London Mining Venture

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 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 two other mines in Greenland and Saudi Arabia. In addition London Mining is producing from a coke operation with coking coal resource potential in Colombia. The Company listed on London AIM on 6 November 2009.

Wits Basin owns the Bates-Hunter Gold Mine in Central City, Colorado. Discovery of gold at the Bates-Hunter Mine in 1859 kicked off the Colorado gold rush and established Denver as a major American city. All mines in the area went dormant in 1936. This mining district has historically produced more than 4 million ounces of gold. Twenty-five percent (25%) of all the gold mined came from the area immediately surrounding the Bates-Hunter mine. Wits Basin’s property controls the 15 principal veins underlying the mine

London Mining is pleased to announce that it has signed a letter of intent with Wits Basin Precious Minerals, Inc. (“Wits Basin“) which may result in London Mining becoming a 50/50 joint venture partner for Wits Basin’s iron ore project in Ma Anshan in the People’s Republic of China. The potential transaction remains subject to due diligence and finalisation of definitive legal documents.

London Mining Framework

As London Mining continue to develop our mining assets, we are ever more aware of how important sustainability is to our operations. It is at the heart of how London Mining develop a lasting business, make a long term contribution and deliver value.

London Mining (“London Mining” or the “Company”) announces that China Global Mining Resources Limited (“CGMR”), a subsidiary of the China Global Mining Resources (BVI) Limited joint venture (“JV”) which is held 50:50 with Wits Basin Precious Minerals Inc (“Wits Basin”), has received a claim regarding the payment of the deferred consideration for the purchase of the Sudan processing plant.  The claim is to be determined through arbitration.  CGMR is in discussions with the sellers of the plant regarding this claim and a resolution (either by agreement of through arbitration) is expected in the next 6 months.

London Mining Plc is incorporated and registered in the UK, and is a UK-based iron ore mining company with assets in Brazil, Sierra Leone, Greenland and Mexico. The company has a diversified portfolio with existing production and significant planned expansion. London Mining’s management and board of directors have extensive mining and finance experience. The company has already raised privately approximately USD 125 million in equity and an additional USD 60 million in debt and acquired an operating iron ore mine in Brazil in May 2007.

Flooding are the most common form of natural disaster in the UK and are now part and parcel of the British winter months; widespread flooding happens at least once a year in the UK. Earlier this year, torrents of rain hit the UK, with Cumbria the worst-affected area; heavy, prolonged rainfall caused bridges and road networks to collapse and four people lost their lives. In 2007, Yorkshire was hit hard by floods and some people are still recovering from the destruction caused by the floods three years later; the floods killed six people and left hundreds of people homeless and thousands without electricity.

Flooding can come from various sources, from coastal waters, from rivers (also known as fluvial flooding) and surface water flooding. Of all these sources London is most vulnerable to surface water flooding. Heavy rainfall can swiftly overwhelm the drainage network, leading to flooding  of low-lying areas.

London Mining Announcements

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 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 two other mines in Greenland and  Saudi  Arabia. In  addition London  Mining  is producing from a coke operation with coking coal resource potential in Colombia. The Company listed on London AIM on 6 November 2009.

London Mining (“London Mining” or the “Company”) announces that China Global Mining Resources Limited (“CGMR”), a subsidiary of the China  Global  Mining Resources (BVI) Limited joint venture (“JV”) which is held 50:50 with Wits Basin Precious Minerals Inc (“Wits Basin”), has received a claim regarding the payment of the deferred consideration for the purchase of the Sudan processing plant.  The claim is to be determined through arbitration.

CGMR is in discussions with the sellers of the plant regarding this claim and a resolution (either by agreement of through arbitration) is expected in the next 6 months.  The Sellers have no legal or commercial recourse to London Mining or any subsidiary other than the CGMR JV with respect to this claim.

London Mining hires former Schroders chairman

LONDON – Iron-ore miner London Mining has hired Michael Miles to be its chairman, appointing the former chairman of fund manager Schroders to its board with immediate effect.

The miner, which produces iron-ore in Sierra Leone, said it current chairman, Colin Knight, would step down from the role at the start of 2013, after almost eight years.

“This is the right time for a new chairman to steer the company as it takes its projects in Sierra Leone and Greenland through to their next phases,” Knight said.

Miles, who has also been chairman of speciality chemicals company Johnson Matthey, has experience in China, the world’s largest consumer of iron ore, through an early career in Cathay Pacific.

He stepped down as chairman of Schroders in May after nine years.

Parliamentary Debate on UK-listed mining companies

Wednesday’s Westminster Hall debate in the UK Parliament on UK-listed mining companies included several mentions of London Mining Network and our report, UK listed mining companies and the case for stricter regulation.

John McDonnell MP singled out GCM Resources for particular criticism, noting the extreme damage that would be done by its Phulbari opencast mine in Bangladesh were the project to go ahead.

 

GCM’s AGM is to take place on 20 December in London.

John McDonnell also spoke about Anglo American, BHP Billiton, Vedanta and Xstrata.

Flooding are the most common form of natural disaster in the UK and are now part and parcel of the British winter months; widespread flooding happens at least once a year in the UK. Earlier this year, torrents of rain hit the UK, with Cumbria the worst-affected area; heavy, prolonged rainfall caused bridges and road networks to collapse and four people lost their lives. In 2007, Yorkshire was hit hard by floods and some people  are  still  recovering  from  the destruction caused by the floods three years later; the floods killed six people and left hundreds of people homeless and thousands without electricity.

TECHNICAL TEAM ADDITIONS

London Mining is pleased to announce the appointment of John Wonnacott, as the Project Director  for the Isua Project  in  Greenland  and  Rinaldo  Nardi  as  Senior Specialist  in  Mineral Processing and Plant Design.

John Wonnacott is a civil and geotechnical engineer with 30 years experience with particular expertise in the development of projects in cold weather climates. Most notably between 1997 and 2003 John was the Deputy Project manager and Chief Engineer of the Diavik Diamond Mine in Canada where he hired, led and directed a team of engineers responsible for the design and construction of a $1.3 billion new mine installation 100 Km south of Arctic Circle.

Rinaldo Nardi is a mining engineer and is also a doctor in mineral engineering. He has 35 years experience including 25 years with Vale. Rinaldo has significant expertise of managing both iron ore and coal projects at the design, construction and start-up stages.

John and Rinaldo augment the project and technical services teams led by COO Luciano Ramos. Luciano’s team has recently been expanded to provide support for the continued fast track development of projects in China, Sierra Leone, Saudi Arabia and Greenland.

In the last quarterly report London Mining announced the hiring of Phillip Sterling, a metallurgical engineer with over 25 years experience with Samarco Mineração Rio do Norte, Savage River Mines and BHP Billiton, as General Manager for Mineral Processing, Engineering & Mining Operations, and Sergio Guedes, a geologist with over 20 years experience and formerly with CVRD and Rio Tinto, as General Manager for Mineral Resources.  Separately, David Keili, a Sierra Leone national with extensive western training in the US including an MBA, and 28 years experience in civil engineering and mining, was appointed as Project Director for the Marampa Project in Sierra Leone.

Luciano Ramos said “The success of any company is directly linked with the competency and capability of its team. London Mining’s investment in the right people has been the cornerstone of its success so far and we continue to build on our core of industry professionals with experience of some of the world’s best mining projects. Our aim is to have a technical services and project management capability that will enable us to execute our ambition to become a leading mining company.”

Iron Ore Green Land

Isua is located 150km Northeast of Nuuk and 100km from a proposed deep seawater port. Isua will produce a premium quality 70% Fe pellet feed concentrate with low impurities and benefits from its position in the warmer south-west corner of Greenland which allows for year round shipping.

In February 2011 London Mining released the results of a scoping study compiled by SNC Lavalin International Inc. (“SLII”), for the Isua iron ore project in Greenland. The scoping study considered a 15 year life mine with 15Mtpa open pit, processing plant, pipeline and a deep water port.

A bankable feasibility study (“BFS”) with AACE Class 3 estimates for a 15Mtpa operation considering a 10 year mine life based on the currently available amount of Indicated resources was completed in March 2012. A 15 year scenario was also evaluated to demonstrate the greater potential of the asset. 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. The detailed results of the BFS for the next stage of the project are outlined below.

Highlights of the Bankable Feasibility Study

Study date	Scoping Study February 2011	BFS March 2012
Annual production (Mtpa)	15	15
Mine life (years)	15	10 with possible extension to 15
Operating cost  (USD/t concentrate)	30	46
Capital expenditure (USD billions)	2.05	2.35
Capital Intensity (USD/tpa)	136	157

Resources and mine life

As part of the BFS programme, 7,656m of drilling was completed during the summer of 2011 which forms the basis for an updated resource statement. Snowden now estimate a total resource for Isua of 1,107Mt grading 32.3% Fe. This improved result has increased the resource by 10% in resource tonnage from the March 2011 resource statement. The modest reduction in Fe grade to 32.6% is the result of the decision to report internally diluted head grades due to incorporation of waste bearing structures in the block model rather than consideration of a selective mining method.

The new resource represents a substantial 82% increase in Indicated resources from 209Mt to 380Mt which is sufficient to support a 10 year mine life. Potential to extend the mine life could be achieved though further drilling necessary to convert Inferred resources into the Indicated category.

Summary of Isua Mineral Resource at March 2012 reported at a 20% Fe cut-off grade and constrained inside an ultimate pit shell.

Category	Tonnes (Mt)	Fe (%)	Al2O3 (%)	SiO2 (%)	S (%)	P (%)
Indicated	380	32.6	2.4	41.8	0.23	0.03
Inferred (1)	727	32.1	2.3	42.3	0.22	0.03
Total	1,107	32.3	2.4	42.2	0.22	0.03

(1) 83% or 607Mt of the inferred resources are extrapolated beyond the current drilling coverage.

The 2011 drilling campaign also confirmed additional mineral resource potential originally indentified by Rio Tinto in 1997. This area of mineralisation potential has been identified as a down dip extrapolation of the Isua banded iron formation (“BIF”) bearing the existing resource. Part of this mineralisation potential is comprised of an area of hematite BIF which has been interpreted at the top of the BIF unit. This appears to be underlain by more typical magnetite BIF.

Summary of the mineralisation potential at the Isua deposit at end December 2011.

Potential mineralisation type	Potential tonnage range (Mt)	Potential Grade Range (Fe%)
Magnetite BIF	800 to 1200	30-33
Hematite BIF	150 to 300	>35

(2)  Snowden considers this material to be an indication of Mineralisation Potential only and makes no guarantees that this material can or will be converted to a Mineral Resource or an Ore Reserve at any time in the future following the collection of additional data.

 

Londoin Mining developing trends

Developing trends in the exploration and production of iron ore

Annual iron ore demand is expected to grow strongly over the next 10 years, with CRU Strategies projecting an increase of 540Mt between 2009 and 2019 to a total of 2,169Mt. Importantly a significant driver for the global iron ore market is the demand from the seaborne market.

China has grown its domestic iron ore supply strongly over the past few years, with a compound annual growth rate of approximately 20% between 2002 and 2008. However, Chinese domestic production has peaked and started to fall, with CRU Strategies believing that the fall in spot prices has accelerated that process. The falling production is expected to cause China to become increasingly reliant on seaborne sources of supply. Chinese supply may be brought on stream to meet rising local demand, but this capacity will have to compete economically with alternative seaborne sources. The recent examples of Chinese steel companies looking to invest in overseas iron ore projects is an indication that there is little expectation of significant new ‘lower cost’ supply from within China.

By 2013, the world will need an additional 270Mt of seaborne capacity compared with 2008 according to CRU Strategies1, with this rising to 480Mt by 2019. The Directors believe that the existing expansion plans of the major established mining companies in Australia and Brazil, which largely consist of low cost production, are not likely to be sufficient to meet anticipated demand in the seaborne market over the next decade. Although the estimated supply, taking all potential expansions and new projects into account, would be far in excess of anticipated demand, financing risk is a significant risk in delivering these projects and as such delivery of these projects is not assured.

The Directors believe that the projects most likely to be built to meet supply are typically likely to be projects in Australia, West Africa and India. These projects will be required if the world production of iron ore is to be sufficient to meet demand over the next 10 years; however these are not in general low cost projects. The long-run price of iron ore must be high enough to induce these projects to come on stream.

London Mining believes its ability to quickly appraise projects and fast-track development to production will allow it to become a profitable developer of iron ore capacity for the steel industry.

Objective & Strategy

London Mining’s objective is to identify, develop and operate scalable mines to become a mid-tier supplier to the global steel industry. The Group’s principal assets have actual or anticipated production and the ability for further expansion through either upgrading resources or acquisition.

The strategy of London Mining is to focus its activities on deliverable iron ore projects, where the key features are scalable production, financing opportunities and a clear route to market. The ability to accelerate projects through to efficient producing mines, utilizing its experienced technical and operating team, is an important part of the Company’s strategy.

London Mining CGMR

CGMR has engaged a highly professional management team that includes Mr William Green, Mr Loong Keat Tan, and Dr Clyde L Smith to manage the operations. Mr Green is a graduate of the University of Pennsylvania’s Wharton School of Business and has more than 15 years of business experience in Asia. Mr Tan will guide the mining operations: a former mining executive who served Rio Tinto for 21 years as General Manager of various projects including Hamersley Iron’s Mount Tom Price Mine in Western Australia and Bougainville Copper Ltd.’s mine in Papua New Guinea. Mr Tan also served Rio Tinto as head of their Hong Kong and Beijing offices. Dr Smith, who will guide geologic studies, is an experienced mining industry geologist who has been responsible for discovery of five ore deposits in Canada, the U.S., and Mexico.

As at 29 October 2008, XNS and Sudan had approximately 400 employees.

CGMR intends to create additional value by reducing costs through operating efficiencies and executing expansion plans, with a run rate target for XNS of 1.2 mtpa production capacity during 2011. Further production increases and efficiencies would arise from the addition of a new mining operation at Matang, located about 9km WSW of the Sudan plant. Matang has a 21.88million tonnes magnetite resource averaging 25.15% Total Fe estimated by No. 322 Geological Brigade to Chinese standards (not JORC) in December 2003.