London Mining Plc 30 YEAR EXPLOITATION LICENCE AWARDED FOR THE ISUA (3449R)

TIDMLOND

RNS Number : 3449R

London Mining Plc

24 October 2013

London Mining Plc

Quoted on London AIM (LOND LN)

("London Mining" or the "Company")

24 October 2013

30 YEAR EXPLOITATION LICENCE AWARDED FOR THE ISUA PROJECT IN GREENLAND

London Mining is pleased to announce that it has been awarded an exclusive 30 year exploitation licence for its 100% owned Isua Project in Greenland (the "Exploitation Licence"). This licence is a significant step in the process of seeking partners for the development of Isua.

Based on a 2012 bankable feasibility study, the Isua Project is expected to produce 15Mdmt/a of premium quality iron pellet feed concentrate with low impurities and is based on a one billion tonne resource which could be shipped year round from a dedicated deep water port. Detailed Environmental and Social Impact Assessments to international standards have been completed and have been subject to public consultation as part of the permitting process.

Within the Exploitation Licence, London Mining has agreed to incorporate a royalty structure ("Royalty") with the Government of Greenland. The Royalty, based on sales, is payable if combined withholding tax and corporation taxes are less than the calculated Royalty in a particular year, such that the Government receives a minimum amount. The royalty is structured with escalating rates: with the first five years at 1%, years 6-10: 3%; years 11-15: 4%, rising to 5% after year 16. The lower rate in the earlier years recognises the need to protect the payback period for initial development investment once the mine is brought into production.

The new fiscal agreement will have no material adverse impact on the net present value of the project.

Graeme Hossie, Chief Executive Officer of London Mining said: "We are very pleased today to receive the exploitation licence for the Isua iron ore project after many years of exploration and development work. Isua is an important project for Greenland and its development will help deliver key objectives for Greenland of economic growth and diversification from sustainable mining activity. The Isua project represents the potential of a significant 15mtpa supply of very high quality iron ore concentrate to the global steel industry. Although new projects in iron ore currently do face funding challenges, we believe Isua's high quality product segment will become increasingly important to steelmakers to balance the growth in lower quality iron ore supply and the increasing importance of pellets in the evolving iron ore market. While London Mining's operational and capital allocation focus remains firmly on the recently announced expansion and mine life extension at its operating mine in Sierra Leone, the granting of the 30 year exploitation licence for Isua is an important validation of the extensive work to date and provides a solid basis for discussions with potential funders and partners required to move the project forward."

For more information please visit www.londonmining.com or contact:

 
 
 London Mining Plc 
  Rachel Rhodes, Chief Financial Officer 
  Benjamin Lee, Head of Corporate Development      +44 (0)20 7408 7500 
 For Greenland / Denmark media 
  Impact Communications 
  Per Bech Thomson                                       +45 3137 3133 
 For UK media 
  Brunswick Group LLP 
  Carole Cable / Rosheeka Field                    +44 (0)20 7404 5959 
 Liberum Capital (Nominated Advisor/Broker) 
  Tom Fyson / Clayton Bush / Ryan de Franck        +44 (0)20 3100 2000 
 J.P. Morgan Cazenove (Broker) 
  Ben Davies / Ignacio Borrell                     +44 (0)20 7742 4000

About the Isua Project

Isua is located 150km north-east of Nuuk and 110km from a proposed deep seawater port. The projectis expected to produce a premium quality 70% Fe pellet feed concentrate with low impurities. In addition, Isua benefits from its position in the warmer south-west corner of Greenland which allows for year round shipping. A bankable feasibility study (BFS) was completed by London Mining in 2012 and identified for a 15Mdmt/a operation based on a resource of over 1.1 billion tonnes of iron ore.

About London Mining

London Mining is an expanding producer of high specification iron ore concentrate for the global steel industry and is focused on identifying, developing and operating sustainable mines. London Mining commenced sales from its 100% owned Marampa Mine in Sierra Leone in 2012 and expects to reach production capacity of 6Mdmt/a in 2014. Marampa has sufficient resources to support a staged expansion to over 10Mdmt/a. London Mining has also completed bankable feasibility studies outlining plans for a further 20Mdmt/a 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)

This information is provided by RNS

The company news service from the London Stock Exchange

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