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14-01-2009 09:10:00

London Mining - Strategic expansion - Iron Ore Joint Venture in China

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.

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