Sierra Leone News:London Mining collapses into administration

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Marampa Iron Ore miner London Mining has gone into administration, one week after it had announced funding problems resulting in its shares crashing and becoming worthless. In a statement issued yesterday Thursday 16th October, the Company said “Following a longer than expected period of negotiations between the senior lenders and the potential acquirers of the Marampa mine, as well as a lack of liquidity due to the dramatic fall in iron ore prices, the Board has decided that it must now place London Mining PLC into administration.” The Chief Executive Graeme Hossie, said “Since first entering Sierra Leone in 2005, London Mining has established substantial operations at Marampa having brought back commercial mining and related economic activity to the region after 40 years. I salute all our employees for their dedication and contribution in creating what is now an important part of Sierra Leone’s economy and ongoing development. I also applaud them for the ongoing leadership role our team has played within the private sector in Sierra Leone in helping address the challenges of the current Ebola crisis. The Marampa mine retains excellent fundamentals and it is our sincere wish for it to find the appropriate financial support to continue operating over the longer term.” A few hours later the Company confirmed “the appointment of Russell Downs and Peter Dickens of PricewaterhouseCoopers (“PwC”) as joint administrators of London Mining PLC.” The statement explained further that “Following the appointment of PwC as administrators to the Company, Liberum Capital Limited has today (Thursday 16th Oct) resigned as Nominated Adviser and Broker to the Company with immediate effect. More worrying news was that “If the Company fails to appoint a replacement nominated adviser within one month from today, the admission of its AIM securities will be cancelled. Application will be made to the Channel Islands Securities Exchange Authority for a cancellation of listing of the convertible bonds issued by London Mining (Jersey) plc. The joint administrator and partner at PwC Russell Downs remarked “The collapse in iron ore prices and the resulting impacts on this business have been very dramatic and our focus is to ensure that a buyer is found for the Marampa Mine operations given it is such an important part of the Sierra Leone economy. We are liaising with key stakeholders and asking for a short window of forbearance as we look to conclude a transaction.” London Mining has a total debt pile of $310m (£190.6m) with a consortium of banks. Conversations had been ongoing with trade finance bank Afreximbank, which agreed a $30m two-year financing facility, but the structure of the financing could not be arranged in time. Shares were suspended at 0.75p valuing the company at just £1m. Friday October 17, 2014

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