Bellzone Mining (LSE:BZM)
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RNS Number : 4750N

Bellzone Mining PLC

02 September 2011

2 September 2011

Bellzone Mining plc

("Bellzone" or the "Company")

Forecariah JV Progress Update

-- Project remains on schedule to achieve production Q1 2012

-- Internal resource estimates on track for September 2011 announcement

-- Port feasibility study completed

-- Contract for port EPCM awarded

-- Haulage truck fleet purchased

-- Mine crush and screen plant purchased

-- Mine earth moving fleet and vehicles purchased

-- Mine haul trucks purchased

-- Mine accommodation village purchased

-- Clearing and grubbing of road to port completed

-- Borrow pits for road base opened and layering to commence in September

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

Resource Development

As announced on 1 August 2011, Bellzone delineated an initial iron oxide cap volume of 8 million m(3) at the Yomboyeli site. Bulk density readings ranging from 2.6t/m(3) through 3.9t/m(3) have been obtained from the oxide material in this area and first production will target the 2 million m(3) of higher tenor material identified within the larger oxide cap.

The initial volume is based on drilling over 1.0km(2) of the 2.7km(2) of mapped oxide at surface and ongoing exploration and mapping has identified additional prospective targets of oxide and magnetite that are outside the currently mapped 2.7km(2) oxide that is under development.

The iron oxide cap in the mapped 2.7km(2) area is a product of the Marampa beds. The Marampa beds extend from within Sierra Leone to 8km NNW of Yomboyeli. Of the 8km strike of the prospective Marampa Beds within the JV, only the Yomboyeli and Yaneyah prospects have been subjected to any degree of exploration. Beneath the oxide cap layer, drilling has identified parallel zones of iron schists in the Marampa beds.

Two reverse circulation ("RC") rigs are currently conducting infill drilling of the Yomboyeli ridge. One rig will switch in approximately two weeks to a program extending the oxide package. A third RC drill rig has arrived on site and is being operationally commissioned.

The infill drilling programme through the initial 1km(2) target has been completed and assays are being processed in Perth. The programme is on track to provide resource information in September which will allow detailed mine planning and production scheduling to be undertaken in October this year.

Work done on the resource development to date includes:

-- 50 diamond drill ("DD") holes totalling 5,558 metres have been drilled to depths of 250m

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

-- Trench profiles have been completed and initial assay grades have identified additional high grade target areas

-- 68 holes of RC drilling have been completed delivering 7,516m metres

Road Development

The 76km road route comprises 20km of new road required to bypass small villages, and 56 km of existing road. The existing road upgrade and new road construction to support the bulk ore road trains will being done in five sections that will each be covered under contracts. All sections have had contracts awarded to Guinea based contractors for the grub and clear work which is now complete. Construction contracts for three sections have been awarded to Guinean contractors and the contracts for the remaining two sections are under final negotiation with awarded expected shortly.

The clearing and grubbing activities scheduled during the wet season has been completed. Currently borrow pits and construction preparation is underway with road base layering expected to start in week 2 of September. The road development is on track for completion to allow trucking of ore in February 2012 as per schedule.

The contract to conduct a LiDar study to define the topography for the site and the pathway to the proposed rail connection, to replace the haul road as the rail is commissioned, has been awarded to the global specialist Fugro and is due for completion in Q4 2011.

Konta Port Development

China Communications and Construction Company ("CCCC") and Second Harbour Consultants Co have completed the port feasibility study. The study has been issued to the Government and work will commence once approval has been received.

Port EPCM contracts have been awarded to CCCC and detailed engineering and procurement activities are in progress.

Approval to start land acquisition and clearance has been submitted to the Government and is expected to commence in September 2011.

The marine fleet required for the trans-shipping operation have been sourced and commercial negotiations have commenced along with vessel marine inspection.

Mine and Plant Development

The Bellzone and CIF mining team have completed the mining and processing feasibility study and key long lead items have been purchased, which include:

-- The crushing and screening plant

-- The road haulage truck fleet

-- Mining haulage fleet

-- Earthmoving equipment

-- Accommodation camp

-- Drill and blasting equipment

A vessel has been chartered, leaving China in early October, to deliver the purchased equipment and plant to Guinea.

Nik Zuks, Chief Executive Officer, commented: "Progress continues at a fast pace with several key long lead items purchased and clearing of the route to port complete ensuring we remain on schedule and on budget. Recent investors who visited the site were able to see what has been achieved since January 2011 and the pace of development continues to increase.

During my recent discussion with His Excellency, the President of Guinea, Alpha Conde, our commitment to deliver this project in Q1 2012 was well received and supported. There is no doubt of the significance of this project in terms of the development of the iron ore sector in Guinea and the growing importance of West Africa as an iron ore province on the global stage."

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 
 
 Jeremy Wrathall 
 
 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 
 
 

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 3.74 billion tonne JORC resource and an initial oxide JORC resource producing 43 million tonnes of 58% product from just 4.2% 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 tonne of magnetite and 2 billion tonne 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 also 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 kilometres from the Guinea coast. Production is scheduled to start in Q1 2012 with an initial production rate of 3-4 mtpa of oxide ore, ramping to a rate of 10 mtpa in 2013.

Other activities

Bellzone has completed a mapping and surface sampling programme identifying highly prospective targets at its Sadeka Nickel/Copper Project. A VTEM aerial survey is currently being conducted to further define areas for a targeted drilling programme.

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.

This information is provided by RNS

The company news service from the London Stock Exchange

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