TIDMBZM
RNS Number : 1651G
Bellzone Mining PLC
09 May 2011
9 May 2011
Bellzone Mining plc
("Bellzone" or the "Company")
Maiden Oxide Resource at Kalia Mine Project, Guinea
Bellzone Mining plc (AIM:BZM), the iron ore and nickel/copper
company developing the Kalia Mine Project, the Forecariah JV and
the Sadeka nickel/copper project in the Republic of Guinea, West
Africa, is pleased to announce an initial inferred JORC oxide
resource of 111 million tonnes grading at 38% Fe which can be
beneficiated using a standard gravity process to produce a quality
58% Fe fines product.
Highlights:
-- Initial inferred oxide JORC Resource of 111 million tonnes
grading at 38% Fe
-- Oxide product readily beneficiated using a standard gravity
process to produce a consistent and quality saleable oxide
product
-- Initial oxide fines product resource of 43 million tonnes
with an iron grade of 58% Fe
-- Mass pull (recovery by weight) of 39% - anticipated increase
in processing costs offset by government royalty reduction from 7%
to 3.5% for a beneficiated product
-- Initial oxide resource concentrated on 2.3km(2) (4.2%) of the
indentified 55km(2) oxide drilling targets
-- Resource is located directly above the 3.74 billion
tonnemagnetite JORC resource, thereby reducing magnetite pre-strip
costs for 2015 magnetite production
-- Accelerated drilling programme to continue JORC oxide
resource expansion with a target of 1.5 billion tonnes (+0.6
billion tonnes (20 years) of saleable oxide product)
-- Targeting minimum of 250 million tonnes of JORC oxide
resource (10 years of oxide production) by year end ready for
inclusion in the definitive feasibility study ("DFS")
-- Stage 1 drilling well advanced on 13.6km(2) Kalia II detrital
oxide target - results expected Q4 2011 with estimates of 600mt
being identified on the portion drilled to date
-- Stage 2 of the drilling campaign on the Kalia II detrital
oxide target will commence in Q4
-- Three new diamond drilling ("DD") rigs purchased, a second
reverse circulation ("RC") rig contracted and double shifts
initiated to accelerate the oxide and magnetite drilling campaign
to increase tonnes on the back of proven grade
Bellzone has mapped 55 km(2) of surface oxide material over the
Kalia permit area. The maiden oxide JORC campaign has been focused
on a 2.3km(2) (4.2% of total mapped oxide) area located above the
3.74 bn tonne magnetite JORC resource. The initial oxide drilling
programme targeted this material as it must be removed prior to
starting the magnetite mining operations. Proving this saleable
material as an initial production source supports the optimisation
of the mine plan and reduces operating costs. The Company is now
well advanced in its drilling programme on its second oxide target,
the 13.6km(2) Kalia II detrital oxide target. The phase 1 results
of the drilling on the Kalia II detritals, which has been underway
since November 2010, are expected in Q4 2011 with estimates of
600mt being identified on the portion drilled to date.
The oxide zone over the magnetites comprises varying grades of
material related to different stages of oxidation. Typically at the
surface there is a direct shipping ore ("DSO") style material and
as the oxide zone approaches the magnetite interface the grade
varies. The Company undertook work to investigate maximising the
oxide potential for a consistent oxide product through processing
and beneficiation.
Composite samples were tested at an independent accredited
laboratory in Perth, Australia. Favourable results were achieved
from standard gravity processes producing a quality oxide fines
product grading at 58% Fe, with deleterious elements falling into
acceptable ranges. The testwork achieved a mass pull (recovery by
weight) of 39%.
The beneficiation provides a larger resource base and a revenue
stream from the magnetite pre-strip material with the anticipated
additional costs being offset by royalty reduction for concentrated
ore from 7% to 3.5% for a beneficiated product.
Average Beneficiated Product Al(2)
Grade Fe Fe O(3) SiO(2) P LOI
58.0% 5.70% 4.0% 0.10% 6.2%
------ ------ ------- ------ -----
The Company's oxide development plan is targeting 1.5 billion
tonnes (+0.6 billion tonnes or twenty years of saleable oxide
product) of oxide resource from five key target areas comprising
63% of Kaila's 55km(2) surface oxide potential. The Company aims to
develop a minimum of 250 million tonnes of JORC oxide resource (10
years of oxide production) for inclusion in the DFS that is to be
completed by year end.
Bellzone has accelerated the oxide development programme by
implementing round the clock drilling and has contracted an
additional RC drilling rig that is expected to be on site by mid
July 2011. In addition, Bellzone has purchased three new DD rigs
which are expected to be operating within two months.
Target Kalia Central Area 2.3km(2) 111 million tonne inferred
1 I JORC resource
Target Kalia Detritals 13.6 km(2) In progress - results
2 II expected in Q4 2011
------ ------------- ----------- ---------------------------
Target Kalia NW Central 4.4 km(2) Planned
3 I Area
------ ------------- ----------- ---------------------------
Target Kalia NW Oxides 7.3 km(2) Planned
4 I
------ ------------- ----------- ---------------------------
Target Kalia SE Detritals 6.9 km(2) Planned
5 I
------ ------------- ----------- ---------------------------
Kalia II detritals hold exciting potential due to the large area
and easy access. An initial 700 hole, 28,000 metre drilling
campaign is underway which the Company expects will provide
sufficient data to delineate an inferred resource. Early results
from Kalia II are encouraging with detrital oxides present at
depths of over 30 metres. Geological assessment indicates the
detritals are potentially amenable to upgrade. Stage 2 of the
drilling campaign on the Kalia II detrital oxide target will
commence in Q4.
Nik Zuks, Chief Executive Officer commented: "This is another
significant value adding milestone for Bellzone. The proven ability
to upgrade the Kalia oxides overlaying the magnetite resource to
produce a consistent quality oxide product effectively provides
Bellzone revenue from the stripping activities needed for our 3.74
billion tonne JORC compliant magnetite resource.
This initial oxide resource has been achieved over a very small
portion of the mapped oxide potential at Kalia. The oxide resource
defined to date and the estimated additional 600mt identified
through the Stage 1 drilling on portion of the Kalia II target,
clearly illustrates that the Kalia Mine Project has the capacity to
deliver large quantities of consistent quality oxide and magnetite
product to the market.
This, along with our fully financed infrastructure solution and
January 2012 production from the fully funded Forecariah JV, sets
Bellzone apart from other projects under development."
CSA Global UK, the independent geologists have established and
certified the Company's first stage JORC complaint oxide resource
for Kalia.
Resource classification was based on a number of criteria,
including grade interpolation parameters, geology continuity,
Reverse circulation samples, survey and bulk density data, the
drilling grid and metallurgical beneficiation test work. The JORC
resource is based upon an 111 million tonne @ 38% Fe in ground
material that has been subjected to standard beneficiation methods
that remove the waste material to produce a marketable commodity.
The metallurgical test work confirms the resource is upgradable to
a quality iron product of 58% Fe.
The mineral resource information disclosed in this announcement
has been reviewed by Malcolm Titley (MAusIMM), a Director and
Principal Consultant of CSA Global. Malcolm is a member of the
Australasian Institute of Mining and Metallurgy and is qualified as
a Competent Person in terms of the "Australasian Code for Reporting
of Exploration Results, Mineral resources and Ore Reserves (JORC
Code 2004 Edition). Malcolm has sufficient experience relevant to
the style of mineralisation and type of deposit under consideration
and to the activity which he is undertaking, to qualify as a
Qualified Person for the purposes of this announcement.
Enquiries:
Bellzone Mining plc
Graham Fyfe +61 8 9420 8900
Canaccord Genuity Limited
Nominated Adviser and Joint Broker
to Bellzone +44 (0)20 7050 6500
Andrew Chubb/Tarica Mpinga
Renaissance Capital Limited
Joint Broker to Bellzone +44 (0)20 7367 7777
Simon Matthews/Thomas Beattie
Tavistock
Jos Simson/Paul Youens +44 (0)20 7 9203 150
+44 (0)7899 870 450
Bellzone Mining plc
Bellzone Mining plc is an exploration and resource development
company with iron ore and nickel / copper permits in the Republic
of Guinea, West Africa.
The Company's flagship project, the Kalia Mine Project has a
JORC resource of 3.74 billion tonnes, located on the Kalia I
prospect. Drilling results and internal estimates indicate that the
Kalia Prospect has the potential to host more than 10 billion
tonnes of magnetite and over 2 billion tonnes of oxide at
surface.
In addition to the Kalia iron mine, an exploration and
development programme is currently underway at the China
International Fund ('CIF') held Forecariah iron permits that lie
between 60 and 80 kms from the Guinea coast. Bellzone and CIF are
jointly developing these permits which are prospective for oxide
and magnetite. The development plan is designed to support an
initial production target rate of 3-4 mtpa of direct shipping ore
('DSO') in Q1 2012 ramping up to a target rate of 10 mtpa by
2013.
Bellzone is committed to the staged development of the Kalia
Iron Project, which includes a 50mtpa iron ore facility, rail and
port, with initial production scheduled in 2014. Stage one is
planned to bring a 20mtpa oxide online in 2014 and a 10mtpa
magnetite concentrator in 2015. Stage two increasing the oxide
output to 30mtpa in 2017 and doubling the concentrate capacity to
20mtpa by 2018
Bellzone signed an Infrastructure Accord with the Republic of
Guinea giving the Company exclusive rights to the designated port
and rail areas for purposes of conducting studies for the
development of the infrastructure leading to the signing of a
convention and concession. The infrastructure forms a key part of
the Guinea Government's infrastructure strategy and will support
the development of iron ore, bauxite and other minerals in Guinea
through its availability for 3rd party use.
On 2 August 2010, Bellzone signed definitive agreements with
China International Fund Limited ('CIF'). CIF will finance and
develop the rail and port infrastructure and offer a finance
package to Bellzone for the development of the Kalia Mine in
exchange for the first right to purchase 100% of the off--take of
the Kalia Mine at market price.
Bellzone has competed an intensive mapping and surface sampling
programme and has defined highly prospective drilling targets at
its Sadeka Nickel/Copper Project and has commenced a drilling
programme on these targets.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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