Freetown — London Mining's extended drilling programme at its flagship Marampa project in northern Sierra Leone has uncovered two structures with an estimated inferred resource of 111 million tonnes grading 33% iron.

Consequently, the company is now targeting a steady-state 9 million tonnes per annum mining operation, with more than a 20 year mine life. The newly discovered Campbell Town ridge and Hospital ridge structures are connected to Marampa's Masaboin Hill and Ghafal Hill zones. London Mining chief executive, Graeme Hossie, said he was excited by the new discovery, noting that a "higher grade fraction ... has the potential to significantly enhance the economics of the project".

This 'higher grade' area consists of around 22 million tonnes of weathered ore - of which a fraction could be processed without milling - which could be blended with tailings to increase head grade to 26% Fe. London Mining believes this could extend Phase 1 from 5 years to over 7 years, with a 3 million metric tonnes per annum peak run rate.

At Marampa, London Mining has almost completed its original drilling schedule - with nearly 27,000 of the planned 28,000 metres complete - however in light of this latest discovery the company says it has expanded the programme up to 40,000 metres.

With the additional drilling London Mining intends to expand and upgrade Marampa's resource further.

London Mining revealed the Campbell Town and Hospital discoveries as part of its second quarter operational update. The company also highlighted that the construction of Marampa's Phase 1 tailings operation was well underway, and the "majority of civil earthworks" were completed as scheduled, ahead of the rainy season.

Furthermore, the company said its resource definition work has advanced on the primary resource, and the pre-feasibility study for the Phase 2 expansion is on-course for completion in the fourth quarter of 2010.

The company also reiterated the key points relating to its stalled Chinese venture, and the arbitration process between London Mining, its joint venture partner Wits Basin Precious Minerals, and the 'sellers' of the Nanjing Sudan Mining Company (Nanjing Sudan).

The company reminded investors that the claimant has "no legal or commercial recourse" to London Mining; the joint venture intends to defend the claim "to the fullest extent"; and it is "pursuing various claims and counterclaims".

As a result of the suspended operation, and the prospect of "prolonged arbitration" London Mining told investors that it has made impairments to "receivables recoverable" from the joint venture and Wits Basin of US$14.2m.

Through the quarterly update, London Mining emphasised that it remains fully-funded to deliver its key project milestones, with US$158.8 million in cash and a further US$60 million in revolving credit. In reference to its other projects, London Mining reflected on its progress at the Wadi Sawawin joint venture project in Saudi Arabia, and the Insua project Greenland.

On the 22nd July, the company recently updated the bankable feasibility study (BFS) for the Wadi Sawawin project. According to London Mining the BFS resulted in a 'material improvement' in the project economics.

A few days earlier the company also boosted the project with a new agreement, which restructured the project's ownership. As a result London Mining now has a direct free-carried interest of 25%. In Greenland, London Mining completed a pre-feasibility study for Insua in June.

The study confirmed plans for a 21-year mining operation to produce 10 metric tonnes par annum of premium pellet feed. Now a full feasibility study is expected to be complete by the end of 2011.

At its wholly-owned Colombian project, London Mining is planning to reach its first coking coal production in the second quarter of 2011. Once operational, the company expects production to ramp-up to 200,000 tonnes per annum by the fourth quarter of 2011.

This month a prospective 1,506m drilling programme got underway to evaluate new potential coking coal concessions and resources.