BZM Bellzone

         development would require additional funding. The Director's believe 
         that the Group will continue as a going concern and base this view 
         on the factors set out below. 
         -- The pace of the development of the projects is subject to a number 
         of variables largely within the control of the Group. 
         -- The project development programs and budgets are reviewed on an 
         annual basis and approved by the Board. The Board in approving the 
         budget takes into account the: 
         - working capital available for the next twelve months 
         - work required to continue to meet commitments and advance the project 
         to the production phase; and 
         - maintenance of a sufficient buffer of working capital required for 
         the foreseeable future. 
         -- The Board monitors expenditure against budgets on a monthly basis 
         and adjusts the program as required. 
         The Directors believe that the Group has adequate resources to continue 
         for the foreseeable future, the flexibility to adjust operations to 
         suit funds and the ability to source funding through debt and equity 
         markets to continue with the planned exploration and project development 
         as well as any expansion of the scope or acceleration of activity, 
         thus they continue to adopt the going concern basis of accounting in 
         preparing the annual financial statements. 
   c. Changes in accounting policies 
       Change in functional and presentation currency 
        Effective 1 January 2010 the Company changed its functional and presentation 
         currency to the US dollar. 
         This change reflects the primary economic environment in which the 
         Group operates as it progresses to increase operational and investment 
         activity in iron ore in West Africa. The change also better reflects 
         the Group's business and improves the investor's ability to compare 
         results with other publicly traded businesses in the mining industry. 
         Prior to 1 January 2010 the Company presented its financial statements 
         in Australian dollars. 
         As a result of the change in presentation currency, the Company is 
         required to restate all comparative amounts to US Dollar by translating 
         the assets and liabilities using the current rate method. Under this 
         method the assets and liabilities are translated into US Dollar at 
         the exchange rate in effect at the end of each prior reporting period, 
         the income statement is translated using the average rate for the year/ 
         period and shareholder's equity is translated at historical rates. 
         All resulting exchange differences are reported as a separate component 
         of shareholder's equity titled "Cumulative Translation Adjustment". 
 
   d. Property, plant and equipment 
   Owned assets 
        Items of plant and equipment are stated at cost or deemed cost less 
         accumulated depreciation. Where parts of an item of plant and equipment 
         have different useful lives, they are accounted for as separate items 
         of plant and equipment. 
        The Group recognises in the carrying amount of an item of plant and 
         equipment the: 
        Cost of replacing part of such an item when that cost is incurred if 
         it is probable that the future economic benefits embodied within the 
         item will flow to the Group and the cost of the item can be measured 
         reliably; 
                  -- Freight costs used to bring the asset to its current location; 
                  -- Any costs of site preparation, installation and assembly; and 
                  -- Costs associated with decommissioning upon the removal or dismantling 
                   of the asset. 
                  -- Work in progress ("W.I.P") consists of assets under construction / 
                  assembly and not commissioned as operational. The carrying costs as 
                  outlined above are accumulated as W.I.P during construction / assembly 
                  until completion and the asset is commissioned into use at which time the 
                  asset is then transferred to the asset register and depreciated according 
                  to the asset classification. 
        All other costs are recognised in the Statement of Comprehensive Income 
         as an expense as incurred. 
                  Depreciation 
        Depreciation is charged to the Statement of Comprehensive Income on 
         a straight-line basis over the estimated useful lives of each part 
         of an item of plant and equipment. 
        The estimated useful lives in the current and comparative periods are 
         calculated from the date of operational commissioning and are as follows: 
        Freehold buildings                               5 Years 
        Plant and equipment                              3 - 5 years 
        Furniture, fittings and equipment                2 - 5 years 
        Motor vehicles                                   5 - 8 years 
        W.I.P                                            Not depreciated 
 
        The residual value, the useful life and the depreciation method applied 
         to an asset are reassessed at least annually. 
 
e. Mineral properties in the exploration and evaluation phase 
        The cost of acquiring exploration and evaluation assets, mineral reserves 
         and mineral resources is capitalised on the balance sheet as incurred, 
         under the heading "Mineral properties in the exploration and evaluation 
         phase". 
         Mineral properties are, upon commencement of production, depreciated 
         using a unit of production method based on the estimated economically 
         recoverable reserves to which they relate or are written off if the 
         property is abandoned. 
         The net carrying amounts of mineral properties are reviewed for impairment 
         either individually or at the cash-generating unit level when events 
         and changes in circumstances indicate that the carrying amount may 
         not be recoverable. To the extent that these values exceed their recoverable 
         amounts, that excess is fully expensed in the financial year in which 
         it is determined. 
 
   f. Exploration and evaluation expenditure 
        Expenditure on exploration and evaluation activities in relation to 
         areas of interest which have not yet reached a stage which permits 
         reasonable assessment of the existence or otherwise of economically 
         recoverable reserves are expensed as incurred. 
        Exploration and evaluation costs for each area of interest are carried 
         forward as an asset where the following conditions are satisfied: 
                  -- the rights to tenure for the economic development of the area of 
                  interest are current; -- The exploration and evaluation expenditures are 
                  expected to be recouped through successful development of the area of 
                  interest or alternatively by its sale; and -- The reserves are assessed 
                  as being economically recoverable through a financial and technical 
                  feasibility study. 
        Identifiable exploration assets acquired are accounted for in accordance 
         with the consolidated entity's policy as mineral properties. 
        Exploration and evaluation assets are assessed for impairment when 
         facts and circumstances suggest that the carrying amount of an exploration 
         and evaluation asset may exceed its recoverable amount. The recoverable 
         amount of the exploration and evaluation asset is estimated to determine 
         the extent of the impairment loss (if any). Where an impairment loss 
         subsequently reverses, the carrying amount of the asset is increased 
         to the revised estimate of its recoverable amount, but only to the 
         extent that the increased carrying amount does not exceed the varying 
         amount that would have been determined had no impairment loss been 
         recognised for the asset in previous years. 
         Where a decision is made to proceed with development in respect of 
         a particular area of interest, the relevant exploration and evaluation 
         asset is tested for impairment and the balance is then re--classified 
         to development. 
         Amortisation is recognised in the Statement of Comprehensive Income 
         on a unit of production basis over the estimated useful lives of intangible 
         assets, other than goodwill, from the date that they are available 
         for use. 
 
    g. Share-based payment transactions 
        Share-based payment arrangements in which the Group receives assets, 
         goods or services as consideration for its own equity instruments are 
         accounted for as equity-settled share-based payment transactions, regardless 
         of how the equity instruments are obtained by the Group. 
         The grant date fair value of share-based payment awards granted to 
         employees is recognised as an employee expense, with a corresponding 
         increase in equity, over the period that the employees become unconditionally 
         entitled to the awards. The fair value of the options granted is measured 
         using an option valuation model, taking into consideration the terms 
         and conditions upon which the options were granted (see note 19b). 
         The amount recognised as an expense is adjusted to reflect the actual 
         number of awards for which the related service and non-market vesting 
         conditions are expected to be met, such that the amount ultimately 
         recognised as an expense is based on the number of awards that meet 
         the related service and non-market performance conditions at the vesting 
         date. 

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