London Mining reports resource increase at Marampa

By: Petronel Smit, 17th January 2011

JOHANNESBURG (miningweekly.com) – The primary resource at London Mining’s Marampa iron-ore project, in Sierra Leone, had increased tenfold compared with the primary resource of 84-million tons grading 37% iron reported at the time of the company’s Aim listing in November 2009.
The miner on Monday reported that Snowden mining industry consultants estimated a total resource of 906-million tons grading 31,7% iron, comprising 379-million tons at 32% iron in the indicated category and 527-million tons at 32% iron in the inferred category.
This represented a 70% increase to the total primary resource of 533-million tons at 31% iron reported in November 2010.
CEO Graeme Hossie said that Marampa now has a resource base to support a long-term mining operation at 16-million tons a year with low capital intensity and simple logistics, allowing London Mining to become a major new entrant into the seaborne market during 2011.
The new resource also includes 24-million tons at 38% iron of highly weathered ore and 107-million tons at 35% iron of moderately weathered material, which could be considered for inclusion in the Phase 1 mine plan. A further 20 000 m of drilling was planned to upgrade inferred resources to the indicated category.
The miner expected to incorporate the new resources into a fully integrated mine plan for the Phase 1 and the Phase 2 expansion by the end of the first quarter of 2011, with the new weathered resources expected to substantially extend the life of Phase 1.
London Mining was applying a two-phase approach to the development of Marampa. Phase 1 considered the processing of tailings from previous operations and weathered ore to produce 3,6-million tons a year of high-grade concentrate for blast furnace sinter production.
Phase 2 was scoped for production of up to 16-million tons a year of blast furnace pellet feed from unweathered ore. The sinter concentrate and blast furnace pellet feed would both have an iron content of around 65% and no significant levels of impurities were expected.
Both products were expected to be readily marketable in the seaborne market.
Test work indicated that 100% of the highly weathered material and around 75% of the material considered moderately weathered could be processed in the Phase 1 processing circuit with the installation of additional milling capacity. The remaining moderately weathered material would be stockpiled for processing in Phase 2.
The current Phase 1 mine plan was based on the August 2010 resource estimate and considered a blend of tailings and weathered ore at a 70:30 ratio to produce run-of-mine ore with a head grade of 27% iron. It was expected that the new resources would allow for significant increases to mine life and capacity to be considered for both Phases 1 and 2.
As a result of the new resources, London Mining was in the process of relocating several components of its Phase 1 operation, such as site accommodation, tailings storage and drinking water supply, to allow all new resources to be included in an updated production plan.
It was expected that this would result in the delay of mechanical completion and commissioning from the end of the second quarter to the end of the third quarter, 2011, with the shipment of the first concentrate following within one month of first production.
The major long-lead item, the wet high-intensity magnetic separation plant, is now on site with the power generation sets expected on site during the first quarter of 2011.