The Royalty will be paid quarterly in arrears as per the amount receivable at the relevant point of sale, which is currently calculated with reference to the net freight on board price received from sales of iron ore in Sierra Leone.

London Mining chief executive officer Graeme Hossie said the proceeds drawn from the agreement will strengthen the company’s balance sheet and offer additional financial resources to enable Marampa expansion to 9Mtpa at the appropriate time.

BlackRock World Mining Trust chairman Anthony Lea said: ”This deal meets our investment objective of trying to raise income for the portfolio whilst at the same time also being exposed to growth in production and to changes in commodity prices.”

Goldman Sachs International has provided financial advice to London Mining on the Royalty Transaction.

The company is currently implementing its previously funded expansion to 5Mtpa capacity in H2 2013 next year.