TIDMLOND
RNS Number : 0538D
London Mining Plc
10 May 2012
London Mining Plc
Quoted on London AIM (LOND LN)
("London Mining" or the "Company")
10 May 2012
Q1 PRODUCTION REPORT AND INTERIM MANAGEMENT STATEMENT
Highlights
-- Quarterly production of 315,000 wmt (299,000 dmt) of iron ore
from Marampa mine in Sierra Leone, tracking planned ramp up
schedule
-- Sales of 244,000k wmt (232,000 dmt) in Q1 2012
-- Consistent premium quality product specification of over 65.5% Fe with low impurities
-- Good progress made on the construction of the second plant
with commissioning expected in Q1 2013
-- BFS completed for Isua project and preparations for permitting process initiated
Post period highlights
-- Iron ore production of a further 130,000 wmt achieved post
period at an average rate of 4.3kt/day and in line with ramp up
plans and 2012 production target
-- Official mine opening by His Excellency Ernest Bai Koroma on 25 April 2012
-- Appointment of Renato Almeida as Chief Marketing Officer
Graeme Hossie, Chief Executive Officer of London Mining said "We
are pleased to provide information on our first full quarter of
iron ore production at Marampa. Over the quarter we have
successfully processed the Marampa tailings and weathered ore and
shipped consistent high quality product to both European and
Chinese steel mills. The logistics from mine to ship have been
proven to work as designed and we have now sent seven ships to our
customers to date. Our pricing reflects our premium quality product
and we expect to increase margins following the commissioning of
our transhipment platform in Q2 2012. I am also pleased to announce
the appointment of Renato Almeida as Chief Marketing Officer.
Renato has over 27 years experience in iron ore and will play a
vital role in developing lasting relationships with customers as we
grow production over the next few years."
Marampa, Sierra Leone (100% owned)
Production
1Q 12 4Q11* % change
Concentrate produced
(wmt)** 315,000 20,000 1,473
------------------------------- ------- ---------
Average daily production rate
(wmt/d) 3,467 1,824 90
------------------------------- ------- ---------
Concentrate shipped 244,000 N/A N/A
(wmt)
------------------------------- ------- ---------
Average concentrate grade shipped 65.5 N/A N/A
(Fe%)
------------------------------- ------- ---------
Average FOB price 108 (based on 50kt ships only) N/A N/A
(USD/dmt)
------------------------------- ------- ---------
*Production commenced on 21 December 2011
** 1wmt = 0.95dmt
Quarterly iron ore concentrate production at the Marampa
mineincreased by 1,473% over the fourth quarter of 2011, our first
quarter of production at the mine. The plant is successfully
processing tailings and weathered ore and the ramp up continues in
line with previous guidance. 232,000 dmt of concentrate was shipped
in five Supramax vessels, four of which have gone to China and one
to Europe.
The average received price after freight and marketing over the
Q1 2012 was USD108/dmt FOB with average freight of USD39/wmt. The
commissioning of the transhipment vessel is on track to be
completed in Q2 2012 which will allow direct loading of Panamax and
larger vessels in the Freetown harbour thus reducing freight rates
from the current average of USD39/wmt to an expected USD25/wmt.
Average moisture content of shipments during the quarter was
4.7%.
Update on expansion
The expansion of the first plant from an annualised name plate
run-rate capacity of 1.5 to 1.8Mt is on schedule and on track to be
completed in Q3 2012 as previously announced. The main long lead
item, the ball mill, is on route from China and is expected to
arrive in Freetown by the end of Q2 2012.
Earthworks have commenced for the second plant in order to be
completed ahead of the wet season and long lead items have been
ordered. The timing of commissioning and ramp up of the two plants
is expected to ensure previous guidance of 1.5Mtpa of iron ore
concentrate in 2012, 4.2Mtpa in 2013 and 5Mtpa in 2014 is met.
Work on the bankable feasibility study ("BFS") for the proposed
expansion to 9Mtpa is expected to be completed in Q3 2012. An
Environmental Impact Assessment and Social Impact Assessment
are,expected to be completed by the end of Q4 2012.
London Mining, Colombia (100% owned)
Production
Coke production Colombia is developing slowly and below
expectations with 5,800t produced in Q1 2012 due to continued
effects from bad weather related to La Nina. We continue to aim for
the 200,000tpa run rate as previously guided by end Q4 2012. A
drilling campaign to identify resources for integrated coke oven
feedstock supply has been completed. London Mining continues to
review opportunities to secure further coking coal resources and to
finalise an offtake partner for coke production.
Isua, Greenland (100% owned)
A BFS for a 15Mtpa operation was announced on 29 March 2012. The
BFS supports the initial findings of the scoping study, provides a
more accurate estimate of cost and provides the foundation to
finance and construct a mine at Isua. A 3.5 year payback period was
determined on initial 10 and 15 year mine life scenarios. A
detailed summary of the results of the BFS for the next stage of
the project may be found on the London Mining website.
Since the announcement of the BFS, London Mining has initiated
the permitting process with the Bureau of Minerals and Petroleum of
Greenland which is expected to take approximately six months
New management appointment
Renato Almeida has been appointed as Chief Marketing Officer.
Renato brings over 27 years of experience marketing iron ore,
including the last 14 years at Vale and MBR, where he was
responsible for global iron ore marketing activities. Prior to
working at Vale, Renato covered areas involving technical marketing
support, quality control systems, implementation, industrial
engineering, training and development, supply chain coordination,
production planning and product delivery. He was also a board
member of MBR and California Steel Industries, and a Vice President
of the Brazil-Japan Chamber of Commerce. Renato will play a key
role in London Mining's commercial and strategic development as
well as in operational performance initiatives as we enter new
markets with new customers.
Conference call
There will be a conference call for analysts and investors
hosted today by Graeme Hossie, CEO at 8.30am BST (UK).
Please see below for dial in details:
UK Toll Free 0800 279 4977
International dial-in +44(0)20 7136 2056
Confirmation code 4444102
Replay facility will be available on London Mining's homepage
for seven days after the call.
For more information please visit www.londonmining.co.uk or
contact:
London Mining Plc
Graeme Hossie, Chief Executive Officer
Rachel Rhodes, Chief Financial Officer
Thomas Credland, Head of Investor Relations +44 (0)20 7408 7500
Liberum Capital (Nominated Advisor/Broker)
Clayton Bush/Christopher Kololian +44 (0)20 3100 2000
J.P. Morgan Cazenove (Broker)
Neil Passmore / Ignacio Borrell +44 (0)20 7742 4000
Brunswick Group
Carole Cable / Rosheeka Field +44 (0)20 7404 5959
About London Mining
London Mining is focused on identifying, developing and
operating mines to become a mid-tier supplier to the global steel
industry. London Mining is producing high specification iron ore
from its Marampa Mine in Sierra Leone and developing two other iron
ore mines in Greenland and Saudi Arabia as well as a coking
operation in Colombia. All London Mining's assets have deliverable
production with potential for expansion. The Company listed on AIM
in London on 6 November 2009. It trades under the symbols LOND.L
(Reuters) and LOND LN (Bloomberg). More information about London
Mining can be found at www.londonmining.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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