China Global Mining Resources JV receives claim
(Thomson Reuters ONE) -
London Mining ("London Mining" or the "Company") announces that China Global
Mining Resources Limited ("CGMR"), a subsidiary of the China Global Mining
Resources (BVI) Limited joint venture ("JV") which is held 50:50 with Wits Basin
Precious Minerals Inc ("Wits Basin"), has received a claim regarding the payment
of the deferred consideration for the purchase of the Sudan processing plant.
The claim is to be determined through arbitration. CGMR is in discussions with
the sellers of the plant regarding this claim and a resolution (either by
agreement of through arbitration) is expected in the next 6 months. The Sellers
have no legal or commercial recourse to London Mining or any subsidiary other
than the CGMR JV with respect to this claim.
The claim relates to the timing for payment of deferred consideration of RMB
120 million (US$17.48 million) payable to Mr Lu Benzhao and Ms Lu Tinglan (the
"Sellers") under the terms of CGMR's acquisition of the Nanjing Sudan Mining
Company Ltd ("Sudan") which completed in April 2009 whose sole asset was the
Sudan processing plant. The Sellers are seeking immediate payment of the
deferred acquisition consideration. CGMR believes the payment is only payable
to the extent of available cash within the CGMR JV as stipulated by the equity
transfer agreement of Sudan and therefore not payable at this time. It is
subject to the decision of the arbitrator whether such stipulation may be upheld
in the process of the arbitration. The Sellers, in addition, are seeking
liquidated damages for late payment of the deferred consideration of US$33
million plus costs.
CGMR intends to defend this claim to the fullest extent and is also pursuing
various claims and counterclaims that it believes it has against the Sellers for
their non-compliance with the acquisition terms, including a claim for US$15
million for breach of contract.
Update on Operations and Funding
As announced on 20 May 2010, in London Mining's Operations and Financial Review
for the three months to 31 March 2010, CGMR operations were halted in May 2010
to allow for the tailings dam to be raised as a precautionary measure following
heavy rains. The tailings dam work was completed in [June] 2010 and during the
period of non-operation, maintenance was undertaken at the Sudan processing
plant. Subsequent to the raising of the tailings dam, mining operations have
not resumed due to the enforcement of a requirement from the regulatory
authorities in Anhui Province for the mining operations to be consolidated on
the CGMR license, held by the Chinese subsidiary Maanshan Xiaonanshan Mining
Company Limited ("XNS"). As reported in the Admission Document, the granting of
the larger mining lease for the area, incorporating the neighbouring mines in
addition to the original license, required consolidation either through
acquisition or amalgamation. CGMR has been investigating interim alternatives
to consolidation but no agreement has yet been reached either with the
neighbouring mines or with the authorities. CGMR, led by Witts Basin, continues
to undertake a fund raising process to allow for the consolidation of the
license, acquisition of deep mining rights and for payment of the deferred
consideration to Mr and Ms Lu. London Mining is not the operator of the CGMR JV
and has no intention of committing further material funds to the CGMR joint
venture.
Notes to Editors:
The CGMR Joint Venture
London Mining acquired a 50% interest in China Global Mining Resources (BVI)
Limited ("CGMR BVI") in April 2009. The remaining 50% interest is held by Wits
Basin Precious Minerals Inc. Also in April 2009, CGMR BVI, through its Hong
Kong Subsidiary, CGMR, in turn completed its acquisition of the producing
Xiaonanshan iron ore open pit mine and the Sudan concentrate processing plant
through the acquisition of the two PRC companies Maanshan Xiaonanshan Mining Co.
Ltd and Nanjing Sudan Mining Co. Ltd. XNS holds a licence incorporating two
further adjacent operating mines (Sanbanqaio and Guqaio) and is undertaking a
programme of resource definition and mine planning to consolidate the three
mines into a single operation. CGMR signed a non-binding memorandum of
understanding to acquire the neighbouring Sanbanqaio and Guqaio mines in August
2009, and has been conducting due diligence regarding such acquisition.
Completion of any such acquisition requires CGMR to raise external finance.
For more information, please contact:
London Mining Plc
Thomas Credland, Head of Investor Relations +44 20 7201 5000
Liberum Capital (Nominated Advisor/Broker)
Clayton Bush/Ellen Francis +44 20 3100 2000
Brunswick Group
Carole Cable/ Daniel Thöle +44 20 7404 5959
Crux Kommunikasjon AS
Charlotte Knudsen+47 97 56 19 59
The Company's website can be found at www.londonmining.co.uk.
About London Mining
London Mining is focused on identifying, developing and operating scaleable
mines to become a mid-tier supplier to the global steel industry. London Mining
is developing four iron ore mines in Sierra Leone, Saudi Arabia, Greenland and
China as well as a coking coal operation in Colombia. All London Mining's assets
have deliverable production with potential for expansion. The Company listed on
the Oslo Axess on 9 October 2007 and on AIM in London on 6 November 2009. It
trades under the symbols LOND.L and LOND.NO (Reuters) and LOND LN and LOND NO
(Bloomberg).
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Source: London Mining Plc via Thomson Reuters ONE
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Datum: 19.08.2010 - 09:04 Uhr
Sprache: Deutsch
News-ID 39818
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