(Corrects share price to pence in paragraph 7)
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 that about $300 million would be needed tostart operations at the mine, which is expected to have annualoutput of 3 million tonnes a year, and that the company isconsidering options including debt and equity issues andpotential partnership 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, which has a market capitalisation of 22.2million pounds ($33.3 million), gained a further 17.5 percent by1321 GMT on Monday to 2.37 pence a share.
An ArcelorMittal spokesman acknowledged that the steelmakeris aware of the infrastructure agreement between Sable andLiberia to use surplus rail and port capacity but said that anyarrangement must not have an adverse impact on its ownoperations.
"Any arrangements related to the existing infrastructure inLiberia will need to be made in agreement with ArcelorMittal,"the spokesman said. (Reporting by Daniel Flynn; Additional reporting by SilviaAntonioli; Editing by David Goodman)
