London Mining Plc (OSL:LOND) London Mining - Strategic Expansion - Iron Ore Joint Venture In China

London Mining Plc (OSL:LOND) London Mining is pleased to announce that, further to its press release made on 22 August 2008, it has now entered into a conditional subscription agreement with Wits Basin Precious Minerals Inc ("Wits Basin") to become a joint venture partner for its iron ore projects in the People's Republic of China ("PRC"). Under the subscription agreement it has agreed to subscribe USD 39.25 million for 50% of the shares in the joint venture company, China Global Mining Resources (BVI) Limited ("CGMR BVI"). It has also agreed to make a loan of USD 5.75 million to Wits Basin. The subscription and loan will be funded from London Mining's existing cash resources.

CGMR BVI has entered into certain escrow arrangements in the PRC in respect of the acquisition of two Chinese companies: Xiaonanshan Mining Co limited ("XNS") and Nanjing Sudan Mining Co limited ("Sudan"). The two companies operate iron ore mining and processing operations near Maanshan in the Anhui and Jiangsu Provinces in the PRC. It is a condition of completion of the acquisitions that CGMR will also be granted the right to acquire a further iron ore mining company, Maanshan Zhaoyuan Mining Co Ltd ("Matang"), which is owned by the sellers of XNS and Sudan.

Cost reduction and expansion of the existing operations (targeting a run rate of 1.2mtpa production capacity during 2011), combined with a more focussed marketing strategy are expected to ensure operating margins remain strong despite the near term outlook for lower commodity prices. The close proximity to local steel mills of the mines enables premium pricing due to the low transportation costs.

The completion of the subscription agreement with Wits Basin and the acquisition of XNS and Sudan are subject to certain closing conditions, including the receipt of business licences and permits relating to the transfer and the operation of the mining properties. It is anticipated that the acquisition of XNS and Sudan will complete by the end of the first quarter of this year.

Christopher Brown, Managing Director of London Mining said "This joint venture with Wits Basin is of great strategic importance to us and it should help to regenerate interest in our company. We will be one of the first western companies to own a profitable iron ore mine in China, a country which is the largest importer of iron ore in the world. The concentrates are of good grade and we expect premium pricing compared to other exporting producers to China, due to the much shorter transport distances to local steel mills. This deal not only is expected to give us solid cash flows, but also to give our company access to market intelligence on what really is happening to iron ore markets in China, as well as further iron ore mining opportunities in the region."



For further information, please contact:

London Mining Plc Christopher Brown, Managing Director +44 (0)20 7201 5000 Graeme Hossie, Corporate Development & Deputy Managing, Director, +44 (0) 20 7201 5000 +44 (0)20 7201 5000

Crux Kommunikasjon AS Charlotte Knudsen +47 97 56 19 59 +44 (0)20 7653 9855 Threadneedle Communications (UK) Laurence Read/Graham Herring,

Notes to the Editors:

London Mining London Mining is incorporated and registered in the UK, and is developing mines to supply the global steel industry. The Company has operational mining, exploration and development projects located in Sierra Leone, Saudi Arabia, Greenland, Mexico and South Africa, and has total iron ore resources of 1.3 billion tonnes containing an estimated 45 million tonnes of iron. In 2007, London Mining raised over USD 185 million 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. In August 2008 London Mining sold its Brazilian operations to Arcelor Mittal for USD 810 million and returned USD 344 million to shareholders and USD 60 million to bond holders. The balance of funds received is being allocated to existing and new projects. London Mining is trading under the Reuters symbol LOND.OL and Bloomberg symbol LOND:NO.

Please also visit our website www.londonmining.co.uk for more information about London Mining and its operations.

Wits Basin Wits Basin is a minerals exploration and development company holding interests in three exploration projects and currently does not claim to have any mineral reserves on any project. Its common stock trades on the Over-the-Counter Bulletin Board under the symbol "WITM."

To find out more about Wits Basin Precious Minerals Inc. (OTCBB:WITM) visit Wits Basin's website at www.witsbasin.com.

Additional information The XNS mine is located approximately 44km southwest of Nanjing and 24km ESE of Maanshan, in the Anhui Province. The magnetite iron ore mineralisation occurs within a dioritic porphyry body, which has intruded into andesite and may be covered by tuffaceous breccia and tuff. The open pit mine currently mines approximately 1.2-1.5 million tpa of ore and a similar amount of waste, with mining and stripping costs estimated at 20-25Yuan RMB/t (USD 2.92-3.65/t). Resources have been estimated at 31.2million tonnes of magnetite ore averaging 23.64% Total Fe by No. 322 Geological Brigade to Chinese standards (not JORC) in March 2007.

Low grade ores and waste are crushed and magnetically concentrated on site at the preliminary concentrator, before being trucked with higher grade ores approximately 7km on a concrete paved road to the Sudan No.1 and No.2 concentration plants, located in the Jiangsu Province, where there is sufficient tailings capacity. The ore is then concentrated on a 3-3.5:1 basis to produce approximately 400,000tpa of 62-63% Fe product. The close proximity to local steel mills enables premium pricing due to the low transportation costs. In 2008, sales revenues peaked at USD 130/t and in early 2009 average around USD 85/t, with total operating costs averaging around USD 50-60/t of concentrates.

CGMR has engaged a highly professional management team that includes Mr William Green, Mr Loong Keat Tan, and Dr Clyde L Smith to manage the operations. Mr Green is a graduate of the University of Pennsylvania's Wharton School of Business and has more than 15 years of business experience in Asia. Mr Tan will guide the mining operations: a former mining executive who served Rio Tinto for 21 years as General Manager of various projects including Hamersley Iron's Mount Tom Price Mine in Western Australia and Bougainville Copper Ltd.'s mine in Papua New Guinea. Mr Tan also served Rio Tinto as head of their Hong Kong and Beijing offices. Dr Smith, who will guide geologic studies, is an experienced mining industry geologist who has been responsible for discovery of five ore deposits in Canada, the U.S., and Mexico.

As at 29 October 2008, XNS and Sudan had approximately 400 employees.

CGMR intends to create additional value by reducing costs through operating efficiencies and executing expansion plans, with a run rate target for XNS of 1.2 mtpa production capacity during 2011. Further production increases and efficiencies would arise from the addition of a new mining operation at Matang, located about 9km WSW of the Sudan plant. Matang has a 21.88million tonnes magnetite resource averaging 25.15% Total Fe estimated by No. 322 Geological Brigade to Chinese standards (not JORC) in December 2003.

Under the terms of the acquisition of XNS and Sudan, the sellers, Mr Lu Benzhao and Ms Lu Tinglan, receive consideration of approximately USD 42.25 million in cash (subject to adjustment) in return for 100% of the share capitals of XNS and Sudan. Of this consideration, up to approximately USD 17.48 million can be deferred. One of the sellers will also receive up to a further USD 53.95 million (subject to adjustment) in compensation under a consulting agreement with CGMR BVI, of which USD 10 million is payable on completion and the balance is payable subject to available cash from the operations of the acquired entities. Under the joint venture arrangements London Mining will receive priority dividends from CGMR BVI until its USD 45 million initial investment is repaid. Mr Lu Benzhao will initially remain as a director of XNS and Sudan. The fee is still to be agreed

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.



LINK: http://hugin.info/137683/R/1282017/286799.pdf

London Mining Plc

http://www.londonmining.co.uk/

ISIN: GB00B1VZK334

Stock Identifier: OSE.LOND