112 936 Email: This message has been sent to you as a subscriber of the PPR mail service. If you no longer wish to be a part of the service, please email with the word "REMOVE" in the Subject line. --------------------------------------------------------------------------- This email was sent by David Tasker, Professional Public Relations, 588 Hay Street, SUBIACO WA 6008 to Unsubscribe: http://esp.gewru.com/forms/u/08ebd5c/12414/1785105689.html ---------------------------------------------------------------------------