For riah JV Progress Update (3496W)

TIDMBZM

RNS Number : 3496W

Bellzone Mining PLC

30 January 2012

30 January 2012

Bellzone Mining plc

("Bellzone" or "the Company")

Forecariah JV Progress Update

   --     On site commissioning of mine and process plant equipment 
   --     Road construction on schedule for haulage in Q1 2012 
   --     Port development remains on track 
   --     Majority of marine fleet en route to Guinea 
   --     Applications submitted for approvals and permitting 
   --      Project remains on schedule to begin production in Q1 2012 

Bellzone Mining plc (AIM:BZM) is pleased to provide a progress update on the Forecariah JV Project ("the JV") in the Republic of Guinea, West Africa, which remains on schedule to begin production and stockpiling of iron ore in Q1 of 2012.

Mine and Plant Development

The mining, processing and road hauling equipment are all under commissioning at site and will be used in production from Yomboyeli.

The first phase of the operations accommodation camp has been completed and construction of the heavy and light vehicle workshops is expected to be completed in February.

Explosives permits and contracts are complete with the first test blast scheduled to take place in February 2012.

Key operations staff are in place ahead of full commissioning.

Road Development

Road access to the under construction haul road is available for limited traffic access and the training of truck drivers and trial trucking runs on the haul road has commenced.

In addition, truck workshops and warehousing is under construction and the fuel contract to support the operations is currently being negotiated.

The road development remains on schedule to permit sustained ore haulage in February 2012.

Konta Port Development

China Communications and Construction Company ("CCCC") and Second Harbour Consultants Co have commenced construction of the Konta port. Development of the port remains on schedule to be able to commence loading and export of product in Q1 2012. Progress to date includes:

   --     Dredging of the channels and barge berths is progressing and is on schedule 
   --     The construction camp has been installed and is operational 
   --     Barge mooring pilings are under construction and on schedule 
   --     The stockpile yard and port buildings are all under construction and on track 

-- The second CCCC shipment of equipment containing the fuel storage, office blocks and power plant is en-route to Guinea and is expected to arrive in early February 2012

-- The last ship of fabricated items, including platework, gantries and conveyors for the port has departed China and is expected in Guinea in February 2012.

   --     Ore storage pad at the port has been completed 

Marine Operations

Panamax, Harbour Tugs, Pilot Vessel

The harbour tugs and the pilot vessel are en-route to Guinea and, following completion of the fitting of conveyors, the Panamax vessel will shortly sail to Guinea. The fleet is expected to arrive in March 2012.

Trans-shipping Contract

Cathay Offshore have mobilised from Singapore and their staff and equipment, including 3 barges and 2 tugs, will arrive in Guinea in February 2012. Cathay Offshore will supply and manage the operation of all vessels and equipment from port out-load to export vessel loading.

Resource Development

The initial internal resource development and mine planning work has focussed on defining sufficient product to support the first year of production. This was achieved through the definition of 2mt of iron oxide cap grading at +55%Fe producing a crush and screen product of 58%Fe.

Further testwork, flowsheet development and costing is underway to validate the gravity beneficiation process that to produce 58%Fe product from the internally estimated 19.1mt (5.9mt at 45.7%Fe and 13.2mt at 34%Fe) of lower grade surface oxide material at Yomboyeli Central and results are expected in Q2 2012.

Assay results and model refinement of the initial internal resource estimate of 125mt of haematite schist has increased it to 136mt at an estimated average grade of 24%Fe. This is estimated to provide 32.43mt of contained iron or an estimated 45mt of 58%Fe product based on preliminary test results. Initial drilling to depths of 145m indicated the haematite schist was open at depth. A drillhole, from the current deep hole programme, completed on the 26 January (FCDD0270) has intersected the footwall at 311m downhole, confirming the haematite schist extends to at least 260m below the surface.

The ongoing testwork programme on the haematite schist has indicated that a +58% product can be achieved from the average estimated in-situ grade of 24% Fe through a grinding and low intensity magnetic separation ("LIMS") process. Ongoing testwork and flowsheet development will define the optimal processing solution, capital cost and recovery expectations of a facility that will produce a saleable product. Results are expected in Q2 2012.

The first stage of the 30,000m reverse circulation ("RC"), wide space drilling programme at Yomboyeli West has been completed. The 12,000m drilled to date has confirmed an oxide cap overlaying haematite schist. It is anticipated that this cap will add to the Forecariah internal oxide resource at Yomboyeli Central. In addition, a 100m wide and approximately 1.2km long haematite schist zone has been intersected. The ongoing RC drilling programme will continue to drill the Yomboyeli West and North strike extensions and infill the wide space drilling pattern so as to able to delineate a mineable reserve/resource. Modelling and assay assessment are ongoing and an internal resource for this area is expected in Q2, 2012.

Wide spaced drilling commenced on the Laya Prospect on 26 January 2012, the Laya Prospect is situated 2.6km along strike to the North of the Yomboyeli Central resource.

Approvals and Permits

Government approvals have been granted to conduct the construction and installation activities at the port, road and mine site.

The Forecariah mine and Konta port feasibility studies and the Social Economic Impact and Environmental Impact study documentation have been submitted to the Department of Mines and Geology ("the DMG"). The DMG has established a Commission whose specific task is to assess the Project and provide approvals. The JV management team and Guinea Development Corporate ("GDC") representatives continue to work closely with the DMG and the Commission to expedite the required Mining approvals and licensing documentation.

Nik Zuks, Chief Executive Officer of Bellzone, commented: "We continue to meet our construction and commissioning schedule and subject to approvals will see the project in a position to start production in Q1 2012. We are making significant efforts to secure the requisite permits and licences necessary to export production and look forward to bringing online what will be Guinea's first commercial iron ore mine."

The tonnage estimation, drill results and metallurgy information disclosed in this announcement has been reviewed by Bernhard Neehoff BSc. Post Grad Dip Sc.; a member of the Australasian Institute of Mining and Metallurgy and employed as Bellzone's Exploration Manager. 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 qualified person for the purposes of this announcement.

Enquiries:

Bellzone Mining plc

Terry Larkan/Graham Fyfe [phone]

Canaccord Genuity Limited

Nominated Adviser and Joint Broker to Bellzone [phone]

Andrew Chubb/Tarica Mpinga

Renaissance Capital Limited

Joint Broker to Bellzone [phone]

Rob Edwards

Tavistock (UK)

Jos Simson/Paul Youens [phone] / [phone]

PPR (Australia)

David Ikin

[phone] / [phone]

About 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, is planned to commence production in 2014 and be producing iron ore and iron ore concentrate at a rate of 50 million tonnes per annum in 2018. The Kalia Mine Project has a 6.16 billion tonnes magnetite JORC resource and an oxide JORC resource of 193 million tonnes. A Supergene BIF JORC resource of 92.5 million tonnes at 36.5% Fe has been delineated and shows the potential to upgrade to produce 37 million tonnes of 63% Fe material. The oxide and Supergene BIF resources have been established from just 10.5% 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.

CIF - Project, Financing & Infrastructure Partner

Bellzone has a Definitive Agreement ("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 commercially operated rail and port infrastructure that will enable Bellzone to export production from the Kalia Mine Project. The infrastructure is being developed by Kalia Horizon Minerals Pte Limited, an entity 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

Bellzone and CIF have committed to fully fund the initial production and infrastructure of a joint venture to undertake the accelerated exploration and development programme on Guinea Development Corporation 's ("GDC"), a subsidiary of CIF, Forecariah iron permits that lie between 30 and 80 kilometres from the Guinea coast. Production is scheduled to start in Q1 2012, based on an internal resource estimate of 146 million tonnes of oxide, with an initial production rate of 3-4 mtpa.

Other activities

Bellzone has completed a mapping and surface sampling programme identifying highly prospective targets at its Sadeka Nickel/Copper Project. The VTEM aerial survey has been completed and highly prospective targets have been identified and will form the basis of the 2012 drilling programme due to commence in December 2011.

Bellzone has acquired the rights to buy 70% of Compagnie Miniere de L'Ouest Africain SA, incorporated and holding tenements in Mali. The company is undertaking geological studies on the tenements which are prospective for iron ore before making an investment decision.

About China Sonangol and China International Fund Limited ("CS Group")

CS Group is headquartered in Hong Kong Special Administrative Region of China, and has investment footprints in 3 continents and more than 20 countries.

The primary activities of CS Group is in oil, gas and mineral exploration and production, commodities trading and is also globally active in real estate and infrastructure development, where in particular, through China International Fund, it has participated in the rehabilitation and development of new and existing transport infrastructure in Angola such as New Luanda International Airport, where it is envisioned to be a major airport hub West Africa. Additionally, on its railway experience, CIF rehabilitated almost 3,600 kilometres of railway in Angola. CIF has also constructed 3 logistics base in Angola where in total occupies 925,000m2, as the logistical backbone to support its infrastructure and industrial implementation and development programme, consisting cement and brick production plants, sand and stone quarries, as well as production of industrial materials such as steel sheets and plastic pipes.

With the strengths of its experience in large scale infrastructure development in Africa, CS group is in the position to accelerate the iron ore exploration and production with its Joint Venture partner Bellzone Mining PLC.

CS Group has a vision for Africa. This vision is, through South-South cooperation, where in partnership with private industry and with the government, CS Group will develop public transport infrastructure such as road, rail, seaports and airports to improve connectivity and accessibility, as well as public utilities, agriculture, aqua culture, public housing, construction materials, mining and oil and gas projects, where its commercial objectives are aligned with the needs of countries to develop the economy and improve, ultimately, the living standards of the people.

This information is provided by RNS

The company news service from the London Stock Exchange

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