Debt-hit London Mining today warned that its share value would fall to nearly nil as a result of a halt in operations in Sierra Leone due to the Ebola outbreak.
The company's shares closed at a record low of 4p last week - a massive fall considering they were trading at a high of 432p in 2011.
Shares in the Aim-listed iron ore miner plummeted last week after it admitted it would run out of money to service its only operating mine in Sierra Leone if it failed to raise new financing.
The desperate position also comes after a spat with commodities giant Glencore over the pricing of an iron ore supply contract, which, reportedly had put a squeeze on its short-term cash position.
The company was in talks with a strategic investor, though a deal would wipe out investors under the proposed rescue terms.
"Under the structures currently proposed, the Board believes that there will be little or no value remaining in the equity of the Company and the other listed securities of the group", London Mining said.
"The capital that is needed from such an investor is significant and the proposals currently contemplate funding of the life of mine expansion and a cash injection into Marampa to allow the mine to continue operating," the company said.
According to the company, while its lenders remained supportive of the talks, they were not expected to provide any further short-term funding, which would be provided by a strategic investor if the talks were successful, Reuters reported.
"There can be no certainty at this time on the likelihood or timing of such an investment," said the company, which operates the Marampa mine in Sierra Leone.