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London Mining losses widen amid “challenging” backdrop

London Mining losses widen amid “challenging” backdrop

London Mining (LON:LOND), owner of the Marampa iron ore operation in Sierra Leone, reported a significant widening of losses in the first half against a “challenging” backdrop for the industry and the company.

At the same time the firm warned it was now suffering “supply chain disruption” as a result of the Ebola outbreak in the country as it narrowed its production guidance to the “lower end of the range”.

In early trade the shares fell 17.5% at 33p and are down over 70% in the year to date.

London Mining revealed production volumes rose by 24%, but revenues fell 22% as the company was hit by lower iron ore prices.

It meant the group posted a loss for the six months ended June of US$12.6mln, compared with a US$5mln shortfall this time last year.

Costs in the period were steady at US$57 per wet metric tonne (wmt), though in June they fell to US$50.

London Mining said it is ramping up to achieve annual output of 5.4mln tonnes a year, although its guidance for 2014 is 4.9-5.1mln tonnes.

It said there had been good interest from potential strategic partners and chief executive Graeme Hossie said the company is “discussing a substantial investment to enable us to reduce risk, fund mine extension capex and potentially expand to larger scale production”.

“We expect the process to complete before the end of 2014," he added.

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October 10 2014

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