London Mining Share Price (LOND)

Voldo, LOND nearly 20% up over the last month so hardly stagnated. Depends what your time frame is. Not a great deal of movement since the Q1 update but miners are generally out of favour at the moment (many for good reason). Seems LOND is being tarred with the same brush but when sentiment changes I expect this one to be one of the first to benefit. Realistically dividends are still a way of (maybe 3 years) but moving into profit this year makes them pretty exceptional for an AIM miner. Expect a far amount of the 2013 net income to go on capex contributing to the ramp up to 20Mwtpa target but once we are there then with reduced overheads per tonne this one should fly.

Your posts make interesting reads. With all this good news and a possibility of dividends coming, I am concerned why the share price is stagnated.

London Mining (LOND) the second-largest iron ore producer in Sierra Leone, is considering paying a first dividend as output at its Marampa mine expands and prices rise. Growth to a production rate of 5 million metric tons a year by the fourth quarter 2013 will bolster profit and enable payment of a dividend “at the right time,” Chief Executive Officer Graeme Hossie said. Rising output will help LOND post net income of $69 million in 2013, according to estimates from Jefferies Group Inc. analyst Seth Rosenfeld. “Focus on operational improvements in 2013 rather than further expansion projects should limit execution risk and improve free cash flow.” Higher cash flow “may pave the way for shareholder returns.”

“London Mining has made an excellent start to 2013 and we are pleased to announce record production and sales volumes in the first quarter. We are well advanced with the next stage of expansion to achieve a run rate of 5Mtpa by the end of the second half of this year and are reviewing high return opportunities for the further development of Marampa. As part of a programme of continuous improvements throughout our business we are increasing logistics capability, implementing our cost optimisation plan and are reviewing key areas of margin improvement including progressive reduction of FOB costs below USD50/dmt, improved FOB pricing from reduced ocean freight and reduction of our overall overheads. We are moving forward at Isua where we are encouraged following our initial engagement with the new Government of Greenland and continue to expect completion of the exploitation permitting process in 2013.”

Quarterly production of 706,000wmt iron ore concentrate, up 29% on the previous quarter Quarterly sales of 589,000wmt, up 52% on the previous quarter Commissioning of second plant completed increasing capacity to 3.6Mdtpa Annualised export rate of 3.9Mwtpa in April following arrival of first self propelled barge mid month, with second self propelled barge contracted to arrive in June Pride of Marampa loading ungeared Panamax vessels at end of Q1 2013 Production guidance of 3.3 to 3.6Mdmt and sales guidance of 3.6 to 3.8Mdmt maintained for 2013 Production from gravity circuit as well as 5Mtpa run rate expected Q4 2013

LOND had its price target decreased by JP Morgan Cazenove from 215p to 205p in a research report released on May 10th. JP Morgan Cazenove currently has an overweight rating on the stock. LOND has been the subject of a number of other recent research reports. Analysts at Credit Suisse reiterated an outperform rating in a research note to investors on May 9th. They now have a 200p price target. Separately, analysts at Jefferies Group reiterated a buy rating in a research note to investors on May 9th. They now have a 250p price target. Finally, analysts at Morgan Stanley reiterated an overweight rating in a research note to investors on May 9th. They now have a 220p price target. Eight analysts have rated the stock with a buy rating. The stock has a consensus rating of Buy and an average price target of 201.82p.