BZM Bellzone

TIDMBZM

RNS Number : 6100I

Bellzone Mining PLC

17 June 2011

17 June 2011

Bellzone Mining plc

("Bellzone" or the "Company")

Forecariah JV Progress Update

-- Project on schedule to achieve production Q1 2012

-- Diamond and Reverse Circulation drilling progressing

-- Phase I internal resource (tonnage) estimates expected July 2011 and internal resource classification Q3 2011

-- Port studies for completion in July 2011

-- Construction of road to port site commenced

-- Mine developments on schedule

-- First phase of mine camp constructed

Bellzone Mining plc (AIM:BZM) is pleased to report that the Forecariah JV Project (the "JV") with China International Fund ("CIF") in the Republic of Guinea, West Africa, is on schedule to commence production of iron ore in Q1 of 2012.

Resource Development

In December 2010, the Company commissioned an independent geologist to undertake a review of previous work done on the area and to design a resource development plan. A number of targets (Yomboyeli, Layah, Moussayah, Santiguiyah and Doto) were identified and Yomboyeli was selected for initial development.

The Phase I resource development, includes mapping, surface sampling and drilling. Bellzone expects to be announcing Phase I internal resource estimates in July with an internal resource classification expected in Q3 2011. Work done on the Phase I resource to date includes:

-- 16 diamond drill ("DD") holes totalling 1,600 metres up to a depth of 112 metres have been drilled to delineate the oxide structure

-- All drill holes have intersected iron ore mineralisation

-- 1,880 metres in 21 trenches have been completed to map and identify the surface oxide

-- 2.7km(2) area showing oxide at surface has been mapped

-- Phase 1 of the resource development programme, utilising reverse circulation ("RC") drilling, will focus on 0.7km(2) of the initial 2.7km(2) is in progress

-- 15 of the 112 hole Phase I RC drilling programme have been completed delivering 1,510 metres

-- Phase II of the RC drilling programme will infill the Phase I drilling profiles and consists of 117 drill holes.

-- Trench, DD and RC samples will be flown to laboratories in China and Australia for analysis

-- Three additional diamond drill rigs have been purchased and are due on site in July 2011 to increase the rate of development.

All drill holes have intersected oxide showing a surface oxide iron layer of between 8 and 33 metres with iron enriched schist at depths of up to 112 metres. In addition, mapping and drilling to date has shown multiple parallel oxide zones extending to the depth of drilling across the mapped 2.7km(2) initial target area. Phase III resource development will focus on the remainder of the 2.7km(2) initial target with results expected in late Q4 2011.

Road Development

The road route from Yomboyeli to the port site has been surveyed. The 76km route comprises 20km of new road required to bypass villages, and 56 km of existing road. The existing road upgrade and new road construction to support the bulk ore road trains will be done in four sections.

Approval has been granted to start construction on the section of road from Konta (port location) to the Woulla village (section 1) near the tarred main road, approximately 22 km. Bellzone has contracted Entreprise Generale des Travaux et Transports ("EGTT") and the work has commenced. The scope of work includes:

-- Road widening to support road trains

-- Road base upgrades

-- Culvert construction and upgrades

-- Road signage

The route optimisation and environmental impact assessment on the two sections between Woulla village and Moussayah are due for completion in July 2011.

The request for approval to start construction on section 4 between Yomboyeli / Moussayah, approximately 33 km, has been submitted to the Government and approval is expected within the next few weeks after which construction will begin.

Tender packages have been issued to contractors and awarding of the tenders is scheduled for July 2011.

Konta Port Development

The survey, study and engineering design contract was awarded to China Communication Construction Company's ("CCCC") Second Harbour Consultants Co. in January 2011 for the stockyard and barge loading facilities at Konta. CCCC have completed the following work:

-- 73 holes drilled to assess marine and land geotechnical conditions

-- Marine and land based topographic mapping complete

-- Tides, climate and water flow assessments (in progress, due for completion shortly)

-- Stockyard and barge loading layouts

-- Preliminary cost estimates.

The CCCC will complete the stockyard and barge loading feasibility study which is scheduled for completion in July 2011.

Site acquisition and clearance is expected to commence in August 2011 on completion of the socio-economic and environmental impact assessment studies which are in progress.

Mine and Plant Development

The Bellzone and CIF mining team has completed:

-- Preliminary mine and plant production solutions. Mobile crushing and screening plants are planned to produce two iron ore products (lump and fine) and tenders have been prepared for issue to potential suppliers.

-- Preliminary mining fleet selected based on assumed mining requirements and initial resource data. Tenders have been prepared for issue to potential suppliers.

Key assumptions will be reviewed on completion of the Phase I resource classification which is expected in Q3 2011 and preliminary mine construction is expected to commence in July 2011 with environmental approval expected in Q3 2011.

Support infrastructure

The project support infrastructure has progressed significantly over the past two months. In addition to the establishment of a joint office in Beijing with CIF that will also accommodate Kalia related studies, the JV has established:

-- An office for the JV operating company, Forecariah Guinea Mining, in Conakry and located in same building as CIF and Bellzone

-- A 45 person camp at Yomboyeli to facilitate the resource development and early works

-- A core shed for geological logging and assessment of drill core and samples.

Nik Zuks, Chief Executive Officer, commented: "These are exciting times. I am very pleased with the progress achieved in a short time by our combined CIF and Bellzone team and with the strong support received from the Guinea government for both our major projects. The JV is working very well, project management is strong and everyone associated with the project is focussed on achieving production in Q1 2012. "

The mineral resource information disclosed in this announcement has been reviewed by Peter Batten, BAppSc, member of the Australasian Institute Mining and Metallurgy. He has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken, to qualify as a Competent Person for the purposes of this announcement.

 
 Enquiries: 
 
 Bellzone Mining plc 
 
 Nik Zuks/Graham Fyfe                  +61 (0) 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 
 
 Tavistock (UK) 
 
 Jos Simson/Paul Youens                +44 (0)20 7 9203 150 / +44 (0)7899 
                                        870 450 
 
 PPR (Australia) 
 David Ikin                            +61 (0) 8 9388 0944 / +61 (0) 
                                        408 438 772 
 
 

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.

Kalia Mine

The Company's flagship project, the Kalia Mine, has a magnetite JORC resource of 3.74 billion tonnes, located on the Kalia I prospect and an initial oxide JORC resource producing 43 million tonnes of 58% product from just 4.3% of the 55km(2) of the mapped surface oxides on the Kalia permit. Drilling results and internal estimates indicate that the Kalia Prospect has the potential to host more than 10 billion tonnes of magnetite and 2 billion tonnes of oxide.

Bellzone plans to develop the Kalia Mine in two stages;

-- commencing with a 20mtpa oxide production facility in 2014 and a 10mtpa magnetite concentrator in 2015,

-- stage two increases oxide output to 30mtpa in 2017 and doubles the concentrate output to 20mtpa in 2018.

CIF - Project, Financing & Infrastructure Partner

Bellzone has a Definitive Agreement ("the Agreement") with China International Fund Limited ("CIF"). The Agreement gives CIF right of first refusal to purchase Kalia' s production at market rates and CIF commits to providing Bellzone commercially related funding for the development of the Kalia Mine Project.

The Agreement contains CIF's commitment to fund and build a commercially operated rail and port infrastructure that will enable Bellzone to export production from Kalia. The infrastructure is being developed by Kalia Horizon Minerals Pte Limited that is 90% owned by CIF with Bellzone having a 10% carried interest. The Agreement provides for Bellzone to be the lowest cost user with permanent priority access.

Forecariah JV

In addition to the Kalia Mine Project, Bellzone and CIF have fully funded a joint venture to undertake the accelerated exploration and development programme at CIF's Forecariah iron permits that lie between 30 and 80 kms from the Guinea coast.

Production will start in Q1 2012 and will target an initial production rate of 3-4 mtpa of oxide ore ramping to a rate of 10 mtpa in 2013.

This information is provided by RNS

The company news service from the London Stock Exchange

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