SETTLEMENT WITH FRASER TURNER OVER MARAMPA ROYALTY (0483F)

TIDMLOND

RNS Number : 0483F

London Mining Plc

11 June 2012

London Mining Plc

Quoted on London AIM (LOND LN)

("London Mining" or the "Company")

11 June 2012

SETTLEMENT WITH FRASER TURNER OVER MARAMPA ROYALTY

London Mining announces that it has reached an agreement with Fraser Turner Limited ("Fraser Turner") in connection with the termination of a consulting agreement dated 28 February 2007 (the "Consulting Agreement") and settled the dispute relating to a claim for a 2% revenue-related royalty brought by Fraser Turner over production at the Marampa Project in Sierra Leone with immediate effect.

The Consulting Agreement under dispute contemplated the payment of certain royalties relating to London Mining's iron ore production at Marampa. These royalties included a 10USc/t sold royalty that was not in dispute and a 2% royalty on revenue from the Marampa Project, which was disputed by London Mining.

The key terms of the agreements are as follows:

   --           The Consulting Agreement has been terminated.

-- In consideration of the settlement of the dispute which has included a close out of the Consulting Agreement (including replacement of the undisputed 10USc/t royalty), London Mining has elected to:

o pay Fraser Turner a fee of USD2.35 million in cash and a further fee of GBP2.38 million which London Mining has elected to satisfy by the issue of 1 million ordinary shares in London Mining at a price of GBP2.38 per share (the "Shares"). If the Shares and any benefits derived from such Shares are worth less than GBP7 per a share at the end of three years or earlier in certain circumstances, an additional payment equal to the differential must be paid to Fraser Turner, which London Mining can elect to satisfy in shares (the "Top-up"); and

o pay a total royalty equal to 0.3% of the price received by London Mining for iron ore sales from Marampa, net of the existing royalty payable to the Government of Sierra Leone on an FOB basis.

-- London Mining and Fraser Turner have agreed that the Shares will be subject to a lock-up for a period of 2 years, provided that the Shares will be released from the lock-up in certain circumstances, including in the event that London Mining's obligation to pay the Top-up Amount falls away as a result of London Mining's share price exceeding GBP7.

-- It has been agreed that London Mining will have a first right of refusal on any potential iron ore mining opportunities in West Africa identified by FT Services (Oxford) Limited pursuant to an agreement entered into between them (the "Services Agreement").

-- The parties have agreed that half of the Shares, and any proceeds resulting from the sale thereof, will be held by a third party custody agent for a period of 2 years, which may be extended to 3 years in certain circumstances. In the event of a material breach of the Services Agreement, Fraser Turner has agreed to surrender half of the Shares and any proceeds resulting from the sale of such shares to London Mining, and that the amount of the Top-up (if any) shall be reduced by 50%.

-- London Mining will apply for admission of the Shares to trading on AIM. Admission is expected to become effective on 15 June 2012.

For more information, please contact:

 
 London Mining Plc 
  Graeme Hossie, Chief Executive Officer 
  Rachel Rhodes, Chief Financial Officer 
  Rohit Bhoothalingam, Head of Legal           +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

MSCFMGMVGGNGZZZ

London Mining (LSE:LOND)
Historical Stock Chart
From Jun 2024 to Jul 2024