EQUITY OFFERING TO ACCELERATE DEVELOPMENT OF MARAMPA PROJECT

THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL

Neither this Announcement nor any part of it constitutes an offer to sell or issue or the solicitation of an offer to buy, subscribe or acquire any new ordinary shares in any jurisdiction in which any such offer or solicitation would be unlawful and the information contained herein is not for publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Japan, South Africa or any jurisdiction in which such publication or distribution would be unlawful. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 (as amended), under the securities legislation of any state of the United States or under the applicable securities laws of Australia, Canada, Japan or South Africa.

Highlights

• Equity offering of USD90m
• Enables Company to bring forward Marampa production ramp-up to 5Mtpa to 2014 when combined with expected offtake prepayment financing facility of approximately USD45m
• Economies of scale improve operating costs in 2013 and 2014 and secure development of infrastructure for expanded sustainable mine life
• Increased cash flow positions Company for straightforward, low-cost expansion to 9Mtpa
• Additional headroom of USD30m for further downside protection
• First ship has arrived and is being loaded

Graeme Hossie, Chief Executive Officer of London Mining said “The equity issue announced today will enable London Mining to accelerate the growth of the Marampa Project in Sierra Leone, as well provide us with greater headroom to execute our long term strategy and withstand short term fluctuations in the iron ore price. Marampa has already been significantly technically de-risked following the start of production of high quality sinter concentrate from the first plant and the full commissioning of the logistics required to supply the seaborne iron ore market.”

London Mining announces that the Company intends to raise USD90m through an offering of new ordinary shares to institutional shareholders by way of a firm placing and a conditional placing, completion of which will be subject to shareholder approval (the "Placing"). The net proceeds of the Placing are intended to be used primarily to fund acceleration of production at the Marampa iron ore project in Sierra Leone.

The USD90m Placing proceeds, combined with the expected USD45m prepayment of offtake from expanded production, will fund accelerated Phase 1 expansion to 5Mtpa by 2014. The accelerated programme now includes earlier expansion of the existing plant, accelerated development of the second processing plant and earlier than expected enhancement of logistics required to ensure delivery of higher volumes of production. Early funding of this expansion program will allow construction to commence ahead of the wet season in Sierra Leone (May to October) and allows the retention of the construction team responsible for the successful completion of the existing Marampa operation.

The specific uses of the combined USD135m proceeds include: USD15m for the accelerated upgrade to 2.5Mtpa and optimisation of the existing plant including installation of ball mill and gravity circuit; USD56m for acceleration of construction and ordering of long lead items for the second 2.5Mtpa Phase 1 plant ahead of the wet season; USD10m to undertake the Phase 2 BFS for expansion to 17Mtpa; and acceleration of USD12m of the USD40-50m infrastructure upgrade and optimisation programmes that were previously scheduled for 2014. The remainder of the proceeds will provide a USD30m contingency buffer including downside pricing contingency, plus an additional USD12m for working capital, fees and general corporate purposes, including other London Mining projects.

As announced on 17 January, the Company has received term sheets from two potential offtakers for USD45m of prepayment related to the provision of future offtake.  As soon as the USD45m prepayment offtake agreement is signed, the Company will initiate construction to execute this accelerated production expansion.

The identification by the Company of more highly weathered high grade ore and its analysis of the potential for the application of a gravity process combined with magnetic separation during BFS work for the 9Mtpa expansion has identified a simple and low incremental investment potential to rapidly increase plant output to 5Mtpa.  Expansion to 5Mtpa for total project capital expenditure of USD300-310m represents low capital intensity of less than USD62/t of production capacity.

Marampa production is expected to be unchanged at 1.5Mtpa in 2012, increased by 0.7Mt to 4.2Mt in 2013 and by 0.4Mt to 5Mtpa in 2014. This increased production provides the operation with significant economies of scale, improving near term operating margins and secures the development of the infrastructure enhancements and support services required for a larger, longer life operation.

Successful delivery of the near term production plan in 2012 and 2013 will provide London Mining with significantly increased cash flow and takes advantage of expected higher pricing over the next three years. The expected increased cash flow will also strengthen London Mining’s capability to self-fund the future expansion at Marampa to 9Mtpa.

Loading of the first seagoing vessel commenced on 23 January and a further two vessels have been requested for February loading.

The Placing

London Mining announces that the Company intends to raise USD90m through an offering of new ordinary shares ("Ordinary Shares") in the Company (the "Placing Shares") to institutional and other investors.

Up to 11,199,214 Placing Shares are to be placed firm and are to be issued by the Company further to the directors' authority to allot Ordinary Shares for cash on a non-pre-emptive basis (the "Firm Placing Shares"). An additional number of Placing Shares ("Conditional Placing Shares") will be placed with investors conditional on shareholder approval at a general meeting of the Company to be convened on or around 13 February 2012 (the "GM"). The precise total number of shares issued in the Placing will be finally determined such that the proceeds arising from the Placing amount to approximately USD90 million (before expenses).

The Placing is subject to the terms and conditions set out in Appendix A.

J.P. Morgan Cazenove and Liberum Capital Limited will today commence an accelerated bookbuilding process in respect of the Placing ("Bookbuild"). The book will open with immediate effect. The timing of the closing of the book, pricing and allocations is at the discretion of J.P. Morgan Cazenove, Liberum Capital Limited and London Mining. Details of the Placing Price will be announced as soon as practicable after the close of the Bookbuild.

The Company will apply for admission of the Firm Placing Shares to trading on AIM ("First Admission"). It is expected that admission to trading of the Firm Placing Shares on AIM will take place on or around 27 January 2012.

The Company will also apply for admission of the Conditional Placing Shares, the issue of which is subject to shareholder approval, on AIM ("Second Admission"). It is expected that admission to trading of the Conditional Placing Shares on AIM will take place on or around 14 February 2012.

The Placing Shares will, when issued, be credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after First Admission or Second Admission (as applicable) in respect of the Ordinary Shares then in issue and will otherwise rank on First Admission or Second Admission (as applicable) pari passu in all respects with the existing issued Ordinary Shares of the Company.

Following notice of the meeting convening the GM, the timing of the admission and settlement of the Conditional Placing Shares will be confirmed.

The Firm Placing is conditional, among other things, upon First Admission becoming effective. The Conditional Placing is conditional, among other things, upon shareholder approval and First Admission and Second Admission becoming effective. The Firm Placing is not conditional on the Conditional Placing.

The Placing is also conditional upon the placing agreement between the Company, J.P. Morgan Cazenove and Liberum Capital Limited not being terminated. Appendix A to this Announcement (which forms a part of this Announcement) sets out further information relating to the Bookbuild and the terms and conditions of the Placing.

J.P. Morgan Cazenove and Liberum Capital Limited (together, the “Banks”) are acting as Joint Bookrunners and J.P. Morgan Cazenove is acting as Sole Global Coordinator in connection with the Placing.

For more information, please contact:

About London Mining

London Mining is focused on identifying, developing and operating mines to become a mid-tier supplier to the global steel industry. London Mining is producing high specification iron ore from its Marampa Mine in Sierra Leone and developing two other iron ore mines in Greenland and Saudi Arabia as well as a coking operation in Colombia. All London Mining's assets have deliverable production with potential for expansion. The Company listed on AIM in London on 6 November 2009. It trades under the symbols LOND.L (Reuters) and LOND LN (Bloomberg). More information about London Mining can be found at www.londonmining.co.uk.

Neither the content of the Company’s website nor the content of any website accessible from hyperlinks on the Company’s website (or any other website) is incorporated into or forms part of this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to compare, continue to hold, or dispose of, securities in the Company.

This Announcement is for information only and does not contain or constitute an offer of, or the solicitation of an offer to buy, securities in Australia, Canada, Japan, South Africa or the United States or any jurisdiction in which the same would be unlawful. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "US Securities Act"), under the securities legislation of any state of the United States or under the applicable securities laws of Australia, Canada, Japan or South Africa. The securities referred to herein may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada, Japan or South Africa or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, Japan or South Africa. Any failure to comply with these restrictions may constitute a violation of U.S., Australian, Canadian, Japanese or South African securities laws, as applicable. No public offer of London Mining's securities is being or will be made in the United Kingdom, the United States, Australia, Canada, Japan, South Africa or elsewhere. No action has been taken by London Mining or the Banks that would permit an offering of the securities referred to herein or possession or distribution of this Announcement or any other offering or publicity material relating to such securities in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by London Mining and the Banks to inform themselves about, and to observe, any such restrictions.

This Announcement has been issued by and is the sole responsibility of London Mining. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Banks or by any of their respective affiliates or agents as to or in relation to the accuracy or completeness of this Announcement, or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is hereby expressly disclaimed.

J.P. Morgan Cazenove, which is authorised and regulated by the Financial Services Authority ("FSA"), and Liberum Capital which is authorised and regulated by the FSA are acting for London Mining in connection with the Placing and no one else and will not be responsible to anyone other than London Mining for providing the protections afforded to clients of J.P. Morgan Cazenove and Liberum Capital, respectively, or for providing advice in relation to the Placing.

This Announcement is not for publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Canada, Australia, Japan, South Africa or any jurisdiction in which the same would be unlawful.

Certain statements in this Announcement are forward-looking statements which are based on London Mining's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, London Mining undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this Announcement is subject to change without notice and neither London Mining nor the Banks assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

Any indication in this Announcement of the price at which Ordinary Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of London Mining for the current or future financial years would necessarily match or exceed the historical published earnings per share of London Mining.

EQUITY OFFERING TO ACCELERATE DEVELOPMENT OF MARAMPA PROJECT INCLUDING APPENDIX