Marampa mine
JOHANNESBURG (miningweekly.com) – Iron-ore explorer London Mining’s share price on the LSE fell 96% in early morning trade as the company updated the market on its financing challenges.
The company’s share price fell to a low of 0.12p, compared with Tuesday’s close of 3.1p as the company said detailed discussions were ongoing with potential strategic investors and the company’s bank lender group but warned that, under the proposed investment structures, the board believed there would be little or no value remaining in the equity of the company and the other listed securities of the group.
By 12:00, the company’s shares were trading at 0.6p a share, down 80.64% compared with Tuesday’s close.
The London-listed company said that, with the iron-ore price at its lowest level since 2009, its Marampa operations, in Sierra Leone, had been put under considerable financial strain, with the outbreak of Ebola having introduced significant challenges to the strategic investor process and the ongoing operational performance of the business.
“The capital that is needed from an investor is significant and the proposals currently contemplate funding of the life-of-mine expansion and a cash injection into Marampa to allow the mine to continue operating,” the company said.
London Mining added that, while the company’s lenders remained supportive of the strategic investor process, they were not expected to provide any other short-term funding. The required short-term funding would, therefore, also be provided by a strategic investor should the discussions be successful.
“There can be no certainty at this time on the likelihood or timing of such an investment,” the miner said.