(Adds CEO and analyst comments, share movement)
By Abhiram Nandakumar
July 17 London Mining Plc raised
quarterly production at its iron ore mine in Sierra Leone after
upgrading a processing plant and said it expected to find a
strategic partner by the end of the year.
Iron ore production at the Marampa mine rose 21 percent in
the second quarter. London Mining stood by its full-year 2014
production target of 4.9 million to 5.4 million wet tonnes of
iron ore concentrate.
However, shares in the AIM-listed company fell as much as
3.5 percent after rising 6 percent in early trading. Traders and
analysts attributed the fall to profit-taking after the stock
gained 85 percent in a month from a life-low of 26.75 pence.
"Despite a good operational showing, the performance of the
stock is likely to continue to be dictated by movements in the
iron ore price," Citigroup analyst Michael Flitton said in a
note to clients.
Iron ore miners worldwide have been hit by weakening prices,
even as major producers like Rio Tinto Plc and
Vale SA ramp up output and cut costs.
Iron ore prices fell to a 21-month low of $89 a tonne in
mid-June as supply continued to outpace demand in China.
Benchmark 62-percent grade iron ore for immediate shipment
to China .IO62-CNI=SI was unchanged at $98 per tonne on
London Mining Chief Executive Graeme Hossie said the company
was reacting well to lower iron ore prices.
"(We are) driving our costs lower and ensuring we can get
more for our product, bringing the grade back higher and getting
offtake partners that are paying us more per tonne," he said.
The company, which started shipping ore from Marampa mine in
2011, produced 1.17 million wet metric tonnes in the second
quarter, adding that it did not expect an outbreak of the Ebola
virus in Sierra Leone to affect production at the mine.
London Mining, which earlier indicated that it planned to
divest a minority stake in Marampa, said it was in talks with
banks to secure a $25 million short-term loan. The miner had
drawn down a $17.5 million loan from Swiss trader Vitol as part
payment on 500,000 tonnes of future exports.
Shares of the London-based miner were down 2.5 percent at
48.25 pence at 1021 GMT.
(Reporting by Abhiram Nandakumar in Bangalore; Editing by Robin
Paxton and Gopakumar Warrier)