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Bellzone Mining PLC (BZM)

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Tuesday 25 January, 2011

Bellzone Mining PLC

Reported changes to Guinea re

RNS Number : 0284A
Bellzone Mining PLC
25 January 2011
 



 

               

25 January 2011

Bellzone Mining plc

("Bellzone", the "Investor" or the "Company")

Reported changes to Guinea participation in resource companies

 

Bellzone Mining plc (AIM:BZM), the iron ore and nickel/copper company developing the Kalia Iron Mine and Forecariah Joint Venture in the Republic of Guinea, West Africa, reports that it has not had any notification and does not have any information to indicate that it will be subject to the alleged proposed changes, as reported in some press, pertaining to the government of Guinea's approach to participation in resource companies.

 

Bellzone has a Mining Convention (the "Convention") for its Kalia Mine (the "Mine" or "Project") and associated infrastructure that was approved and signed by the Guinean Minister of Mines and Geology and the Guinean Minister of Economy and Finance on the 26th of July 2010.  As per the statutory process the Convention was passed into Guinea law through a Presidential Decree signed on the 31st of August 2010.

 

Nik Zuks, Managing Director, commented: "It is important to note that our Convention has been decreed and is subject to an economic stabilisation agreement.  We believe that our Convention is fair and provides an equitable split of economic benefits to Guinea and our investors. 

 

With any change in government it can be expected that there will be a review of revenues and expenditures and operator adherence to their licence conditions.  It is reasonable that the new government will look to review and streamline existing revenue collection processes and systems."

 

The Convention is based on Guinea's well established Mining Code and contains provisions that exceed the minimum conditions contained in the Code to ensure an equitable sharing between the Company and Guinea of the economic and social benefits associated with the Kalia Mine.  The Convention is subject to an economic stabilisation clause that exempts Bellzone from increases that may be promulgated, but allows the Company to apply for benefits that may become available through subsequent changes.

 

 

 

Enquiries:

 Bellzone Mining plc

Nik Zuks

Raj Kandiah

 

+61 439 420 893              

 

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          

+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 Iron Mine has a JORC resource of 3.74 billion tonnes, located on the Kalia I prospect. Drilling results and internal estimates indicate that Kalia Prospect has the potential to host more than 10 billion tonnes of magnetite and 2.55 billion tonnes of oxide at surface.

 

Exploration work continues to further define the potential at Kalia I on both the magnetite and oxide at surface.

 

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 online 20mtpa direct shipping ore ('DSO') capacity in 2014 and a 10mtpa magnetite concentrator in 2015. Stage two increasing the DSO 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 ('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.

 

An exploration programme is currently underway at the CIF held Forecariah Iron Permits that lie between 40 and 80kms from the Guinea coast.  Bellzone and CIF will jointly develop these permits which are prospective for oxide and magnetite.  The oxide has the potential to deliver cash flow from a Direct Shipping Ore project in the short term.

 

Bellzone has competed an intensive mapping and surface sampling programme and has defined highly prospective drilling targets at its Sadeka Nickel/Copper Project and commenced a drilling programme on these targets in Q4 2010.

 


This information is provided by RNS
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