LONDON MINING COMPLETES USD110M ROYALTY TRANSACTION WITH BLACKROCK WORLD MINING TRUST PLC

• USD110m to be received in return for a 2% revenue related royalty calculated on iron ore sales from the Marampa mine.
• Receipt of proceeds expected by 3 August 2012.   
  
  
  Graeme Hossie, Chief Executive Officer of London Mining said "This innovative deal is a key part of our long term funding strategy for Marampa’s growth. It recognises the value of Marampa's expansion to 9Mtpa and beyond and strengthens London Mining's financial capability to achieve this.  BlackRock is one of the mining industry's most respected investors and this deal represents a clear endorsement of London Mining's execution capabilities, the quality of the Marampa asset and long term confidence in Sierra Leone.  Although the company is already funded to achieve 5Mtpa of capacity next year, the proceeds from this deal provide a further financial buffer and provide funds to advance the expansion at Marampa to 9Mtpa at the appropriate time."
  
  
  Anthony Lea, Chairman of the BlackRock World Mining Trust said “For some time we have been reviewing a range of ways to invest in mining royalties. This deal meets our investment objective of trying to raise income for the portfolio whilst at the same time also being exposed to growth in production and to changes in commodity prices. We are delighted to be partnering with London Mining in this regard.”
  
  
  Evy Hambro, Fund Manager of the BlackRock World Mining Trust said “We are a long term investor in Sierra Leone and London Mining. This deal demonstrates our confidence in the London Mining management team to deliver 9Mtpa and further expansions over time at its Marampa mine. We remain positive on the long term outlook for iron ore and believe that existing producers are in the strongest position to deliver further supply.”
  
  
  London Mining Plc (“London Mining” or, the “Company”) today announced that it has entered into an agreement with Blackrock World Mining Trust plc (“Blackrock World Mining”) whereby Blackrock World Mining will pay an upfront sum of USD110 million for a 2% revenue related royalty calculated on any iron ore sales from the Company’s Marampa licence ML02/09 in Sierra Leone (“Marampa”) over the life of mine (the “Royalty Transaction” or, the “Royalty”).   The Royalty is payable quarterly in arrears calculated on the amount receivable at the relevant point of sale, currently calculated with reference to the net freight on board (“FOB”) price received from sales of iron ore in Sierra Leone.
  
  
  While the company is currently implementing its previously funded expansion to 5Mtpa capacity in H2 2013 next year, the proceeds from the deal will strengthen the Company's balance sheet and provide further financial resources to facilitate the expansion at Marampa to 9Mtpa at the appropriate time. The bankable feasibility study for the 9Mtpa expansion is due for completion in Q3 2012 and Standard Chartered has been engaged as lead advisor on the debt financing component of the expanded operation.
  The Board of the Company, having received financial advice from Goldman Sachs International in relation to the Royalty Transaction, considers that the terms of the Royalty Transaction are in the best interests of shareholders as a whole. In providing its advice, Goldman Sachs International has relied upon the Board's commercial assessment of the Royalty Transaction.
  
  
  Graeme Hossie, Chief Executive Officer of London Mining, will host a conference call for analysts and investors at 8.30 am BST (UK) this morning.  Details are set out below:
  
  

  UK Local Call	0844 871 9441
  UK Standard International	+44 (0) 1452 565 221
  USA Free Call	1866 926 0954
  Conference Code	15308785

  
  
  Replay will be available until 12/08/2012:

  UK Local Call	0800 953 1533
  UK Standard International	+44 (0) 1452 55 00 00
  USA Free Call	1866 247 4222
  Conference Code	15308785#

  
  
  For more information please visit www.londonmining.co.uk or contact:

  London Mining Plc Graeme Hossie, Chief Executive Officer Rachel Rhodes, Chief Financial Officer Ben Lee, Head of Corporate Development Thomas Credland, Head of Investor Relations	+44 (0)20 7408 7500
  Liberum Capital (Nominated Advisor/Broker) Clayton Bush/Christopher Kololian	+44 (0)20 3100 2000
  J.P. Morgan Cazenove (Broker) Neil Passmore / Ignacio Borrell	+44 (0)20 7742 4000
  Brunswick Group Carole Cable / Rosheeka Field	+44 (0)20 7404 5959

  
  
  
  
   
  Notes on the Royalty
  Full receipt of funds is expected three days after completion (3 August 2012) and the first royalty payment will be calculated on sales from the quarter ending 30 September 2012. Royalty payments are to be made in arrears, no longer than 55 days after the end of the quarter. The Royalty is based on iron ore sales from the Marampa licence ML02/09 and would apply in the event of any change of ownership.
  About London Mining
  London Mining is an expanding producer of high specification iron ore for the global steel industry and is focused on identifying, developing and operating sustainable mines. London Mining commenced sales from the Marampa Mine in Sierra Leone in 2012 and expects to reach production capacity of 5Mtpa in 2013. A prefeasibility study was completed in 2011 which shows that Marampa has resources to support a staged expansion to 17Mtpa. London Mining has also completed bankable feasibility studies outlining plans for a further 20Mtpa of iron ore production by developing two other mines in Greenland and Saudi Arabia. London Mining is also producing from a coke operation with coking coal resource potential in Colombia. It trades under the symbols LOND.L (Reuters) and LOND LN (Bloomberg)