London Mining plc in administration- UPDATE (“London Mining” or “the Company”)

Published at 07:10 AM on 03 November 2014

After a very challenging period for London Mining, the joint administrators are pleased to announce that the sale of the Company's Marampa Mine in Sierra Leone has been successfully concluded.

This follows last week's announcement of terms being agreed with Timis Corporation to purchase the Company’s mining assets.

The administration team’s key objective centred on finding a rapid resolution for  the Company’s  long term future despite the uncertainties created by the lack of liquidity and slump in iron ore prices. 

Against this backdrop, and alongside a limited amount of credible interest, the joint administrators identified Timis Corporation as the best bid, placing emphasis on Timis Corporation’s track record in western Africa and a personal commitment to be part of the solution by securing the support of several Sierra Leone ministries who helped ensure the deal completed quickly. That support has been expressly guaranteed by the President of Sierra Leone, the Minister of Mines and Mineral Resources, the Minister of Finance and EconomicDevelopment, and the National Revenue Authority. 

However, there was no alternative but to deliver the sale through a ‘prepack’ structure which will see some creditors take losses on their indebtedness.

All staff at the mine will see their employment continue with Timis Corporation.  Had this transaction not taken place, the mine was hours away from closing, which would have resulted in far more significant losses being suffered by stakeholders, and especially the local community.

Peter Dickens, joint administrator of London Mining plc and director at PwC, said:

“This is a great outcome, not only for the Marampa Mine workforce transferred to Timis as part of the deal, but also in terms of protecting a key asset in Sierra Leone’s economy, contributing around 10% of the country’s GDP.

“I am delighted that PwC has been able to bring together management, lenders, advisers, the Sierra Leone government and Timis Corporation, all of whom were committed to completing this critical transaction for the Marampa Mine and its workers, which sees the mine’s long-term future assured.

"Saving the mine at this difficult time for Sierra Leone was a major priority. The Company’s important efforts relating to Ebola treatment will also continue to be maintained.”


Frank Timis, Chairman of the Timis Corporation commented:

“Timis Corp is delighted that we have completed the purchase of the Marampa Mine from the receivers, which secures the future of the mine and its employees, and preserves a major source of revenue for the government of Sierra Leone. Timis Corp has provided working capital financing for $70m to Timis Mining Corp (SL) Ltd which will allow the mine to quickly ramp up to profitability.

“It is especially pleasing to have received a confirmation of the government’s support for the purchase and transfer of the mine and assets from the His Excellency the President the Honourable Dr Ernest Bai Koroma, the Minister of Mines and Mineral Resources the Honourable Minkailu Mansaray, the Minister of Finance and Economic  Development Dr Kaifala Marah, and the Commissioner  General of the National Revenue Authority Madam Haja Kallah-Kamara. We are also pleased to confirm that the Board of African Minerals has approved access to the rail and port infrastructure for the export of 6 million tonnes per annum of Marampa’s iron ore product, subject to final completion of commercial terms and any regulatory approvals.”

“I am also pleased to have secured exclusive access to a further 100 million tonnes of weathered hematite iron ore through agreement with Cape Lambert Resources, allowing the current plants to process consistent quality material for the next decade, and deferring the capital expenditure that would have been required to access fresh ore at Marampa.”



ENDS

 

For more information, please contact:

Ian Hannam/Neil Passmore/Andrew Chubb

Hannam & Partners LLP                                                         +44 (0) 207 907 8500

Jos Simson/Mike Bartlett/Nuala Gallagher

Tavistock                                                                                           +44 (0) 207 920 3150

Notes to editors:

 

1.     On 16October 2014, Russell Downs and Peter Dickens were appointed as joint administrators of London Mining PLC (UK) to manage their affairs, business and property as their agents and without personal liability.  Russell Downs and Peter Dickens are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales.

2.    The joint administrators are Data Controllers of personal data as defined by the Data Protection Act 1998. PricewaterhouseCoopers LLP will act as Data Processor on their instructions. Personal data will be kept secure and processed only for matters relating to the Administration.

 

About PwC

 

PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 195,000 people who are committed to delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by visiting us atwww.pwc.com

 

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2014 PricewaterhouseCoopers. All rights reserved.

 

About Timis Corporation Limited

 

Timis Corporation is a private company founded and Chaired by Frank Timis. Timis Corporation has an extensive portfolio of businesses in the mining, oil & gas, life sciences and agricultural industries.  Core holdings include African Minerals, African Petroleum, International Petroleum, Pan African Minerals and London Pharma amongst others.

 

 


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About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2016 PwC. All rights reserved

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