London Mining (LON:LOND) has appointed PriceWaterhouseCoopers as its administrator after the company decided to throw the towel. Because of the continuously low iron ore prices, London Mining continued to see a serious cash outflow and desperately needed funding to keep its Marampa iron ore mine in Sierra Leone going.
Unfortunately the discussions with potential strategic partners didn’t result in anything and were expected to wipe out the existing shareholder base entirely. In what could be described as an ‘interesting development’, Frank Timis (who is the chairman of competitor African Minerals (LON:AML)) has teamed up with ASX-listed Cape Lambert Resources (ASX:CFE) whereby the latter will provide financing to acquire London Mining’s Marampa mine out of the bankruptcy procedure. Timis was successful in securing the asset for $20M, but it remains to be seen how he thinks to make the mine profitable again. London Mining also won’t be the last one to go down as competitor African Minerals is in an incredibly bad shape. It has announced it didn’t expect to receive any short-term funding anymore and trading in the company’s shares has been halted.
Disclosure: The author holds no position in any of the companies mentioned. Please see our disclaimer for current positions.
