TIDMLOND
RNS Number : 5128A
London Mining Plc
21 March 2013
London Mining Plc
Quoted on London AIM (LOND LN)
("London Mining" or the "Company")
21 March 2013
AUDITED FINANCIAL RESULTS FOR THE FULL YEAR ENDED 31 DECEMBER
2012
Focussed on cash generation and building to 5Mtpa capacity in
2013
Highlights
Marampa, Sierra Leone (100% owned)
-- Production target of 1.5Mdmt achieved for 2012 at operating costs of USD 77/dmt
-- Sales of 1.3Mwmt in 2012 with stockpile to be reduced to operating levels over H1 2013
-- Engineering commenced on 5Mtpa extension (base case)
-- Growth option studies undertaken with completion of bankable
feasibility study for potential expansion to 9Mtpa
-- New Mining Licence Agreement ratified in April 2012 setting
out stable 10 year fiscal platform for growth
Other projects
-- Bankable Feasibility Study completed in April for 15Mtpa operation at Isua, Greenland
-- Exit from Colombia is in line with our strategy to focus our
resources on our core iron ore assets
Corporate
-- Michael Miles appointed to the Board
Financial
-- Revenue of USD 120.6 million from sales of 1.3Mwmt of iron ore concentrate from Marampa
-- USD 22.2 million reduction in Group EBITDA loss from
continuing operations of USD 14.2 million (2011: loss USD 36.4
million) with USD 20.4 million profit contribution from Marampa
operations
-- USD 66.3 million net provision on Colombian assets following
strategic review; an active programme to sell the business has been
initiated
-- USD 247.7 million net cash inflow from financing, including
USD108.9 million from BlackRock royalty transaction
-- USD 192.0 million net cash outflow from investing activities,
primarily on Marampa expansion
-- Strong balance sheet to complete expansion to 5Mtpa; cash at
31 December 2012 was USD 92.7 million
Post period highlights
Marampa, Sierra Leone (100% owned)
-- Pride of Marampa operational and loading of ungeared vessels
to commence at the beginning of Q2 2013
-- Second plant commissioning complete and producing concentrate
-- Expansion to 5Mtpa run rate on track for end of 2013
-- Production guidance of 3.3Mt to 3.6Mdmt and sales of 3.6 to 3.8Mdmt for 2013
-- ROM stockpile and other wet season mitigation measures in place.
-- Forecasted capital expenditure for 5Mtpa operation increased
from USD 320 million at HY to USD 340 million
-- Operating costs expected to fall to USD 50/t at 5Mtpa run rate
Financial
-- Restructure and increase of USD 90 million corporate debt
facility to USD 165 million with Standard Chartered, Rand Merchant
Bank and Ecobank
-- Draw down of facility expected in Q2 2013 enabling
consolidation of existing secured and unsecured loans
Corporate
-- Alan Ferguson joins the Board and Michael Miles succeeds
Colin Knight as Non Executive Chairman
-- Colin Knight and Graham Mascall retiring from the Board
Commenting on the results Graeme Hossie, CEO, said: "We are
delighted with the strong operational and financial performance of
Marampa which has generated positive earnings for the year. High
grade iron ore was produced and shipped throughout the year,
production targets were met and our expansion plan remains on track
as we ramp up to 5Mtpa in 2013.
In 2012 we have looked to consolidate and prioritise our
resources and focus our activities and projects. We completed
bankable feasibility studies for further expansion at Marampa and
for Isua. As a result we have a very clear idea view of their value
generation potential and next steps for our iron ore business. We
took a decision to place the Colombian operation into care and
maintenance which is consistent with our strategy to deliver
shareholder value through significant near term funded production
growth, cost optimisations and growing cash flows.
While the outlook for iron ore pricing continues to be volatile,
we are focussed on cash generation. Our priority is to complete a
robust 5Mtpa operation, while focussing on reducing costs and
delivering operational improvements across the business.
As we develop our business we are pleased to announce the
transition of Michael Miles to Non Executive Chairman, I would like
to acknowledge Colin Knight's contribution over his eight year term
as non Executive Chairman. His tenure has seen London Mining move
from developer to London listed producer with a high quality and
supportive investor base. We also welcome Alan Ferguson to the
Board. Alan's finance and mining experience will be invaluable as
we enter our next stage of development."
Operations
The year under review saw production of 1.5Mdmt of production
and over 1.2Mwmt of sales at Marampa. Operating costs were USD77/t
in 2012 and are on target to fall to USD50/t once the expansion to
5Mtpa is completed. The second plant has been commissioned and is
now producing concentrate. Production of 3.3 to 3.6Mdmt is expected
in 2013 with sales of 3.6Mdmt to 3.8Mdmt. The Pride of Marampa
floating offshore transhipment platform is now operational and
ungeared vessels are scheduled to commence loading at the beginning
of April. Capital expenditure to complete the initial 5Mtpa
operation has increased from USD 320 million to USD 340 million.
The scope of the new operation now includes increased power
generation, thickening and pumping capacity as well as an
additional belt filter and shore protection at the Thoyfeyim River
Terminal. These items will contribute to a more robust and
efficient 5Mtpa operation with management continuously looking for
opportunities for improvement.
Financial Summary
The EBITDA loss for the year decreased by USD 22.2 million to
USD 14.2 million largely due to a USD 20.4 million EBITDA
contribution from Marampa. The company has retained a strong
balance sheet to fund all projects having raised net USD 247.8
million from financing activities in 2012 and deployed USD 192.0
million net cash on investing activities in 2012. Cash was USD 92.7
million as at 31 December 2012. Post period we have completed our
corporate debt restructuring, increasing the facility to USD 165
million through a new facility with Standard Chartered, Rand
Merchant Bank and Ecobank. The increased facility, which prior to
drawdown down is subject to certain conditions precedent, will
enable the consolidation of the existing secured and unsecured
loans into one secured facility at a relatively low interest cost.
The restructured secured debt facility strengthens the Group
balance sheet to ensure completion of the expansion to 5Mtpa in
2013.
Board development and restructuring
In December 2012 Michael Miles joined the Board as Non-Executive
Director and Chairman elect. Michael will take over as Chairman of
the Board today. Michael brings extensive and varied global
business and FTSE 100 board governance experience to the London
Mining Board. He was until recently chairman of Schroders, and
previously chairman of Johnson Matthey Plc. He has served on the
boards of BP (including as chairman of its pension trustees), China
Britain Trade Group, Hong Kong Association, Balfour Beatty and
Portals. Through his former chairmanships and earlier career with
the Swire Group and Cathay Pacific, Michael has extensive and
unrivalled experience in the Far East / China, the most important
market for iron ore and a key part of London Mining's long term
customer and partnering strategy. After almost eight years as
Non-Executive Chairman, Colin Knight is to retire from the Board at
the AGM on 22 May 2013.
As part of the ongoing development of the Board, Alan Ferguson
joins today as a Non Executive Director and will chair the Audit
Committee following the Company's AGM on 22 May 2013. Alan is a
chartered accountant, currently a Non Executive Director on the
boards of Weir Group Plc, Croda International Plc and Johnson
Matthey Plc, and has held the position of Finance Director with
Lonmin Plc, BOC Group Plc and Inchcape Plc. Alan replaces Graham
Mascall, who retires today from the London Mining board after three
years as a Non-Executive Director to focus on other business
interests.
Earnings Summary
Year ended 31 December
2012 2011
USD'000 USD'000
EBITDA (continuing operations) (14.2) (36.4)
Sierra Leone 20.4 (12.8)
Greenland (2.3) (1.5)
Saudi Arabia (0.6) (0.7)
Corporate (31.7) (21.4)
Depreciation (13.0) (1.2)
Net operating loss (continuing operations) (27.2) (37.6)
Impairment - (3.3)
Fair value gain on royalty arrangement 7.5 -
Net finance (charge)/income (38.3) 0.2
Taxation 29.7 (20.6)
Net loss after tax (continuing operations) (28.3) (61.3)
Result from discontinued operations (79.5) 1.3
Loss for the year (107.8) (60.0)
Please find the full operations and financial review, as well as
the company's presentation of the period enclosed.
http://www.rns-pdf.londonstockexchange.com/rns/5128A_-2013-3-21.pdf
http://www.rns-pdf.londonstockexchange.com/rns/5128A_1-2013-3-21.pdf
Webcast and conference call
There will be a webcast and conference call for analysts and
investors hosted by Graeme Hossie (CEO), Rachel Rhodes (CFO) and
Jim North (COO) at 9.00am GMT today.
The presentation will be available via a live webcast, a link to
the webcast can be found on London Mining's homepage,
www.londonmining.com.
The webcast will include audio from the conference call and
synchronised power point slides. You will not be able to post
questions through the webcast.
Please use the following numbers and conference ID to dial in to
the conference call:
Country Number
International dial-in +44(0)20 7136 2051
UK Toll Free 0800 279 4841
Confirmation code 2009478
There will be a replay facility available on London Mining's
homepage after the webcast.
For more information, please 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)
Christopher Kololian/Tom Fyson +44 (0)20 3100 2000
J.P. Morgan Cazenove (Broker)
Ben Davies/Ignacio Borrell +44 (0)20 7742 4000
Brunswick Group LLP
Carole Cable / Rosheeka Field +44 (0)20 7404 5959
About London Mining
London Mining is an expanding producer of high specification
iron ore for the global steel industry and is focused on
identifying, developing and operating sustainable mines. London
Mining commenced sales from the Marampa Mine in Sierra Leone in
2012 and expects to reach production capacity of 5Mtpa in 2013. A
bankable feasibility study was completed in 2012 on an expansion
plan to 9Mtpa and a prefeasibility study was completed in 2011
which shows that Marampa has resources to support a staged
expansion to over 16Mtpa. London Mining has also completed bankable
feasibility studies outlining plans for a further 20Mtpa of iron
ore production by developing mines in Greenland and Saudi Arabia.
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.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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