London Mining shares ‘worthless’ due to funding fears
Iron ore producer London Mining’s (LON:LOND) shares sank again Wednesday as the firm updated investors on its ongoing financing crisis, saying the stock now have “little or no value.”
The company was trading down 96% to lows of 0.12 pence after the statement, before recovering in morning trade to change hands at 0.7 pence, or 77% down. After today, London Mining has virtually lost 100% of its value since the start of the year.
The Sierra Leone-focused, owner of the Marampa mine, said its lenders remained supportive of the talks with potential investors, but were not expected to provide short-term funding. That cash injection would come from a new partner, if one can be found.
“Under the structures currently proposed, the board believes that there will be little or no value remaining in the equity of the company and the other listed securities of the group,” the miner said.
The miner is just one of the most recent casualties in the iron ore market. Companies big and small are suffering from record low prices for iron ore in the face of oversupply and weak demand from key consumer China.
BHP Billiton, one of those companies increasing its Australian output, acknowledged this week that some projects would be casualties of the lower price for iron ore.
Adding to the company’s issues is the Ebola outbreak in western Africa, which the company said in August was affecting both its supply chain and the expected 2014 output from Marampa.
Image courtesy of London Mining.