(Adds comment from Liberia president)
By Daniel Flynn
DAKAR, Jan 26 (Reuters) - Sable Mining aims tobegin production from its Nimba iron ore mine in Guinea in thefirst half of next year after last week's deal to useinfrastructure in neighbouring Liberia, the company's chairmansaid on Monday.
Jim Cochrane said the AIM-listed company, shares in whichsoared 156 percent after Friday's Liberia announcement, expectsto conclude a financing feasibility study around the middle ofthis year and is confident of securing the funds needed for themine's development.
The 25-year deal with Liberia allows Sable to useArcelorMittal's nearby rail link to the port ofBuchanan, the most direct export route. Liberia said iron oreexports could begin before the end of this year, but Cochraneplayed down that timeframe.
Cochrane said about $300 million would be needed to startoperations at the mine, which is expected to have an annualoutput of 3 million tonnes, and that the company is consideringoptions including debt and equity issues and potentialpartnership with another business.
He also played down the importance of a slide in iron oreprices after the benchmark 62 percent-grade ore for immediatedelivery to China <.IO62-CNI=SI> slipped on Friday to $65.90 atonne, approaching its lowest level since June 2009.
"Once the feasibility study is complete, the time toproduction would likely be around 12 months," Cochrane said. "Weare not too worried about the fall in prices ... Ore from thismine is mostly high-grade, so it will earn a premium to the 62percent price."
Shares in Sable, with a market capitalisation of 22.2million pounds ($33.3 million), gained a further 17.5 percent by1321 GMT on Monday.
Liberia's President Ellen Johnson Sirleaf said the dealboded well for the future after several decades of talks betweenLiberia and Guinea over how to cooperate on iron ore shipments.
"This is a milestone in regional integration, opening theway for stronger cooperation between our two countries andbroadening the opportunities for large-scale investments," shesaid in a speech to the nation on Monday.
An ArcelorMittal spokesman acknowledged the steelmaker isaware of the infrastructure agreement between Sable and Liberiato use surplus rail and port capacity but said any arrangementmust not have an adverse impact on its own operations.
"Any arrangements related to the existing infrastructure inLiberia will need to be made in agreement with ArcelorMittal,"the spokesman said.
ArcelorMittal produces around 5 million tonnes of iron ore ayear from its Liberia mine, well below the target of 15 milliontonnes it had originally set for this year. (Additional reporting by Silvia Antonioli in London and JamesGiahyue in Monrovia; Editing by David Lewis, David Goodman andDavid Evans)
