JOHANNESBURG (miningweekly.com) – Aim-listed London Mining achieved record production and sales volumes at its 100%-owned Marapa mine, in Sierra Leone, during the first quarter of its 2013 financial year, CEO Graeme Hossie reported on Thursday.

Production at the operation during the quarter was 706 000 wet metric tons (wmt) of iron-ore concentrate, marking a 29% quarter-on-quarter increase and more that 220% growth compared with the previous corresponding period.

The company was in the process of expanding the Marampa mine, which started production in 2011, to produce five-million tons a year of iron-ore by the end of 2013. However, the resource could support a production capacity of over 16-million tons a year.

"We are well advanced with the next stage of expansion to achieve a run rate of five-million tons a year by the end of the second half of this year and are reviewing high-return opportunities for the further development of Marampa,” Hossie stated.

The commissioning of a second plant at Marapa had been completed and a yearly capacity of 3.6-million dry tons a year achieved for the combined processing operation.

A production guidance of 3.3-million dry metric tons to 3.6-million dry metric tons was maintained for the year, while the company was reviewing opportunities for high-return investment in volume and operating cost optimisations.

A yearly export rate of 3.9-million wet tons a year was reached in April, following the arrival of the first self-propelled barge, with a second self-propelled barge expected to arrive in June. Further barging capacity would be added in line with production requirements.

London Mining’s export capacity currently exceeded production and a reduction of the stockpile to around one shipload was on track for the first half of the 2013 calendar year. A stockpile of less than 400 000 wet metric tons (wmt) of concentrate, which met the specification of the existing offtake agreements, was also in place.

The company achieved record sales volumes of 589 000 wmt in the period under review, a 52% increase on the previous quarter.

The average unhedged received price after deduction of freight in the first quarter was $115 per dry metric ton free-on-board, up from $93 a dry metric ton free on board in the last quarter of 2012.

Further, shipments had started under the off-take agreement with coal marketer Vitol.

Meanwhile, Hossie noted that the company was making progress with its Isua project, in Greenland. “We are encouraged following our initial engagement with the new government of Greenland and continue to expect completion of the exploitation permitting process in 2013."

A bankable feasibility study for the Isua project, which was completed in 2012, showed the potential for a further 15-million tons a year of high-quality iron-ore production.