London Mining PLC (LON:LOND) said it has entered into a joint venture with am unspecified Chinese and Chilean based partner to take advantage of several iron ore opportunities in the Atacama region of northern Chile.
The UK based developer of mines to supply the steel industry said the joint venture company, Atacama Mining Resources Corp, through its Chilean subsidiary, holds options over concessions to iron ore deposits in the Atacama. Under the agreement, London Mining has subscribed for 50 percent of the JV shares of Atacama.
London Mining has also agreed to make additional loans of in aggregate US$5million to the Chilean subsidiary of Atacama to fund acquisitions of a number of concessions in the area and to get exclusive rights from the JV partners on future iron ore prospects in Chile.
The loans will be repaid to London Mining from the earlier of first sales of ore made by the joint venture or third party funding into the joint venture.
The Atacama projects are located within a short distance from a number of potential port opportunities and logistics arrangements for export to China are being investigated.
London Mining chief executive Graeme Hossie said: "We are very excited to have concluded these arrangements which bring a strong pipeline of future development potential to the group. We are currently undertaking resource definition activities and investigating the potential to obtain early production with very low investment by Atacama. We look forward to releasing updates on this activity later this year."
London Mining is focused on identifying, developing and operating scaleable mines to become a mid-tier supplier to the global steel industry. London Mining is developing four iron ore mines, Marampa in Sierra Leone, Wadi Sawawin in Saudi Arabia, Isua in Greenland and one in China through a 50 percent stake in a JV, as well as a coking coal operation in Colombia. All London Mining's assets have deliverable production with potential for expansion.