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UPDATE 1-London Mining forecasts surge in output at Sierra Leone mine
March 21, 2013 / 11:21 AM / 5 years ago

UPDATE 1-London Mining forecasts surge in output at Sierra Leone mine

By Brenton Cordeiro

March 21 (Reuters) - London Mining Plc reported a smaller full-year loss, helped by higher iron ore production at its Marampa mine in Sierra Leone, and said it expected output from the mine to more than double in 2013.

The miner said it expected to produce between 3.3 million and 3.6 million dry metric tonnes in 2013, and forecast sales in the range of 3.6 million to 3.8 million dry metric tonnes.

The sales forecast includes a stockpile of around 390,000 wet metric tonnes of ore the company kept aside at the end of 2012 as it sought to ship the ore at higher prices.

Iron ore prices have rebounded from their 2012 low of $87 per tonne and are now at roughly $134, backed by demand from China as the country’s steel mills replenish their stocks.

London Mining said its plan to expand capacity at Marampa to 5 million tonnes per year by the end of 2013 was on track.

The company said it had started looking for strategic partners as it plans to eventually boost Marampa output to 16 million tonnes per year.

“Marampa is a strong-value proposition producing really high-quality ore and we’ve got more ore to come that we haven’t placed with either Glencore or Vitol, so there’s potential for further finance-related offtake arrangements there as well,” Chief Executive Graeme Hossie said on a post-earnings call.

The company, which also has operations in Greenland, Saudi Arabia and Colombia, said it was in talks with potential partners for its Isua magnetite iron ore project in Greenland.

London Mining’s loss before interest, tax, depreciation and amortisation narrowed to $14.2 million in the year ended Dec. 31 from $36.4 million a year earlier.

Full-year production of 1.63 million wet metric tonnes, or 1.52 million dry metric tonnes, was ahead of its target of 1.5 million dry metric tonnes, the company had said in January.

London Mining shares, which have halved in value over the past year, were up marginally at 136 pence at 1030 GMT on Thursday the London Stock Exchange.

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