Highlights
* Estimate for the tailings resource reported according to the JORC code
* Additional tailings and primary ore resource estimates expected by end of Q1
2010
* Sufficient resources for 1.5Mtpa starter operation in 2011 with potential to
double production from tailings
* Planning underway for expanded production from the primary resource
* Ausenco appointed to provide project management services
* Confirmation of barge and shiploading capacity for up to 10Mtpa to
accomodate tailings and primary ore production
* Fiscal incentives package now confirmed on the Sierra Leone parlimentary
agenda; vote expected before end of February 2010
London Mining ("the Company") today provides an update on its Marampa Project in
Sierra Leone, including: an initial resource estimate for the tailings, reported
according to the JORC code; an outline on its plans for expansion to 5-8Mtpa
through development of the primary ore body; the appointment of Ausenco Ltd
("Ausenco"); and progress on the final approvals for its fiscal incentives
package.
The Marampa Project is located 120km from Freetown in Sierra Leone and is 100%
owned and operated by London Mining though its subsidiary London Mining Company
Ltd. London Mining is developing a tailings reprocessing operation and is
defining its main resource body to develop a full scale mining plan.
Snowden Mining Industry Consultants ("Snowden") has estimated a resource for the
tailings portion of the Marampa Project of 32.5 Mt grading 22.67% Fe, comprising
29.6Mt grading 22.79% Indicated Resource and 2.9Mt grading 21.51% Fe Inferred
Resource. Resources are reported in accordance with the JORC Code 2004 and at a
cut-off of 15% Fe. The current resource is based on a drilling programme
comprising some 400 holes but core recovery below the water table has been
variable with only 43% of holes being completed to the the base of the tailings.
London Mining plans to drill a further 200 holes comprising 2,300m to be drilled
using a new aircore rig to allow an updated tailings resource statement to be
reported by the end of Q1 2010. Initial testwork by CDTM in Brazil has shown
that a sinter feed with >65% Fe, <3% SiO2 and <1% Al2O3 can be produced using a
process route involving two-stage magnetic separation.
The resource reported today is in line with assumptions from scoping work,
specifically relating to resource grade, beneficiation characteristics,
operating costs and marketing studies for the resultant concentrate. The
resource provides London Mining with at least six years of production at
1.5Mtpa concentrate at an estimated capital cost of approximately USD80m
(including contingency and working capital build) with operating costs of
USD32.9/t of concentrate and potential to accelerate production to 3Mtpa though
an expanded tailings operation ahead of first concentrate from primary ore. It
is London Mining's intention to fully fund development of the tailings operation
using existing cash reserves and incremental cash flow.
Ausenco has been engaged to provide project management services and technical
support to the London Mining owners team to facilitate construction and ensure
timely delivery of the 1.5Mtpa tailings reprocessing operation. Development of
the gravel haul road to the barge loading site at Tawfayim is proceeding to
schedule with all the main structures now in place ahead of the wet season.
London Mining is also in final discussions with a provider of barging and
floating crane transhipment capacity. The floating crane represents the main
long lead item and a final agreement would secure capacity for 5Mtpa of
concentrate with a single crane, with potential for expansion by a further
5Mtpa through the addition of a second crane.
London Mining will also commence work on a further expansion to a 5-8 Mtpa
operation once it has determined the size of the primary resource by the end of
Q1 2010. In the interim, London Mining has initiated negotiations with Ausenco
to undertake a preliminary technical study to better define the economic
potential of an expanded operation. London Mining has now completed 2,700m of
drilling onthe Masaboin and Ghafal primary ore deposits and plans a further
6,000m drilling in 2010. This work is intended to allow an initial estimate to
be reported in accordance with the JORC Code for the primary ore resource and
for a prefeasibility study to be completed by the end of 2010. In addition,
further metallurgical work is to be undertaken to determine the suitability of
concentrate from the primary ore body for sinter or blast furnace pellet feed.
London Mining is actively pursuing potential offtake partners for the Marampa
products.
Michael Andrew, Divisional Manager Applied Geosciences of Snowden Mining
Industry Consultants BSc, MAUSIMM, and Ricardo Alvares de Campos Cordeiro of
Coffey Mining, Brazil and a professional member of the Australasian Institute of
Geosciences; who meet the criteria of a qualified person under the AIM Rules -
Guidance for Mining, Oil and Gas Companies, have reviewed and approved the
technical information contained within this announcement that relates to the
reporting of the Marampa Mineral Resource.
Marampa Mineral Resources as at January 2009, reported at a 15% Fe cut-off.
Measured Indicated Inferred
Asset Operator
Tonnes Grade Tonnes Grade Tonnes Grade
(Mt) (% Fe) (Mt) (% Fe) (Mt) (% Fe)
Marampa, London
Sierra Mining
Leone - - 29.6 22.7 2.9 21.5 Company
Ltd
The Marampa Project mining agreement, environmental impact assessment and fiscal
incentives package has already received full cabinet approval and is confirmed
on the Sierra Leone parlimentary agenda. London Mining now expects a
parliamentary vote and subsequent ratification to follow in February after which
it will then proceed with full development of the tailings reprocessing
operation. This will be the first comprehensive mining agreement to have been
presented in accordance with the new Mines and Minerals Act, which was approved
by the Sierra Leone Parliament on 30 December 2009.
Graeme Hossie, CEO of London Mining plc, said,"Marampa is London Mining's
leading project based on its stage of development, sizable production volume
potential, excellent logistics and technical simplicity. The partial tailings
resource announced today allows Marampa to commence production quickly and start
generating cash flow from which we can expand iron ore concentrate production
from tailings to 3mtpa prior to commencing production from the primary ore. It
also allows us to accelerate the construction of infrastructure for the enlarged
operation based on the primary orebody. We look forward to announcing an
expanded resource, operational updates, expansion plans and an agreement on
offtake over the course of 2010".
Please see the full announcement, including Glossary of technical terms
enclosed.
For more information, please contact:
London Mining Plc
Graeme Hossie, Chief Executive Officer +44 20 7201 5000
Rachel Rhodes, Finance Director
Thomas Credland, Head of Investor Relations
Liberum Capital (Nominated Advisor/Broker)
Clayton Bush/Ellen Francis +44 20 3100 2000
Crux Kommunikasjon AS
Charlotte Knudsen +47 97 56 19 59
Threadneedle Communication (UK)
Laurence Read/ Graham Herring +44 20 7653 9850
The Company's
website can be found at www.londonmining.co.uk <http://www.londonmining.co.uk/>.
About London Mining
London Mining is focused on identifying, developing and operating scaleable
mines to become a mid-tier supplier to the global steel industry. Its four
principal assets in Sierra Leone, Saudi Arabia, Greenland and China all have
deliverable production with potential for expansion. The Company listed on the
Oslo Axess on 9 October 2007 and on AIM in London on 6 November 2009. It trades
under the symbols LOND.L and LOND.NO (Reuters) and LOND LN and LOND NO
(Bloomberg).
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
[HUG#1378499]
Full announcement MARAMPA UPDATE: http://hugin.info/137683/R/1378499/339009.pdf