Funding for London Mining Progresses; Shares Hit Record Low

By Admin
Iron ore miner London Mining PLC (LSE:LOND) has entered into detailed discussions with a potential strategic investor for the expansion of the companys...

Iron ore miner London Mining PLC (LSE:LOND) has entered into detailed discussions with a potential strategic investor for the expansion of the company’s Marampa iron ore mine in Sierra Leone.

The LSE-listed company, which is battling record-low prices of iron ore, agreed last week to a $30 million revolving, two-year pre-export financing facility with Afreximbank that required approval from its existing lenders.

“[The] funds [secured] from Afreximbank are not expected to be available in the required time period with discussions on structure ongoing. The company's lenders are working constructively with us to enable investment into the group and, in addition, are currently considering the provision of further finance,” the company said in a statement.

Although it would take several weeks to implement, if the proposed investment comes through, it would enable a material cash injection into the company, significantly diluting the existing equity and lead to a revised capital structure of the company.

London Mining also announced its lenders were considering the provision of further finance and that they were supportive of the process.

"The requirement for a revised capital structure indicates that the banks need be involved in the strategic partner negotiations, presumably adding to the delay," analysts at Investec Securities said.

Shares hit record low

News of the company’s insufficient operating cash sent the miner’s shares plunging on Monday, falling 59 percent to a record low.

According to Reuter, London Mining has trimmed its full-year production forecast and deferred a $175 million extension at its Marampa mine by two years and put off a $20 million of non-essential capital expenses on the mine.

The news comes one week after it said it would end an iron ore supply contract with Glencore due to a payment dispute.


Featured Articles

China increases copper import pace, following price plummet

In August, China reached a 26% rise - representing a 100,000+ tonne increase - in copper imports year-on-year, largely driven by product price drops

Ford criticises “inefficient” government mining permissions

In a letter to the US Department of the Interior, the car giant Ford has asked the American government to speed up its current mining permission process

Aggreko and Labyrinth Resources’ sustainable power project

Labyrinth Resources has been working with Aggreko to complete a virtual pipeline power project, which is designed to aid the sustainable energy transition

Despite regional ban, crypto miner Canaan doubles profits

Digital Mining

The future of all-electric sustainable mining technologies


Anglo American first half earnings decline 28 percent

Supply Chain & Operations