London Mining holding talks with investors; significant capital needed

By Caroline Salls

Pittsburgh, Oct. 8 – London Mining plc is in “detailed discussions” with potential strategic investors and the company’s bank lender group, according to a news release.

Under the structures currently proposed, London Mining said its board believes that there will be little or no value remaining in the equity of the company and the other listed securities of its group.

In addition, while the company’s lenders remain supportive of the process, they are not expected to provide any further short-term funding. As a result, this funding would be provided by a strategic investor if the discussions are successful.

With the iron ore price at its lowest level since 2009, London Mining said the Marampa operations have been put under considerable financial strain. In addition, the outbreak of Ebola in Sierra Leone has introduced significant challenges both to the strategic investor process that the company began in May and to the ongoing operational performance of the business.

According to the release, the capital that is needed from an investor is significant. Current proposals call for funding of the company’s life of mine expansion and a cash injection into Marampa to allow the mine to continue operating.

The London-based iron ore mining company has assets in Sierra Leone, Greenland, Saudi Arabia and China.

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