London Mining plans to raise $90m through an ordinary share offering to increase development and production at the Marampa iron ore project in Sierra Leone.
The equity offering combined with an expected $45m off-take prepayment financing, will allow the company to fund the first phase of development at the mine to 5Mtpa by 2014. The company hopes to increase production at the mine by 0.7Mt to 4.2Mt in 2013 and by 0.4Mt to 5Mtpa in 2014.
The combined funding will allow the company to undertake upgrade work and optimisation of the existing plant including installation of a ball mill and a gravity circuit.
London Mining CEO Graeme Hossie said that the equity offering will enable the company to accelerate the growth of the Marampa Project in Sierra Leone, and allow it to execute its long-term strategy and withstand short-term fluctuations in the iron ore price. "Marampa has already been significantly technically de-risked following the start of production of high-quality sinter concentrate from the first plant and the full commissioning of the logistics required to supply the seaborne iron ore market," he said.
JP Morgan Cazenove and Liberum Capital have been appointed to begin the book building process for the fundraising, subject to terms and conditions, which will consist of a firm placing and a conditional placing. The company will also begin a bankable feasibility study for the planned second phase expansion to 17Mtpa and other upgrade and optimisation programmes.