London Mining Plc : - Strategic expansion - Iron Ore Joint Venture in China

London Mining  is pleased  to  announce that,  further to  its  press
release made on 22 August 2008, it has now entered into a conditional
subscription agreement with Wits  Basin Precious Minerals Inc  ("Wits
Basin") to become a joint venture  partner for its iron ore  projects
in the People's  Republic of  China ("PRC").  Under the  subscription
agreement it has agreed to subscribe USD 39.25 million for 50% of the
shares in the  joint venture company,  China Global Mining  Resources
(BVI) Limited ("CGMR BVI"). It has also agreed to make a loan of  USD
5.75 million to Wits Basin. The subscription and loan will be  funded
from London Mining's existing cash resources.

CGMR BVI has entered into certain  escrow arrangements in the PRC  in
respect of  the acquisition  of  two Chinese  companies:  Xiaonanshan
Mining Co  limited  ("XNS")  and  Nanjing  Sudan  Mining  Co  limited
("Sudan").  The two companies operate iron ore mining and  processing
operations near Maanshan in the  Anhui and  Jiangsu Provinces in  the
PRC. It is a  condition of completion of  the acquisitions that  CGMR
will also be granted the right  to acquire a further iron ore  mining
company, Maanshan Zhaoyuan Mining Co  Ltd ("Matang"), which is  owned
by the sellers of XNS and Sudan.

Cost reduction and expansion of the existing operations (targeting  a
run rate of 1.2mtpa production capacity during 2011), combined with a
more focussed  marketing strategy  are expected  to ensure  operating
margins remain  strong  despite  the  near  term  outlook  for  lower
commodity prices. The  close proximity  to local steel  mills of  the
mines enables premium pricing due to the low transportation costs.

The completion of the subscription agreement with Wits Basin and  the
acquisition  of  XNS  and  Sudan  are  subject  to  certain   closing
conditions, including the  receipt of business  licences and  permits
relating to the transfer and the operation of the mining  properties.
It is anticipated that the acquisition of XNS and Sudan will complete
by the end of the first quarter of this year.

Christopher Brown,  Managing Director  of  London Mining  said  "This
joint venture with Wits Basin is of great strategic importance to  us
and it should help to regenerate interest in our company. We will  be
one of the first western companies to own a profitable iron ore  mine
in China, a country which is the largest importer of iron ore in  the
world. The  concentrates are  of  good grade  and we  expect  premium
pricing compared to other  exporting producers to  China, due to  the
much shorter transport distances to local steel mills. This deal  not
only is expected to give  us solid cash flows,  but also to give  our
company access to market intelligence on what really is happening  to
iron ore  markets  in China,  as  well  as further  iron  ore  mining
opportunities in the region."



For further information, please contact:

London Mining Plc
Christopher Brown, Managing Director             [phone]
Graeme Hossie,  Corporate Development  &  Deputy
Managing, Director,                              [phone]
[phone]

Crux Kommunikasjon AS
Charlotte Knudsen                                [phone]
                                                 [phone]
Threadneedle Communications (UK)
Laurence Read/Graham Herring,


Notes to the Editors:

London Mining
London Mining  is  incorporated and  registered  in the  UK,  and  is
developing mines to supply the global steel industry. The Company has
operational mining, exploration and  development projects located  in
Sierra Leone, Saudi Arabia, Greenland,  Mexico and South Africa,  and
has total  iron ore  resources of  1.3 billion  tonnes containing  an
estimated 45 million tonnes  of iron. In  2007, London Mining  raised
over USD  185  million  to  advance  iron  ore  production  from  its
projects, and listed on  the Oslo Axess,  a marketplace regulated  by
the Oslo Stock  Exchange on 9  October 2007.  In  August 2008  London
Mining sold its Brazilian  operations to Arcelor  Mittal for USD  810
million and  returned USD  344  million to  shareholders and  USD  60
million to  bond holders.  The  balance of  funds received  is  being
allocated to  existing and  new projects.  London Mining  is  trading
under the Reuters symbol LOND.OL and Bloomberg symbol LOND:NO.

Please  also  visit  our  website  www.londonmining.co.uk  for   more
information about London Mining and its operations.

Wits Basin
Wits Basin is a minerals exploration and development company  holding
interests in three exploration projects and currently does not  claim
to have any mineral reserves on any project.  Its common stock trades
on the Over-the-Counter Bulletin Board under the symbol "WITM."

To  find  out   more  about  Wits   Basin  Precious  Minerals   Inc.
(OTCBB:WITM) visit Wits Basin's website at www.witsbasin.com.

Additional information
The XNS mine is located  approximately 44km southwest of Nanjing  and
24km ESE of Maanshan, in the  Anhui Province. The magnetite iron  ore
mineralisation occurs  within a  dioritic  porphyry body,  which  has
intruded into andesite and may  be covered by tuffaceous breccia  and
tuff. The open pit mine currently mines approximately 1.2-1.5 million
tpa of ore and a similar  amount of waste, with mining and  stripping
costs estimated at 20-25Yuan RMB/t (USD 2.92-3.65/t). Resources  have
been estimated  at  31.2million  tonnes of  magnetite  ore  averaging
23.64% Total Fe by  No. 322 Geological  Brigade to Chinese  standards
(not JORC) in March 2007.

Low grade ores and waste are crushed and magnetically concentrated on
site at  the  preliminary  concentrator, before  being  trucked  with
higher grade ores approximately 7km on  a concrete paved road to  the
Sudan No.1  and No.2  concentration plants,  located in  the  Jiangsu
Province, where there  is sufficient  tailings capacity.  The ore  is
then  concentrated  on  a  3-3.5:1  basis  to  produce  approximately
400,000tpa of 62-63% Fe product.  The close proximity to local  steel
mills enables premium pricing due to the low transportation costs. In
2008, sales revenues peaked  at USD 130/t and  in early 2009  average
around USD  85/t, with  total operating  costs averaging  around  USD
50-60/t of concentrates.

CGMR has engaged a highly professional management team that  includes
Mr William Green, Mr Loong Keat Tan,  and Dr Clyde L Smith to  manage
the  operations.  Mr  Green  is  a  graduate  of  the  University  of
Pennsylvania's Wharton School of Business and has more than 15  years
of business  experience  in  Asia.  Mr  Tan  will  guide  the  mining
operations: a former  mining executive  who served Rio  Tinto for  21
years as  General Manager  of  various projects  including  Hamersley
Iron's Mount Tom  Price Mine  in Western  Australia and  Bougainville
Copper Ltd.'s mine in Papua New Guinea. Mr Tan also served Rio  Tinto
as head of their  Hong Kong and Beijing  offices. Dr Smith, who  will
guide geologic studies, is  an experienced mining industry  geologist
who has  been  responsible for  discovery  of five  ore  deposits  in
Canada, the U.S., and Mexico.

As at 29 October 2008, XNS and Sudan had approximately 400 employees.

CGMR intends to  create additional  value by  reducing costs  through
operating efficiencies and executing expansion plans, with a run rate
target for XNS of 1.2  mtpa production capacity during 2011.  Further
production increases and efficiencies  would arise from the  addition
of a new  mining operation at  Matang, located about  9km WSW of  the
Sudan plant.  Matang has  a  21.88million tonnes  magnetite  resource
averaging 25.15% Total Fe estimated by No. 322 Geological Brigade  to
Chinese standards (not JORC) in December 2003.

Under the terms of the acquisition of XNS and Sudan, the sellers,  Mr
Lu Benzhao and Ms Lu Tinglan, receive consideration of  approximately
USD 42.25 million in cash (subject to adjustment) in return for  100%
of the share capitals of XNS and Sudan. Of this consideration, up  to
approximately USD 17.48 million can  be deferred. One of the  sellers
will also  receive up  to a  further USD  53.95 million  (subject  to
adjustment) in compensation  under a consulting  agreement with  CGMR
BVI, of which USD 10 million is payable on completion and the balance
is payable  subject to  available  cash from  the operations  of  the
acquired entities. Under the joint venture arrangements London Mining
will receive  priority  dividends from  CGMR  BVI until  its  USD  45
million initial investment  is repaid. Mr  Lu Benzhao will  initially
remain as a director of XNS and Sudan. The fee is still to be agreed


This announcement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.
http://hugin.info/137683/R/1282017/286799.pdf


Copyright © Hugin AS 2009. All rights reserved.