London Mining narrows 2012 losses as production ramps up

London Mining trimmed its 2012 losses on the back of strong production at its new iron ore facility at Marampa in Sierra Leone.

The mining company reduced underlying losses in earnings before interest, tax, depreciation and amortisation (EBITDA) by $22.2m to $14.2m.

Overall net losses came to $107.8m as the company wrote-off its coal assets in Colombia at a cost of $66.2m.

Sales came to 1.3m wet metric tonnes (Mwmt) of iron ore and revenues rose to $120m.

Operations at Marampa drove results as it delivered profit of $20.4m and it reached a production target of 1.5m dry metric tonnes (Mdmt).

"We are delighted with the strong operational and financial performance of Marampa which has generated positive earnings for the year," said Chief Executive Officer, Graeme Hossie.

"High grade iron ore was produced and shipped throughout the year, production targets were met and our expansion plan remains on track as we ramp up to 5Mtpa [million tonnes per annum] in 2013."

The company plans on expanding further at Marampa following bank feasibility studies and is in talks with partners for funding to get its Isua Greenland project up and running.

To help fund the projects, London Mining has increased its debt facility by $90m to $165m through a new deal with Standard Chartered, Rand Merchant Bank and Ecobank.

"While the outlook for iron ore pricing continues to be volatile, we are focussed on cash generation," Hossie added.

"Our priority is to complete a robust 5Mtpa operation, while focussing on reducing costs and delivering operational improvements across the business."

Shares fell 0.37% to 134p at 10:16 Thursday.

RD