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London Mining acquires interest in Colombian coal production and development


London Mining announces today the purchase of 20% of International Coal Company Ltd. (ICC) for an aggregate consideration of $5m, with first rights of refusal to invest further capital. ICC is a Cayman Islands incorporated company with operations in Colombia, South America. ICC’s strategy is to become a fully integrated developer of coal properties for the international steel and energy markets. The company’s focus has been on acquiring concession interests in metallurgical coal districts in Colombia with good logistics and access to transportation infrastructure for the seaborne market. ICC has assembled an attractive portfolio of metallurgical coal exploration and development properties as well as a coke oven battery project which is currently under development. ICC has secured and will continue to expand the supply of metallurgical coal for its coke oven battery from local small miners while it develops its metallurgical coal properties nearby. Mr. Giovanni Pizarro, a seasoned Colombian coal mining executive formerly with Compania de Cementos Argos S.A., is ICC’s Operations Manager and is responsible for executing ICC’s Colombian strategy.

In order to further expand its coal assets and execute on its strategy of integration, ICC has entered into a binding Letter of Intent (LOI) to acquire an initial 75% interest in a leading mining services operator in Colombia. Completion of this acquisition is conditional, among other things, upon final due diligence, documentation and finance. Through this acquisition, ICC will considerably expand its skill set to accelerate the development of its current portfolio of properties while adding key operational components of its strategy. In particular, upon completing the acquisition, ICC will add two properties with metallurgical and high quality steam coal with identified inferred resources of approximately 118 million tons and a geological potential of in excess of 400 million tons; ocean and river port concessions which are fully permitted and available for immediate development; and substantial existing and ongoing cash flow. Further additions of producing properties are anticipated.

In addition to an initial equity investment of US$5m, London Mining shall have board involvement and first rights to provide funding to the business and thereby increase its interest.

Graeme Hossie, a director of London Mining, has an existing beneficial interest in ICC shares which prior to London Mining’s investment was in respect of 15% of ICC’s issued share capital. Full disclosure of this interest has been made to the London Mining board and Mr Hossie has not participated in the final approval of the transaction, which was carried out by the other London Mining directors. As a consequence of this interest Mr Hossie will not represent London Mining on the ICC board and will not participate in any decisions of the London Mining board in relation to ICC.

Colombia is gaining increased prominence in the international resource markets due to the high quality of coal available, its geographical location (including seaborne access) and proximity to major coal markets, its Government’s commitment to work with the industry to improve infrastructure and the country’s improved security situation.

London Mining’s Managing Director, Christopher Brown, said “ICC has assembled excellent coal assets with significant development potential and an experienced operating team. The combination of near term cash flow from coking coal production and completion of an acquisition of an operating mining company with logistics and additional coal resources provide an excellent addition to London Mining’s developing coal division”.

London Mining
London Mining is incorporated and registered in the UK, and is developing mines to supply the global steel industry. In 2007, London Mining raised over US$185m to advance iron ore production from its projects, and listed on the Oslo Axess, a marketplace regulated by the Oslo Stock Exchange on 9 October 2007. Following the sale of its Brazilian operations in August 2008 for over US$800m, the Company has mining, exploration and development projects located in Sierra Leone, Saudi Arabia, Greenland, Mexico and South Africa, and total iron ore resources of 1.3 billion tonnes containing an estimated 459Mt of iron. London Mining is trading under the Reuters symbol LOND.OL and Bloomberg symbol LOND:NO.

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