MARAMPA PHASE 2 PREFEASIBILITY STUDY RESULTS
(Thomson Reuters ONE) -
Highlights
* Three stage expansion plan to 16Mtpa with average capital intensity of
USD148/t of capacity
* Utilisation of weathered ore produces first 8Mtpa expansion for USD82/t of
capacity
* Operating costs of below USD30/t FOB over life of mine
* Schedule assumes construction of 2a to start in 2012 with first production
in Q3 2014
* Increased number of financing options provided by low initial expansion
capital requirement.
* New mine plan extends Marampa production to 2036
* Phase 2 expansion produces robust post-tax NPV10 of USD 2.2 billion with an
IRR of 28.8%
London Mining CEO Graeme Hossie says: "We are very excited about this
breakthrough result which allows London Mining to build quickly from our fully
funded Phase 1 operation which will commence this year. The incremental nature
of the expansion plans which are scheduled to begin once we are generating
substantial cash flow, provide London Mining with a route to grow production
from the 1 billion tonne resource at Marampa and capitalises on the advantages
provided by the presence of soft, higher grade weathered material and existing
infrastructure."
London Mining today announces the results of the prefeasibility study ("PFS")
for the staged expansion of its Marampa project in Sierra Leone. The study has
been completed by Ausenco with assistance from Snowden, PSI, Vector and the
London Mining technical team.
The Company is currently developing Phase 1a and Phase 1b of the Marampa
project, involving the reprocessing of tailings from the previous operation to
produce 3.6 Mtpa of iron ore. Phase 2 of the project is a three stage process
outlined below.
Phase 2a : low capex expansion
Initial expansion of 8Mtpa for an estimated capital cost of USD659m. The
utilisation of softer weathered material and use of expanded existing haul road
and barging capacity produces a low capital intensity of USD82/t of capacity.
Construction is anticipated to commence in 1H 2012 with first production in Q3
2014. The low capital cost of Phase 2a provides London Mining with a number of
options to finance the expansion.
Phase 2b : hard rock expansion
A further expansion of up to 8Mtpa of pellet feed, to a total of 16Mtpa, based
on the mining and processing of the unweathered portion of the Marampa ore body
for an estimated capital cost of USD1,187m. The higher capital intensity of
USD148/t of capacity reflects the processing of harder ore as well as the
construction of a pipeline, a coal fired power station and a new port.
Phase 2c : reconfiguration of Phase 2a to allow processing of hard rock
Addition of regrinding and flotation capacity to the sinter concentrate circuit
to allow for processing of unweathered ore once soft weathered ore has been
depleted. The estimated capital cost of 2c is USD523m, equivalent to USD65/t of
capacity. Phase 2c will utilise Phase 2b logistics but require an expansion of
the new port and power facilities.
The new production plan extends the life of Marampa until 2036. The production
plan generates a post-tax NPV10 for the Marampa expansion of USD 2.2 billion
with an IRR of 28.8%. This is based the assumption that 100% of product will be
sold to China with price forecasts provided by AME Mineral Economics. Tax
assumptions, including development incentives for the 10 year period effective
January 2011 are based on recent discussions with the Government of Sierra
Leone, which will be effective once ratified by Parliament.
Capital costs are reported below and have an accuracy range of - 25%/+30%
+------------------------------------+----------+----------+----------+
| USDm unless specified | Phase 2a | Phase 2b | Phase 2c |
+------------------------------------+----------+----------+----------+
| Mining | 101.4 | 71.3 | 0.0 |
+------------------------------------+----------+----------+----------+
| Process Plant | 229.7 | 374.1 | 115.7 |
+------------------------------------+----------+----------+----------+
| Site Infrastructure | 57.6 | 25.9 | 2.7 |
+------------------------------------+----------+----------+----------+
| Port Facilities | 10.4 | 129.9 | 100.8 |
+------------------------------------+----------+----------+----------+
| Power Infrastructure | 46.8 | 149.3 | 94.4 |
+------------------------------------+----------+----------+----------+
| Thofeyim Port | 23.3 | 0.0 | 0.0 |
+------------------------------------+----------+----------+----------+
| First Fills, Spares, Mobile Equip. | 17.8 | 48.9 | 8.6 |
+------------------------------------+----------+----------+----------+
| Indirects | 78.0 | 223.7 | 128.1 |
+------------------------------------+----------+----------+----------+
| Owner's costs and Contingencies | 93.9 | 163.7 | 73.1 |
+------------------------------------+----------+----------+----------+
| Total | 658.8 | 1186.7 | 523.4 |
+------------------------------------+----------+----------+----------+
| Capital Intensity (USD/t capacity) | 82 | 148 | 65 |
+------------------------------------+----------+----------+----------+
Operating costs have been produced with an accuracy of +/- 30% and are as
follows:
Mining
+-----------------------------+--------+-----------------+----------------+----+
|Expected Opex |Phase 2a|Phases 2a and 2b|Phases 2b and 2c|LOM |
+-----------------------------+--------+-----------------+----------------+----+
|Mining |7.3 |6.3 |8.1 |7.6 |
+-----------------------------+--------+-----------------+----------------+----+
|Processing (including |8.9 |9.9 |12.0 |11.5|
|pipeline) | | | | |
+-----------------------------+--------+-----------------+----------------+----+
|Truck haulage |3.3 |1.7 |- |0.5 |
+-----------------------------+--------+-----------------+----------------+----+
|Port |0.2 |1.4 |1.7 |1.6 |
+-----------------------------+--------+-----------------+----------------+----+
|Barges and transhipment |5.4 |5.9 |5.4 |5.5 |
+-----------------------------+--------+-----------------+----------------+----+
|G&A |2.9 |1.9 |1.9 |1.9 |
+-----------------------------+--------+-----------------+----------------+----+
|Total (USD/t) |28.0 |27.1 |29.1 |28.6|
+-----------------------------+--------+-----------------+----------------+----+
Mining will take place using a conventional open pit, mined by an owner operator
fleet with mine scheduling planned to smooth annual variations of ROM ore
content and stripping ratio. The pit is to be divided into six sectors or
individual pits designated Masaboin North, Masaboin Central, Masaboin South,
Campbelltown Ridge, Hospital Ridge and Ghafal. Waste rock will be hauled and
dumped into different waste dumps near the pit perimeters within the existing
mining licence. The Phase 2 production profile has been optimised to mine
weathered ore first and create backfilling opportunities to accommodate waste
and tailings. The strip ratio for Phase 2a will be 0.7 but this will increase to
1.4 in Phases 2b and 2c.
+------------------+---------+------------------+------------------+----+------+
|Phase | | Phase 1 | 2a | 2b | 2c |
+------------------+---------+------------------+------------------+----+------+
|First development | | 2010 | 2012 |2013| 2017 |
+------------------+---------+------------------+------------------+----+------+
|First production | | 2011 | 2014 |2015| 2021 |
+------------------+---------+------------------+------------------+----+------+
|Last production | | 2018 | 2020 | 2036 |
+------------------+---------+------------------+------------------+-----------+
|Ore type | | Tailings | Weathered |Unweathered|
| | | Weathered | | |
+------------------+---------+------------------+------------------+-----------+
|Total ore | Mt | 59.0 | 102.6 | 665.1 |
+------------------+---------+------------------+------------------+-----------+
|Total waste | Mt | 15.3 | 69.2 | 930.6 |
+------------------+---------+------------------+------------------+-----------+
|LOM strip ratio |Waste/ore| 0.26 | 0.7 | 1.4 |
+------------------+---------+------------------+------------------+-----------+
|Mine life | Years | 7 | 7 | 21 |
+------------------+---------+------------------+------------------+-----------+
|Fe | % | 26.5 | 33.5 | 30.6 |
+------------------+---------+------------------+------------------+-----------+
|Mass recovery | % | 36 | 45.6 | 41.4 |
+------------------+---------+------------------+------------------+-----------+
|Concentrate | Mt | 21.1 | 46.8 | 275.5 |
+------------------+---------+------------------+------------------+----+------+
|Target production| Mtpa | 3.6 | 8 | 8 | 8 |
|rate | | | | | |
+------------------+---------+------------------+------------------+----+------+
|Product type | |Sinter concentrate|Sinter concentrate|Pellet feed|
+------------------+---------+------------------+------------------+-----------+
Processing
The processing for the ore will use a combination of two stage grinding (SAG and
ball), two stage (rougher and cleaner) wet high intensity magnetic separation
("WHIMS") and flotation.
Recent testwork completed by Ammtec and Outotec has shown that it is possible to
produce a sinter concentrate from weathered ore using a simplified processing
circuit. This will eliminate initial installation of several significant capital
items that will be installed as part of Phase 2b to process unweathered ores.
The required equipment will be retrofitted to the Phase 2a circuit as part of
Phase 2c when the weathered ore is exhausted.
Pellet feed specifications from unweathered Marampa ore are unchanged, but the
Phase 2a circuit is expected to produce a sinter concentrate with a similar
specification to the Phase 1 concentrate.
Power
The power requirement for Phase 2a is 32MW, with power of 40MW to be provided by
heavy fuel generators to be installed at the new port location. Power will be
transmitted to Marampa via an overland transmission line following the pipeline
route.
The power requirement for Phases 2b and 2c is 159MW. The heavy fuel oil station
will be phased out and replaced with a lower cost coal fired power station with
two 100MW turbines. Coal will be transported to the new port from ocean going
transports by barge and to a dedicated coal unloading wharf and coal stockpile.
The coal fired power station is the critical lead time item for Phase 2b.
Transport
Transport of the Phase 2a sinter concentrate will employ an expanded version of
the logistics route planned for Phase 1, with an upgraded paved haul road to
accommodate 200t road trains. Barge loading capacity will be increased by the
use of a capesize floating storage vessel which will be moored at the
transhipment location. Simulations have been run by Sandwell and show the
viability of an expanded barging facility at Thofeyim.
A 42km overland pipeline will be constructed from the Marampa mine to the new
port as part of Phase 2b and will be sized to accommodate the pellet feed
production from Phases 2b and 2c.
Tailings
A number of options are being considered for the tailings storage facility.
Backfilling into mined out areas is applied where possible with the remainder
currently assumed to be disposed of outside the licence. A paste-fill storage
facility within the confines of the existing licence will be considered as a
trade-off study in the BFS.
Next steps
Ausenco and London Mining will proceed with work to gain a detailed
understanding of the primary ore's mineralogy and variability, and an enhanced
understanding of the overall logistics. These and other key workstreams,
including baseline studies for the environmental impact assessment on areas that
are not currently permitted as part of Phase 1, will be carried out prior to the
commencement of the Bankable Feasibility Study (BFS) recommended by Ausenco, to
allow completion of a BFS and project funding in 1H 2012.
Phase 1 progress
Development of Phase 1 continues on time and on budget. A detailed update will
be provided in May 2011.
You are invited to join a webcast and conference call hosted by Graeme Hossie,
Chief Executive Officer, and Luciano Ramos, Chief Operating Officer, at 9:00am
GMT (UK) / 10:00am CET (Norway). The details are included below:
Webcast
A link to the webcast can be found on London Mining's homepage,
www.londonmining.co.uk or on the Oslo Stock Exchange's website, www.oslobors.no
(Products and services/ webcast).
The webcast will include audio from the conference call and synchronised power
point slides. You will not be able to post questions through the webcast.
Conference Call
Please use the following numbers and Conference ID to dial in to the conference
call:
Country Number
UK Toll free 0800 028 1243
Norway Toll free 800 19640
US Toll free 1888 935 4575
International dial-in +44 (0)20 7806 1951
Participants will be asked for their full name & Conference ID. The Conference
ID is 7468558
There will be a replay facility on the Company's homepage,
www.londonmining.co.uk.
Please find the Marampa expansion prefeasibility study results presentation
enclosed.
For more information, please contact:
London Mining Plc +44 207 201 5000
Graeme Hossie, Chief Executive Officer
Rachel Rhodes, Chief Financial Officer
Thomas Credland, Head of Investor Relations
Liberum Capital (Nominated Advisor/Broker) +44 203 100 2000
Clayton Bush/Christopher Kololian
J.P. Morgan Cazenove (Broker) +44 207 742 4000
Adam Brett / Neil Passmore
Brunswick Group LLP +44 207 404 5959
Carole Cable / Daniel Thöle
Crux Kommunikasjon AS +47 97 56 19 59
Charlotte Knudsen
About London Mining
London Mining is focused on identifying, developing and operating scalable mines
to become a mid-tier supplier to the global steel industry. London Mining is
developing three iron ore mines in Sierra Leone, Saudi Arabia and Greenland as
well as a coking coal operation in the Socha region of 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).
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Marampa expansion prefeasibility study results presentation:
http://hugin.info/137683/R/1504987/439905.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: London Mining Plc via Thomson Reuters ONE
[HUG#1504987]
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Datum: 11.04.2011 - 08:00 Uhr
Sprache: Deutsch
News-ID 53351
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