Concord Times (Freetown)
Atieu Jalloh
8 February 2010
Freetown — Aim-listed London Mining plans to start work on potentially expanding the output at its Marampa iron-ore project, in Sierra Leone, to between five and eight million tons a year.
The company told shareholders in a statement on Friday that an initial resource statement for the tailings portion of the project had been completed, proving sufficient resources for the planned 1,5-million ton a year starter operation in 2011.
"The partial tailings resource announced today allows Marampa to commence production quickly and start generating cash flow, from which we can expand iron-ore concentrate production from tailings to three-million tons a year, prior to commencing production from the primary ore," CEO Graeme Hossie commented.
He added that this would also allow the company to accelerate the construction of infrastructure for the enlarged operation, based on the primary ore body.
London Mining would start developing the tailings reprocessing operation in February, after the project is ratified by the Sierra Leone Parliament.
A mining agreement, environmental-impact assessment and fiscal incentives package had already received full Cabinet approval, the company stated.
Independent consultancy Snowden Mining has estimated a Joint Ore Reserves Committee-compliant tailings resource of 32,5-million tons, of which 29,6-million tons was indicated and 2,9-million tons inferred.
The resource was based on a 400-hole drilling programme, while a further 200-hole drilling programme to drill 2,300 m with an air core rig to provide an updated tailings resource statement, would be completed by the end of the first quarter of this year.
The estimated resource provided the company with at least six years of production at a rate of 1,5-million tons of concentrate a year, at a capital cost of about $80-million, London Mining noted.
There was also potential to accelerate production to three-million tons a year, through an expanded tailings operation ahead of first concentrate from the primary ore.
ASX-listed engineering and project management group Ausenco has been appointed to provide project management and technical support during the construction of the tailing reprocessing operation.
The London-listed miner noted that it was in final discussions with a provider of barging and floating crane transshipment capacity, which represented the main long-lead item that would secure capacity for five-million tons of concentrate a year with a single crane.
By adding a second crane, it could potentially expand this by a further five-million tons a year.
The establishment of a gravel haul road to transport the concentrate to a barge-loading site at Tawfayim, 40km from the project, was also on schedule.
Meanwhile, London Mining plans to determine the size of the primary resource by the end of the first quarter, after which it would start work on expanding the operation to between five-million tons a year and eight-million tons a year.
Ausenco would, however, start a preliminary technical study to define the economic potential of an expanded operation, the company reported.
Additional metallurgical work to determine the suitability of concentrate from the primary ore body for sinter or blast furnace pellet feed would also be undertaken.
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