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London Mining successfully closes US$90mln placing


London Mining (LON:LOND) has confirmed the details of its US$90 million institutional share placing after the books closed yesterday.

In a statement, after Tuesday's trading on the LSE, the company revealed that it will issue 22.6 million shares at a price of 255p a share. This will raise a total of US$91 million.

The new funds will allow London Mining to increase the rate of iron ore production at the firm's flagship Marampa mine in Sierra Leone.

"(The) equity raise allows us to focus on near term delivery of production at Marampa, Phase 1 growth plans to 5Mtpa by 2014 and completion of our BFS for a further expansion to 9Mtpa," said chief executive Graeme Hossie.

Yesterday, the firm said the extra funds meant the expansion of the mine could be accelerated to reach 5 million tonnes per annum (Mtpa) by 2014 instead of the 4.6 Mtpa, previously targeted. Eventually, production at the mine could reach 17 Mtpa.

"The accelerated programme now includes earlier expansion of the existing plant, accelerated development of the second processing plant and earlier than expected enhancement of logistics required to ensure delivery of higher volumes of production," it had said.

The early funding of the expansion programme will allow building to begin before the wet season in Sierra Leone and means the construction teams used on the existing Marampa operation can be retained.

Marampa production is expected to be unchanged at 1.5Mtpa in 2012, increased by 0.7Mt to 4.2Mt in 2013 and by 0.4Mt to 5Mtpa in 2014.

“This increased production provides the operation with significant economies of scale, improving near term operating margins and secures the development of the infrastructure enhancements and support services required for a larger, longer life operation,” the company also said.

The plan provides London Mining with significantly increased cash flow and takes advantage of expected higher pricing over the next three years.

"The expected increased cash flow will also strengthen its capability to self-fund the future expansion at Marampa to 9Mtpa," it added.

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