JOHANNESBURG (miningweekly.com) – UK-based iron-ore-miner London Mining on Friday entered into a joint venture (JV) with Atacama Mining Resources to explore iron-ore opportunities in Chile.

London Mining CEO Graeme Hossie said that the venture would bring a strong pipeline of future development potential to the group.

Atacama, through its Chilean subsidiary, holds options over concessions to iron-ore deposits in the Atacama region of northern Chile. Under the agreement, London Mining had subscribed for 50% of the shares of Atacama.

London Mining has also agreed to make additional loans of $5-million to Atacama to fund acquisitions of a number of concessions in the area and to get exclusive rights from its JV partners on future iron-ore prospects in Chile.

The loans would be repaid to London Mining from the earlier of the first sales of ore made by the venture or third-party funding.

The subscription by London Mining in Atacama is in consideration for the waiver by the company of previously advanced convertible loans of $5-million.

The Atacama projects are located within a short distance from a number of potential port opportunities and logistics arrangements for export to China are being investigated.

"We are currently undertaking resource definition activities and investigating the potential to obtain early production with very low investment by Atacama," said Hossie.

London Mining owns an iron-ore mine in Sierra Leone, as well as iron-ore projects in Greenland, Saudi Arabia and China. It also has a coking coal development project in Colombia.

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