Bellzone Mining (LSE:BZM)
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RNS Number : 8644K

Bellzone Mining PLC

22 July 2011

22 July 2011

Bellzone Mining plc

("Bellzone" or the "Company")

AGM

-- Project on schedule to achieve production Q1 2012

-- Phase I Company (tonnage) estimates on track for July 2011 announcement

-- Port feasibility study reviewed and budget submission due end July 2011

-- Negotiations underway for tugs and barges

-- Negotiations with haulage fleet suppliers

-- First 24km of road construction progressing to schedule

-- Second road construction contract for 14.6km awarded and contractors mobilised to site

-- Large oxide potential at Santiguiyah identified

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

Yomboyeli

Bellzone will announce an internal volumetric and estimated tonnage in July 2011 with an internal resource classification expected in Q3 2011. Additional drilling resources have been secured to accelerate the resource development programme. These include;

-- The three additional diamond drill rigs that have been purchased and are confirmed due on site in July 2011.

-- An additional RC rig is now on site to expedite the drilling programme.

-- Drill samples have arrived at the independent laboratory in Perth for processing.

Ongoing exploration and mapping has identified additional prospective targets of oxide and magnetite that are outside the currently mapped 2.7km(2) oxide area which is under development.

Santiguiyah

As announced in January 2011, a large prospective oxide potential was mapped in the Santiguiyah area 15 km north of Yomboyeli. Recently completed petrography, bench scale test work and an optimistic review from an independent technical expert indicate has led to detailed metallurgical test work on the oxide material to commence on a bulk sample at the independent laboratory in Perth.

A shallow drilling program will commence as soon as possible to define the resource. The vast area of the Santiguiyah oxide could prove to be a significant value add to the Forecariah resource base potential.

Road Development

The 76km road 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.

China Communication Construction Company's ("CCCC") have been awarded a construction management contract to provide construction management, cost control and schedule management support and expertise to the road development project. The CCCC team will support the BZM management team in achieving the project objectives.

Construction of the 24km section of road from Konta (port location) to the Woula village commenced in June 2011 by Entreprise Generale des Travaux et Transports ("EGTT"), a Guinean contractor. 12.2km of road has been cleared and grubbed, borrow pits for road base have been established and road base work has started.

Approval to start construction on the 14.6km section between Yomboyeli and Dambaya has been received. SAMACO BTP ("SAMACO"), a Guinean contractor has been awarded the works and is mobilising to site. Construction has commenced with grubbing and clearing. Approvals and tendering for the remaining sections of road are in progress with all construction expected to be awarded and underway in August.

The tender details for a LiDar study for the site and the pathway to the proposed rail connection, to replace the haul road as the Kalia rail is commissioned, has been prepared and issued.

Konta Port Development

CCCC Second Harbour Consultants Co. have completed and issued the draft feasibility study. This has been reviewed and final estimates and schedules will be completed as planned by the end of July 2011 for Board submission and approval.

Negotiations to appoint an engineering specialist, for the role as the Port Engineering Procurement Construction and Management ("EPCM") consultant, have been completed. Contracts are expected to be finalised by end of July 2011.

Approval to start site acquisition and clearance has been submitted and is expected to commence in August 2011.

The tugs and barges required for the trans-shipping operation have been sourced and commercial negotiations have commenced. Marine inspection of the vessels will take place by month end.

Mine and Plant Development

The Bellzone and CIF mining team has completed:

-- Plant layouts and flowsheet have been finalised.

-- Tenders for the crushing and screening plant have been prepared and issued to four potential suppliers and final negotiations are underway with the preferred vendor, with contracts expected to be placed before the end of July.

-- Discussions are in progress with experienced and reputable EPCM provider to develop and install the mine and the process facilities. Detailed proposal expected by end of July 2011.

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

-- Suppliers for initial haulage truck fleet identified and evaluation in progress. Delivery lead times between 30 days to 8 weeks. Contract expected to be awarded shortly.

-- Key assumptions are being reviewed by a consulting organisation as data becomes available.

Support infrastructure

The project support infrastructure continues to progress. In addition to the facilities announced last month, the JV has:

-- Established a Forecariah and Yomboyeli site office, with internet and network connectivity.

-- Completed accommodation for an additional 14 people.

-- Paid compensation to landowners for exploration and survey access.

Nik Zuks, Chief Executive Officer, commented: "The progress made reiterates how well the JV team is working and the strong support being received from the Guinea government. Our commitment to production in Q1 2012 remains the common goal and our schedule remains on track. I am looking forward to providing regular updates on this fast developing project."

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/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 7920 3150 
 
 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 76km by bulk ore road trains to a transhipping 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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