BZM Bellzone

TIDMBZM

RNS Number : 6641J

Bellzone Mining PLC

04 July 2011

4 July 2011 - 7:00 am

Bellzone Mining plc

("Bellzone" or the "Company")

Kalia Rail and Port Infrastructure Update

-- Submission of infrastructure feasibility studies to Guinea Government on track for Q4 2011

-- Government infrastructure steering committee is involved with Kalia infrastructure team to facilitate progress and approvals.

-- The first 74km of 286km rail route submitted and agreed in principle by the Government

-- China Construction and Communication Company ("CCCC") appointed in December 2010 to conduct the Matakan port studies

-- China Rail Eryuan Engineering Company ("CREEC") appointed in December 2010 to conduct the Kalia rail studies

-- Design options for the port layout at Matakan have been completed and are due to be reviewed by Bellzone and CIF early July 2011.

-- SEIA and EIA infrastructure studies on track for completion in Q4 2011

-- Geotechnical surveys on rail route under way

-- Rail and Port infrastructure detailed feasibility studies on track for Q4 2011

Bellzone Mining plc (AIM:BZM), the iron ore company developing the Kalia Mine Project and the Forecariah JV in the Republic of Guinea, West Africa, is pleased to announce a progress update for the associated Kalia Mine Project Rail and Port infrastructure.

The infrastructure project is owned and managed by Kalia Horizon Minerals Pte ("KHM"), the 90:10 joint venture ("JV") company established by China International Fund Limited ("CIF") and Bellzone respectively. As per the definitive agreements signed with CIF in August 2010, CIF have agreed to fund and develop the multi-user infrastructure required to support the export of iron ore from the Kalia Mine Project and other projects that will be developed in the area.

General Progress

-- Socioeconomic ("SEIA") and Environmental Impact Assessment studies ("EIA") awarded in December 2010 are progressing well and are due for completion in Q4 2011.

-- Government infrastructure steering committee is involved with the infrastructure team to facilitate progress and approvals.

-- A Project Management office has been established in Beijing to oversee and coordinate Rail and Port activities. The primary role will be to ensure committed targets are met and to undertake and manage procurement and manufacturing activities.

Port Progress

-- Design options for the port layout at Matakan have been completed and are due to be reviewed by Bellzone and CIF early July 2011. The preferred option will then be used as the basis of the detailed feasibility study report, due for completion in Q4 2011.

-- Bathymetric surveys are 100% complete and cover an area of 570 Km(2) . This data has been used in the selection of final berthing location options.

-- Oceanographic and Meteorological surveys are approximately 80% complete. Final data is currently being collected to cover the rainy season (June - October) which will complete this work but will not impact timing of the selection of the preferred option.

-- Marine and land survey work has commenced and is on schedule to be completed in Q4 2011. Early studies include the installation of survey control points and some shallow water drilling.

Rail Progress

-- Route of the first 74km of the railway from the proposed port at Matakan to Moussaya has been agreed in principle with the Government.

-- Rail route geotechnical drilling and surveys have started on this section.

-- This alignment is within the agreed Bellzone exclusive rail corridor and will be the first section to commence construction.

-- An aerial survey has been completed using LiDAR technology to identify the topography in this area.

-- Aerial photography was also included in the survey to assist in the final designs and will support the SEIA and EIA studies.

-- Option studies on the rail route from Moussaya to Kalia have been completed and the preferred option route has been approved in principal by the Government.

-- Final optimisation to minimise construction times and overall costs is in progress.

-- Rolling stock assessment is currently in progress.

-- The detailed rail feasibility study report is expected to be completed in Q4 2011.

In 2008, Bellzone completed a scoping study that identified the Matakan site as the preferred port site for the Kalia Mine Project. The site was selected given its relatively easy access to deep water and its capacity to support multi-user capacity expansions required for other potential operations that will start in Guinea. Bellzone completed a feasibility study in 2010 which identified and demarcated a rail route and port solution at Matakan to support the Kalia Mine Project.

As previously announced on 2 September 2010, the Government of Guinea decreed a Protocol d'Accord ("Accord") which provided Bellzone with the exclusive rights to develop an infrastructure solution in a specified rail corridor from the Kalia Mine site to the preferred port location of Matakan. As per the definitive agreements signed with CIF in August 2010, CIF have agreed to fund and develop the multi-user infrastructure required to support the export of iron ore from the Kalia Mine Project and other projects that will be developed in the area through the KHM JV. CIF committed $40million to fund the feasibility studies for the rail and port. CCCC and CREEC were appointed to undertake the port and rail studies respectively. SGS Environmental was appointed to conduct the SEIA and EIA for the approved infrastructure corridor. Currently CCCC have a project team of 17 people and CREEC a team of 30 people currently in Guinea on the infrastructure project.

As per the conditions of the Accord, the Government has committed resources from the Department of Transport and the Department of Environment to work with KHM to assist in the development of the infrastructure studies and to facilitate the Government approval process required for the issue of the Build Own Transfer ("BOT") license as stated in the Accord.

Bryan Pearce, Bellzone's Director of Projects, commented: "We are very pleased with the quantity and quality of work completed to date and in such a short time on the Kalia Rail and Port project. This has established the necessary building blocks that will allow the smooth transition from feasibility study into project execution. This will be evident during the start of the construction work planned for early 2012. With the establishment of the integrated Beijing office to coordinate and manage the project development and procurement processes the structure is in place to execute what is expected to be a very successful project. "

 
 Enquiries: 
 
 Bellzone Mining plc 
 
 Graham Fyfe / Terry Larkan            +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 Project, has a Company estimated magnetite resource potential of 6.4 billion tonnes, which includes a 3.74 billion tonnes JORC resource, 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 Mine Project 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 Project 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 the Kalia Mine Project'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 Mine Project. 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 is on schedule to start in Q1 2012 at the Yomboyeli target with an initial production rate of 3-4 mtpa of oxide ore, ramping to a rate of 10 mtpa in 2013. Resource development is underway, with all drill holes intersecting oxide mineralisation. A surface oxide cap of between 8m and 33m has been identified by the drilling programme. The ore will be transported 75km by bulk ore road trains to a transshipping port at Konta, on the south coast of Guinea. From the port loadout facilities the ore will be barged to deep water prior to loading onto bulk sea carriers. Construction on the first 24km of road from the port location of Konta has started. Construction on the port is due to start in August 2011.

This information is provided by RNS

The company news service from the London Stock Exchange

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