Resources

As announced in May 2011, Snowden Mining Industry Consultants now estimate a total primary resource, excluding tailings, of 971Mt grading 31% Fe comprising 566Mt at 32% Fe in the Indicated category and the balance in the Inferred category. These resources represent a tenfold increase of the historical primary resource of 84Mt grading 37% Fe reported at the time of London Mining‟s admission to AIM in November 2009. The resource also contains 24Mt of highly weathered ore at 38% and 107Mt of moderately weathered ore at 35% Fe. The tabular nature of the Marampa ore body, homogenous geochemistry of the ore and highly competent geotechnical behaviour of the Marampa pit walls means that a large part of the currently defined resource is expected to fall within the confines of an open pit and therefore in the final reserve.

Summary of Marampa resource as at March 2010 reported at a 15% Fe cutoff

Mining Lease Agreement ("MLA")

A mining agreement comprising of the fiscal arrangements for the project was agreed with the government and ratified by the parliament of Sierra Leone in early 2010. A review of the MLA by the Sierra Leone Government (“GoSL”) is near to conclusion. Current discussions with the Government review committee (“the Committee”) indicate there should be no material change to the project value as a result of any modifications to the MLA and associated fiscal incentive package and hence the investment programme remains unchanged.

London Mining has also engaged in discussions with the Committee to accelerate the review that was to take place after five years and to agree now what the fiscal regime will be for the five years from 2015. This will provide certainty on the financial modelling, in particular for the expansion of Phase 1 to incorporate the full effect of the weathered ore and the Phase 2 development. It is expected that the resulting package for the second five years should not differ materially from fiscal incentives either awarded recently to other mining companies or from those that have previously been negotiated with companies already having been through this review process. The Company supports efforts to increase transparency in the mining industry in Sierra Leone, and GoSL remains very supportive of London Mining‟s production and investment plans.

Offtake and marketing

An offtake agreement for Marampa was signed with the trading house Glencore International AG (“Glencore”) on 26 January 2011. The offtake covered 9.5 million wet metric tonnes (WMT) production from Phase 1a of the Company‟s Marampa project. The five year agreement, which included a pre-payment facility for up to USD 27 million, will provide guaranteed offtake and shipping from Sierra Leone for all Phase 1a production, with the option for London Mining to expand the agreement to Phase 1b on the same terms. The offtake will be based on Platts 62% CFR China benchmark, with an upward adjustment for the Fe content of the Company‟s 65% Fe sinter feed concentrate, and an incentive to place product at locations such as Europe where there is a net pricing benefit through lower shipping costs. The Agreement accommodates London Mining‟s ramp up expectations and is flexible

Environmental permitting and management

London Mining received its full environmental permit for the Marampa Phase 1 operations at the beginning of January 2011. The issuance of the permit followed the formal approval and acceptance by the Sierra Leone Environmental Protection Agency (“SLEPA”) of London Mining's Environmental Impact Assessment (“EIA”), the EIA having been discussed publically via four public hearings in Sierra Leone, which were attended by members of the public and NGOs. The permit is subject to an annual renewal by SLEPA, which requires ongoing environmental compliance in accordance with the Sierra Leone Environmental Act 2008 and the payment of an annual fee. The EIA meets all local regulations and London Mining is working with an internationally recognised environmental consultant to ensure compliance with international best practice.