BZM Bellzone

TIDMBZM

RNS Number : 1213C

Bellzone Mining PLC

01 March 2011

1 March 2011

Bellzone Mining plc

("Bellzone" or the "Company")

Unaudited results for the year ended 31 December 2010

Bellzone Mining plc (AIM:BZM), the iron ore and nickel/copper company developing the Kalia Mine and the proposed Forecariah iron ore joint venture with its partner China International Fund Limited ("CIF") in Guinea, West Africa; today announces its full year results for the year ended 31 December 2010.

2010 - HIGHLIGHTS IN A YEAR OF SIGNIFICANT DEVELOPMENT

-- Bellzone Mining Plc listed on the AIM market of the London Stock Exchange

-- Mining Convention for Kalia and Infrastructure Accord secured through Presidential Decree

-- Funding for Kalia Mine and related infrastructure to be sourced with partner, CIF

-- Host country, Guinea, held successful democratic elections

-- Kalia JORC magnetite resource increased +50% from 2.4 billion tonnes to 3.74 billion tonnes

-- Forecariah JV fast tracked to target production in Q1 2012

-- Kalia Mine maiden JORC oxide resource in progress

-- Kalia Mine project development leadership team in place

-- Key contracts awarded for Kalia SEIA, EIA and DFS awarded

-- Sadeka nickel / copper drilling programme commenced

Nik Zuks, Managing Director of Bellzone Mining plc, commented: "2010 saw great developments and progress on all fronts for Bellzone. Guinea moved to a democratically elected government as promised by the interim government. Kalia's potential was expanded through the 50% magnetite JORC increase to 3.74 billion tonnes. A landmark agreement with the CIF will pave the way for Kalia's development and will open up Guinea's natural resources through the infrastructure that CIF will develop. In addition, our development of the Forecariah iron permits with CIF will transform Bellzone into a near term producer with production from January 2012.

The next year will see Bellzone continue the rapid progress it has shown in its first year as a listed company as management looks to maintain their track record of delivery to schedule. Overall, a very pleasing year where we achieved what we set out to achieve, providing exceptional growth in value to our shareholders."

Enquiries:

 
Bellzone Mining plc 
 Nik Zuks/Graham Fyfe            +61 8 9420 8900 
Canaccord Genuity Limited 
 Nominated Adviser and Joint 
 Broker to Bellzone 
 Andrew Chubb/Tarica Mpinga      +44 (0)20 7050 6500 
Renaissance Capital Limited 
 Joint Broker to Bellzone 
 Simon Matthews/Thomas Beattie   +44 (0)20 7367 7777 
Tavistock Communications 
 Jos Simson/Paul Youens          +44 (0)20 7920 3150 
 

Overview

Bellzone Mining plc ("Bellzone" or the "Company") is a Jersey registered publicly listed company trading on the AIM Market (AIM: BZM) of the London Stock Exchange.

The principal activity of the Company is the exploration and development of resources, primarily at its flagship Kalia Iron Project in Guinea, West Africa. While this continues at pace, the Forecariah Joint Venture (also in Guinea) is being fast tracked, with additional activities being undertaken at the Sadeka Nickel / Copper Project (again Guinea).

Kalia

The work at the 100% owned Bellzone Kalia Mine continues on the expansion and upgrade of the 3.74 billion tonne JORC compliant resource, alongside the detailed engineering design and feasibility studies.

Bellzone is planning a two stage development of the 50 mtpa Kalia Mine:

-- Stage I will provide 30mtpa production capacity with production scheduled in 2014 of 20mtpa direct shipping ore ("DSO") and 10mtpa of magnetite concentrate in 2015.

-- Stage II increases the DSO output to 30mtpa in 2017 and doubles the concentrate capacity to 20mtpa in 2018.

Bellzone successfully negotiated a mutually beneficial Mining Convention with the Guinea government, which was signed into law by Presidential Decree on the 31st of August 2010. The Mining Convention defines the commercial terms and conditions and obligations of the Company and the State during the development and operation of the Kalia Mine.

Similarly, an Infrastructure Accord, providing Bellzone with exclusive rights to the designated port and rail areas, for the purposes of conducting studies for the development of the infrastructure, leading to the award of an exclusive Build Own Transfer ("BOT") licence, was also signed into law by Presidential decree.

CIF

Bellzone signed a definitive agreement with China International Fund Limited ("CIF") setting out the detailed structure to work together to fund and develop the rail and port infrastructure that will allow transport of the production from the Kalia Mine. This infrastructure, through its availability for third party use, is fundamental to the Guinea Government's infrastructure strategy and will support the development of iron ore, bauxite and other minerals key to Guinea's growing economy.

Bellzone will retain a 10% non-dilutable free carry shareholding in the infrastructure company, Kalia Horizon Minerals Pte Ltd ("KHM"), which has been established to develop the rail and port facilities.

As part of our partnership, CIF will hold the first rights to 100% off-take of the Kalia production at market rates in exchange for offering Bellzone financing for the mine, but CIF has also agreed to return Bellzone rights to 20% of the off-take of the Kalia production if Bellzone decides that the mine portion of the CIF financing package is not suitable, allowing further financial flexibility.

Forecariah

Bellzone and CIF will jointly develop the CIF Forecariah permits located in an area between 40kms and 80kms from the Guinea south coast through a 50:50 JV. The permits are highly prospective for oxide and magnetite. An accelerated evaluation and development programme is underway to bring production on line in Q1 2012 at an initial rate of 3 to 4 mtpa, with production targeted to ramp up to 10 mtpa by 2013.

Other Projects

Bellzone has completed a mapping and surface sampling programme identifying highly prospective targets at its Sadeka Nickel/Copper Project. A drilling programme on the identified target areas commenced in Q4 2010.

Bellzone has acquired the rights to buy 70% of Compagnie Miniere de L'Ouest Africain SA, incorporated and holding tenements in Mali. The Company is undertaking geological studies on the tenements which are prospective for iron ore before making an investment decision.

Chairman's Statement

2010 was a year of significant development for our Company and we are looking to maintain that momentum as we continue to accelerate the Company's projects.

Following admission to the AIM market of the London Stock Exchange in April 2010, raising GBP33.6 million ($50 million), the Company has achieved a number of important milestones on schedule and has been able to advance certain areas at a faster rate than initially planned.

We are pleased to look back over the year and the achievements of the Management team, which in addition to those already noted, have included:

-- the signing of a Binding Memorandum of Understanding ("MOU") with China International Fund Limited ("CIF"), as announced on 24 May, which was a key development, securing a valuable partner and extensive access to capital;

-- awarding a contract to SGS Environment ("SGS") for the socio-economic impact assessment studies ("SEIA") and environmental impact assessment studies ("EIA") for the Kalia Mine in May, with work commencing in the same month;

-- announcing the signing of the Infrastructure Accord (the "Accord") with the Republic of Guinea on 17 June. The Accord gave Bellzone the exclusive rights on the designated area to conduct the technical and economic feasibility studies for the infrastructure and guarantees an exclusive build, own, transfer ("BOT") licence;

-- Mining Convention for the Kalia Mine (the "Convention") was approved and signed on 28 July;

-- executing the definitive agreement on the basis of the MOU with CIF on 2 August;

-- the Accord and the Convention passed into Guinea law through Presidential Decree signed on 31 August;

-- announcing an upgrade and increase in the magnetite JORC resource from 2.4 billion tonnes to 3.74 billion tonnes on the central zone of the Kalia I deposit in September;

-- completing the drilling programme for the maiden oxide JORC resource on schedule in November; and

-- appointed TWP Australia Pty Ltd in conjunction with Ausenco Limited as the engineering consultants to conduct the detailed feasibility study ("DFS") for the Kalia Mine in December.

Our agreement with CIF is expected to provide the finance for 100% of the rail and port infrastructure and market related financing for the development of the Kalia Mine and will account for the entirety of the project's funding requirements. As part of our partnership, CIF hold the first rights to 100% of the off-take from the Kalia production but CIF has also agreed to return Bellzone's rights to 20% of the off-take of the Kalia production if Bellzone decides that the mine portion of the CIF financing package is not suitable, allowing us further financial flexibility. Additionally, planning is well advanced for Bellzone and CIF to work in a 50:50 joint venture to develop the CIF iron permits in Forecariah with production scheduled for Q1 2012.

Our relationship with CIF has developed on all fronts and we continue to collaborate on the development of the rail and port infrastructure project as well as jointly on the Forecariah permit development. CIF has made progress in a number of areas, including the provision of US$40 million to fund the infrastructure projects through Kalia Horizons Minerals Pte Ltd ("KHM") and the procurement of engineering services.