Frank Timis, Chairman of African Minerals
Chairman of African Minerals Limited, AML, Frank Timis, is said to be close to securing a deal to buy the cash trapped London MiningCompany, LMC’s, operations in Sierra Leone, according to The Telegraph.
Last week London Mining toppled into administration after failing to find a buyer for the business as it struggled with debts following a slump in iron ore prices.
Finance minister, Kaifala Marah, was in London last weekend to join talks about the potential sale of the Marampa mine, which had 1,400 people and has iron ore reserves expected to support production for the next 40 years.
Bloomberg online reported that Timis Mining Corporation had agreed to borrow $20 million from Australia’s Cape Lambert Resources Ltd. to help fund the purchase of the mine from the administrator, Cape Lambert has said in a statement to the Australian Stock Exchange.
The funding takes the form of a 12-month $8 million loan and a $12 million royalty purchase, which gives Cape Lambert $2 for each metric ton of iron concentrate sold by the mine.
Mr Timis's AML owns the Tonkolili project, north of the country, and was expected to enter into a joint venture with Marampa.
London Mining had been working with Goldman Sachs and Standard Chartered to try to find a strategic buyer to plug a funding gap, which meant that it was running out of money to service its only operating iron ore mine.
The collapse came just a week after London Mining’s chief executive, Graeme Hossie, warned investors that there was little to no value left in the equity of the shares.
Indian steel conglomerate Jindal had also been involved in discussions about buying the mine.
LMC was ravaged by the plummeting price of iron ore which is sitting at its lowest level since 2009. The group was also hit by a spat with commodities giant Glencore over the pricing of an iron ore supply contract, which is said to have put a squeeze on its short-term cash position.
The Ebola outbreak, which has sparked a crisis in Sierra Leone, has also piled pressure on the group, which has already chartered flights to move its “non-essential” staff out of the country.
LMC and Timis Corporation could not be reached for comment.
(C) Politico 23/10/14
