Sierra Leone

The Marampa mine is located 125km by road north-east of Freetown and 40km by dedicated haul road from tidewater at the Thofeyim river terminal.

The Marampa deposit was first discovered in 1926 and open pit production was commenced by the Sierra Leone Development Company (“Delco”) and William Baird between 1933 and 1975. By the 1960’s iron ore production had reached 2 Mtpa before low iron ore prices forced the mines closure. Continuing weak market economics and the civil war prevented redevelopment of the mine until the mining licence was acquired by London Mining in 2006.

London Mining secured an option to acquire the mining rights at the Marampa mine in December 2005. After securing funding, London Mining was able to exercise the option in January 2006 and in September 2006 the Marampa mining lease was assigned to LMC, a 100% subsidiary of London Mining. The Marampa mine recommenced production in December 2011.

London Mining is developing Marampa in two phases. Phase 1 is in production and will be expanded to produce 5Mtpa of sinter concentrates from a blend of tailings from previous operations and soft highly weathered ore. A bankable feasibility study outlining an expansion to 9Mtpa will be completed in Q3 2012.

A PFS has been completed for a  Phase 2 expansion which will produce over 16Mtpa of concentrate from the remainder of the Marampa ore body over a 25 year mine life.

The maps below show the location of the operations in Sierra Leone

Resources

The London Mining Marampa mining licence covers an area of 13.82km2. As of December 2011 Snowden Mining Industry Consultants estimated the total JORC resource at Marampa to be 1,078Mt grading 31.2% Fe. These resources represent a tenfold increase of the historical primary resource of 84Mt grading 37% Fe reported at the time of London Mining’s admission to AIM in November 2009. The resource contains around 40Mt of tailings and over 150Mt of weathered ore which can be considered in the lower capital intensity Phase 1. The balance of resources will be considered either in an extended Phase 1 operation which requires the installation of additional crushing and grinding capacity, or in Phase 2 which will consider an expansion to over 16Mtpa.

Summary of Marampa resource as at December 2011 reported at a 15% Fe cutoff

Material	Classification	Tonnes (Mt)	Fe(%)	Al2O3(%)	SiO2(%)	CaO (%)	MnO (%)	P(%)	S(%)
Highly weathered	Indicated	54	35.6	6.6	37.3	0.12	0.25	0.04	0.01
Moderately weathered	Indicated	61	33.2	5.3	41.9	0.56	0.15	0.10	0.01
Primary	Indicated	537	32.7	4.5	38.3	3.15	0.18	0.16	0.01
High Manganese	Indicated	180	27.4	5.7	40.4	2.94	2.73	0.08	0.01
Primary Indicated Mineral Resources		832	31.8	5.0	39.0	2.72	0.73	0.13	0.01
Tailings	Indicated	38	22.5	9.0	51.4	0.10	1.05	0.05	0.01
Total Indicated Mineral Resources		870	31.4	5.1	39.5	2.60	0.75	0.13	0.01
Highly weathered	Inferred	21	33.6	7.3	39.4	0.15	0.30	0.06	0.01
Moderately weathered	Inferred	16	33.2	5.5	41.8	0.51	0.14	0.09	0.01
Primary	Inferred	150	30.4	5.3	41.2	2.72	0.25	0.18	0.02
High Manganese	Inferred	21	27.6	5.5	39.1	2.86	3.55	0.09	0.01
Total Inferred Mineral Resources		208	30.7	5.5	40.9	2.30	0.58	0.15	0.02
Total Mineral Resources		1,078	31.2	5.2	39.8	2.54	0.71	0.13	0.01

Mining Lease Agreement ("MLA")

A mining agreement comprising of the fiscal arrangements for the project was agreed with the government and ratified by the parliament of Sierra Leone in early 2010. A review of the MLA by the Sierra Leone Government (“GoSL”) is near to conclusion. Current discussions with the Government review committee (“the Committee”) indicate there should be no material change to the project value as a result of any modifications to the MLA and associated fiscal incentive package and hence the investment programme remains unchanged.

London Mining has also engaged in discussions with the Committee to accelerate the review that was to take place after five years and to agree now what the fiscal regime will be for the five years from 2015. This will provide certainty on the financial modelling, in particular for the expansion of Phase 1 to incorporate the full effect of the weathered ore and the Phase 2 development. It is expected that the resulting package for the second five years should not differ materially from fiscal incentives either awarded recently to other mining companies or from those that have previously been negotiated with companies already having been through this review process. The Company supports efforts to increase transparency in the mining industry in Sierra Leone, and GoSL remains very supportive of London Mining’s production and investment plans.

Offtake and marketing

An offtake agreement for Marampa was signed with the trading house Glencore International AG (“Glencore”) on 26 January 2011. The offtake covered 9.5 million wet metric tonnes (WMT) production. The five year agreement, which included a pre-payment facility for up to USD 27 million, will provide guaranteed offtake and shipping from Sierra Leone for the first 1.8Mtpa of production, with the option for London Mining to expand the agreement on the same terms. The offtake will be based on Platts 62% CFR China benchmark, with an upward adjustment for the Fe content of the Company's 65% Fe product at locations such as Europe where there is a net pricing benefit through lower shipping costs. The Agreement accommodates London Mining's ramp up expectations and is flexible.

Environmental permitting and management

London Mining received its full environmental permit for the Marampa Phase 1 operations at the beginning of January 2011. The issuance of the permit followed the formal approval and acceptance by the Sierra Leone Environmental Protection Agency (“SLEPA”) of London Mining's Environmental Impact Assessment (“EIA”), the EIA having been discussed publically via four public hearings in Sierra Leone, which were attended by members of the public and NGOs. The permit is subject to an annual renewal by SLEPA, which requires ongoing environmental compliance in accordance with the Sierra Leone Environmental Act 2008 and the payment of an annual fee. The EIA meets all local regulations and London Mining is working with an internationally recognised environmental consultant to ensure compliance with international best practice.