London Mining : Q2 2014 PRODUCTION REPORT

London Mining Plc

Quoted on London AIM (LOND LN)

("London Mining" or the "Company")

17 July 2014

Q2 2014 PRODUCTION REPORT

Production increased 30% from Q1 2014

Full year guidance of 4.9 to 5.4Mwmt maintained

Strategic discussions progressing

Highlights

Marampa, Sierra Leone (100% owned)

Operations

·           Q2 production of 1.2Mwmt, a 30% increase on Q1 2014

·           2014 production guidance of 4.9 to 5.4Mwmt/a maintained

·           Rolling 30 day average rate of 15.3kwmt/day achieved (5.6Mwmt/a)

·           Exceeds nominal capacity of 14.8kwmt/day (5.4Mwmt/a annualised)

·           Product grade of over 64% Fe now consistently achieved

·           Optimisation and debottlenecking should allow plant to operate at 110 to 120% of nominal capacity (5.9Mwmt/a to 6.5Mwmt/a)

·           Sold grade of 63.4% in Q2 2014, a 0.3% increase on Q1 2014, depleting lower grade stocks accumulated during commissioning

·           Stockpile of 64% Fe concentrate equivalent to c.1 month's production in place

·           Sales volumes 6% lower Q on Q due to repairs made to transhipment vessel and a "one-off" loading issue

·           Despite lower benchmark pricing, realised pricing improved by 7% to USD86/dmt as a result of improved grade, lower freight and hedging

Financing and strategic partner process

·           USD17.5 million prepayment facility in place with Vitol for 500kt of unallocated production

·           In active and constructive discussions for an additional short term working capital tranche of up to USD25 million with existing secured lenders

·           Progress being made in securing a strategic partner investment with the process expected to be complete before end of 2014

Commenting on the results Graeme Hossie, CEO, said : "We completed the ramp up of the processing plant upgrades in Q2, achieving an annualised run rate of 5.4Mwmt/a and product grades over 64% Fe in June. We are now focussed on increasing production rates by 10 to 20% above current nominal capacity through debottlenecking and plant optimisation. We reiterate production guidance of 4.9 to 5.4Mwmt for 2014 and intend to deliver a positive outcome for shareholders from our strategic partner process before the end of 2014."

Operations

Q2 2014 summary

*Free on board ("FOB") prices are net of freight and grade premium as at loading, but exclude marketing related fees.

Mining and production

Mined volumes for the first half of the year were 14Mwmt, a 55% increase year on year, and four months ROM stocks were in place ahead of the wet season. Improved performance, following the onset of the first rains, is also in evidence following construction of all-weather haul roads and improvements to drainage in mining areas. As a result, the pre wet season ROM stocks have been maintained.

Concentrate production was 1,166kwmt in Q1 2014, an increase of 30% on the previous quarter, which included a record month of production in June as ramp up of the plant upgrades was completed. A rolling 30 day average of 15.3kwmt/day has been attained, with 22 of the last 30 days in excess of nominal capacity (14.8kwmt/a or 5.4Mwmt/a annualised) and a peak daily production rate of 18kt was also achieved. Average produced grade for June increased to over 64% Fe. Recent performance has benefited from many plant maintenance initiatives undertaken this year.

A low cost optimisation programme to redirect excess milled high grade material from the spirals circuit to the magnetic separation plants will be in place in July and is expected to allow the plants to consistently operate at 110 to 120% of nominal capacity (equivalent to 5.9 to 6.5Mwmt/a annualised).

Production guidance of 4.9 to 5.4Mwmt/a for the year is reiterated.

Stocks of 64% Fe material equivalent to approximately one month's production were in place at the end of June. Several measures have been introduced in 2014 to allow more accurate reconciliation of concentrate stockpiles including: installation of a weighbridge, additional conveyor belt weightometers, more conservative density assumptions than used in 2013 and improved controls in volume and density survey processes.

Logistics and sales

Sales volumes were 830kt, 5% less than Q1 2014, as a result of lower exports in June as geared vessels with lower loading rates (on freight rates of less than USD30/wmt) were employed to allow maintenance and repairs to be carried out on the Pride of Marampa Floating Offshore Transhipment Platform (FOTP) to improve performance.

Although concentrate presented for export has remained below the approved transportable moisture limit (TML) of 10.9% concentrate sales were also impacted by a dispute related to the interpretation of TML of by a single vessel in June. This impacted loading rates but has not been repeated with concurrent or subsequent shipments. The vessel has since recommenced loading and we are working with the customer, shipping company and the Professional and Indemnity Club to prevent a reoccurrence of this issue.

Other improvements to logistics ahead of the wet season include improvements to barge loading facilities increasing the instantaneous loading rate by 25% to an annualised installed capacity of 8.8Mwmt/a and the addition of two new pusher barges which arrived in Q2. Significant cost benefits from the more efficient barging format, which uses less fuel than the two tug per barge solution employed in the first two years of operation and have half the cycle time, will be realised from Q3 2014. Critical path items are underway to allow loading of larger cape size vessels in the inner harbour in Q1 2015.

Realised pricing was improved from Q1 due to reduced penalty fees and demurrage with a significant gain realised due to hedging . As expected, freight rates for smaller Supramax and Panamax vessel classes were significantly lower in Q2, resulting in an average USD4/wmt saving compared with Q1 2014.

0.7Mdmt of Q2 sales were hedged at USD119/dmt CFR versus an average spot price of USD104/dmt. 0.8Mdmt of 2014 sales are now hedged at an average price of USD105/dmt CFR. Reported pricing on a quarterly basis may be impacted by the actual realised price for the portion of sales which are priced based on the CFR iron price two months post loading, which for H1 2014 will have a material impact due to the deterioration in iron ore pricing over the period. First deliveries into the Cargill offtake contract, which have the potential to realise a USD4-5/dmt improvement for 64 to 65% Fe concentrate on other Marampa offtake agreements, will commence in Q3 2014.

Health and safety

Following the outbreak of Ebola virus in the east of Sierra Leone, preventative measures have been put in place at our operation such as isolation facilities, screening, education programmes for our employees and communities and relocation protocols. The health and safety of our employees is our priority and we are working closely with government and health agencies to keep our people healthy. It is not expected that the outbreak will affect production.

Financing and strategic partner process

As disclosed in May, following the fall in iron ore price, and with the pricing environment remaining uncertain, the Company has been managing its cash flow tightly whilst working to increase its financial headroom. A new USD17.5million facility has been arranged and drawn down from Vitol as a partial prepayment on 500kt of future unallocated exports. The Company is also in active and constructive discussions with its lending banks for an additional short term working capital tranche of up to USD25 million, maturing towards the end of 2014. The combination of these two measures would satisfy expected short term liquidity and headroom requirements under current conditions.

London Mining is continuing to review opportunities to secure a strategic investor to reduce debt, fund future capital expenditure and accelerate potential growth plans. The process is underway and is expected to be complete before the end of 2014.

Audio webcast and conference call

There will be an audio webcast and conference call for analysts and investors hosted by Graeme Hossie (CEO), Benjamin Lee (CFO) and Jim North (COO) at 8.30am BST today.

The presentation will be available via a live and on-demand audio webcast, a link to the audio webcast can be found on London Mining's website here:http://www.londonmining.com/investors/reports-and-presentations/.

The webcast will include audio from the conference call. You will not be able to post questions through the audio webcast. Please use the following numbers and Conference ID to dial in to the conference call:

For more information, please visitwww.londonmining.comor contact:

About London Mining

London Mining is an expanding producer of high specification iron ore concentrate for the global steel industry and is focused on identifying, developing and operating sustainable mines. London Mining commenced production from its 100% owned Marampa Mine in Sierra Leone in 2011, producing 3.4Mwmt/a in 2013 and plans to expand the mine to a capacity of 6.5Mwmt/a. Marampa has sufficient resources to support a staged expansion to 20Mwmt/a. London Mining has also completed bankable feasibility studies outlining plans for a further 20Mwmt/a of iron ore production by developing mines in Greenland and Saudi Arabia. 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 atwww.londonmining.com.