Bellzone Mining Regulatory News (BZM)

4.36 p.m. - Tuesday 1 March 2011

Bellzone Mining plc

("Bellzone" or the "Company")

THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR NEW ZEALAND OR ANY JURISDICTION IN WHICH SUCH PUBLICATION RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL

CIF strategic investment of approximately US$100 million and proposed fundraising to raise up to a further US$100 million

Highlights:

·; China International Fund Limited ("CIF") agrees to invest circa. US$100 million (£63.2 m million) in Bellzone by way of private placement at 80 pence per share (the "CIF Subscription")

·; Bellzone to raise up to an additional US$100 million through a placing of new shares with institutional and other investors (the "Institutional Placing")

·; Canaccord Genuity has underwritten US$50 million of the Institutional Placing

·; Certain major shareholders and other investors have already indicated their support for the Institutional Placing

·; Target 3-4 mtpa of production from Forécariah by Q1 2012 transforms Bellzone into near term producer

·; Placing ensures that Bellzone's contribution to Forécariah is fully funded to production

·; Kalia development continues to provide medium term large scale production expansion

·; Placing to fund Bellzone's share of the development of the Forécariah iron ore project in conjunction with its joint venture partner CIF and to advance certain aspects of its Kalia iron ore project

Bellzone Mining plc (AIM: BZM), the iron ore and nickel/copper company operating in West Africa, is pleased to announce that CIF has today signed a definitive subscription agreement (the "CIF Subscription Agreement") with Bellzone pursuant to which CIF has agreed to subscribe for 79,000,000 ordinary shares ("Ordinary Shares") in the capital of the Company ("CIF Shares") at 80 pence per share to raise gross proceeds of £63.2 million (approximately US$100m). In addition, Bellzone is to raise gross proceeds of up to US$100 million through the issue of new ordinary shares (the "Institutional Placing Shares") by way of the Institutional Placingwith both new and existing institutional shareholders (the "Institutional Placing Shares") which is being conducted, subject to the satisfaction of certain conditions, through an accelerated book-building process to be carried out by Canaccord Genuity Limited ("Canaccord Genuity"), acting as lead manager and sole bookrunner (the "Bookrunner") in relation to the Institutional Placing. The identity of Placees and the basis of the allocations are at the sole discretion of the Company and the Bookrunner. The number of Institutional Placing Shares and the price at which the Institutional Placing Shares are to be placed (the "Placing Price") will be agreed by the Company with the Bookrunner at the close of the book-building process. Details of the number of Institutional Placing Shares and the Placing Price will be announced as soon as practicable after the close of the book-building process. Canaccord Genuity has agreed to underwrite US$50 million of the Institutional Placing at the Placing Price. Renaissance Capital Limited ("Renaissance") is acting as joint broker.

CIF Subscription detail

On completion of the CIF Subscription Agreement, CIF will acquire the CIF Shares for gross proceeds of £63.2 million (approximately US$100m). The funds from the CIF Subscription, together with the funds raised in the to be conducted Institutional Placing, will be used to fully fund Bellzone's portion of the planned capital expenditure of the Forécariah iron ore project in conjunction with its joint venture partner CIF and to advance certain aspects of its Kalia iron ore project.

The CIF Shares will be credited as fully paid and rank pari passu with the existing issued Ordinary Shares when issued.

Subject to receipt of the subscription proceeds, the Company will allot and issue the CIF Shares and apply for the CIF Shares to be admitted to trading on the AIM market of the London Stock Exchange ("AIM") and it is expected that admission of the CIF Shares will take place and that trading will commence in such shares at 8.00 a.m. on or about 7 March 2011.

Institutional Placing details

In addition to the CIF Subscription, Bellzone is undertaking an Institutional Placing. Up to US$50 million in value (by reference to the Placing Price) of the Institutional Placing Shares have been underwritten by Canaccord Genuity with the balance of the Institutional Placing Shares being placed by Canaccord Genuity and Renaissance on a reasonable endeavours basis.

The allotment of the Institutional Placing Shares will be conditional on, amongst other things, on the passing by shareholders of resolutions at an Extraordinary General Meeting ("EGM") proposed to be held on or around 21 March 2011, granting the Directors, inter alia, the authority necessary for the issue of the Institutional Placing Shares. The Company will, in due course, publish a circular to shareholders convening the EGM.

The books for the Institutional Placing will open with immediate effect. The books are expected to close no later than 6:30 p.m. (London) today. The timing of the closing of the books and the making of allocations may be accelerated or delayed at Canaccord Genuity's sole discretion. The Appendix to this announcement contains the detailed terms and conditions of the Institutional Placing.

By choosing to participate in the Institutional Placing and by making an oral and legally binding offer to acquire Institutional Placing Shares, investors will be deemed to have read and understood this announcement in its entirety, including the Appendix, and to be making such offer on the terms and subject to the conditions contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in the Appendix to this announcement.

The Institutional Placing Shares will be credited as fully paid and rank pari passu with the existing issued Ordinary Shares when issued.

The Company will, subject to approval of Shareholders at the EGM, apply for admission of the Institutional Placing Shares to trading on AIM and it is expected that admission of the Institutional Placing Shares will take place and that trading will commence in such shares on or about 22 March 2011 ("Admission") and in any event no later than 30 April 2011.

Settlement of the Institutional Placing Shares is expected to take place within the CREST system following each Admission.

Participation in the Institutional Placing will be limited to institutional investors and certain other 'Qualifying Persons' as defined in the Appendix to this announcement. Members of the general public are not eligible to take part in the Institutional Placing and may read it only for informational purposes.

The Appendix to this announcement contains the detailed terms and conditions of the Institutional Placing.

Operational progress

Forécariah

Further to the Company's announcements in relation to Forécariah on 31 January and 7 February 2011, Bellzone and CIF have agreed to implement an accelerated programme to target a 10 million tonnes per annum (mtpa) direct shipping ore ("DSO") iron ore operation, targeting initial production in Q1 2012.

The following activities have already occurred or are currently in progress:

·; Detailed agreement signed with CIF as announced on 2 August 2010

·; Company geological assessments in December 2010 and February 2011 completed

·; Multiple prospective oxide iron targets identified 

·; Surface samples from Yomboyeli return grades of up to 60% Fe, indicating DSO potential

·; Development budgets approved with CIF in January 2011

·; Bellzone appointed project manager of the Forécariah iron ore joint venture

·; Road route and port location selected January 2011

·; Road feasibility study awarded January 2011

·; Port feasibility study awarded February 2011

·; Initial trenching and sampling at Santiguiyah has been completed and samples sent to Perth for assay

·; Camp locations identified and camp sourced with construction scheduled for March 2011

·; Detailed drilling plan for Yomboyeli completed, an initial programme of 7,000 meters of RC drilling to commence in March

·; Preliminary flow-sheets options study underway

The following activities are planned up to Q1 2012:

·; Drilling programme

·; Preliminary mining and plant study

·; EIA and SEIA permitting for mine area

·; Complete feasibility study

·; Convention and concession award

·; Phase 1 resource classification

·; Mine and support infrastructure construction

·; Phase 2 resource classification

·; Production start - target January 2012

·; Road feasibility study

·; Protocl d'Accord award to secure transport rights

·; EIA and SEIA permitting

·; Road construction

·; Secure barges and support vessels

·; Port feasibility study

·; Construction of port and stockyards

·; Operational start - target February 2012

The development plan is focussed on defining and delivering sufficient iron oxide ore from the identified targets to support an initial production target rate of 3-4 mtpa of DSO in Q1 2012 which will provide the Company with associated cash flow while ramping up to the operations to a target rate of 10 mtpa by 2013. The operation is expected to consist of simple drill, blast, load and haul open pit mining, with product processing undertaken by modular mobile crushing and screening plants. Power will be supplied to the mine site by modular diesel generators and water will be drawn from nearby rivers under the proposed environmental management plan.

Due to the proximity to the coast of the Forécariah deposits (ranging from 40-80km), the costs of the associated infrastructure are relatively low for an iron ore project. Initial production will be transported to the port by 80t to 100t trucks. The Company will construct approximately 80km of road of which 75km of existing roads will be widened and upgraded- no bridges will be required. The port will consist of stockpiling areas and simple static conveyors for barge loading and the stockyards and conveyor locations have already been located near the village of Konta. Barges between 6,000t and 14,000t will be loaded at a sheet piled wharf and will be taken down river and out to the trans-shipping point by tugs. The bathometric survey contract has been awarded to assess the dredging requirement and to demarcate the channel required for the barge operation. The product will be loaded onto bulk ore carriers by either a fixed trans-shipping barge or by self loading Panamax style vessels. This temporary truck and trans-ship operation in from the location of Konta will be temporary until the main Kalia railway line and the Matakan port becomes operational in 2014. CIF has informed the Company that it could supply the tug assisted barges which would reduce the required capital expenditure. 

The road and port are readily and economically upgradeable to enable DSO product export and the Company estimates that total capital required for an owner operated operation will be approximately $300-350 million with Bellzone contributing 50%. The CIF Subscription and the Institutional Placing together ensure that Bellzone's contribution to Forécariah is fully funded to production. Operating and capital expenditure trade-off studies are underway to optimise expenditure through opportunities for contract mining and processing, contract trucking and the leasing of tugs. 

A focused geological programme has been planned to define the DSO potential at the Yomboyeli iron oxide target. In parallel with the drilling programme, ongoing mapping, trenching and sampling will be continued across the other target locations to further define and identify drilling targets to support the expansion plans. A remote sensing programme is planned to identify the magnetite potential on the lease area, which will be followed by targeted ground magnetic and a drilling campaign to define this potential.

Current Company estimates have production costs on an owner operated basis of $36/t pre 2014 and falling to $16/t post 2014. The Company currently estimates the capital expenditure breakdown at Forecariah to be as follows:

Kalia

Bellzone remains fully committed to the two stage development of the 50 mtpa Kalia mine:

1. Stage I will provide 30mtpa production capacity with production scheduled in 2014 of 20mtpa DSO and 10mtpa of magnetite concentrate in 2015.

2. Stage II increases the DSO output to 30mtpa in 2017 and doubles the concentrate capacity to 20mtpa in 2018.

The work at the 100% owned Bellzone Kalia mine continues on the expansion and upgrade of the 3.74 billion tonne JORC compliant magnetite resource already established over 6km of 19km of the Kalia I strike. The definitive feasibility studies are in progress with a number of engineering surveys underway. The SEIA and EIA studies are on track for completion in Q1 2011, after which the relevant approvals will be sought from the Government.

 As per the definitive agreements signed with CIF and announced on 2 August 2010, the Kalia infrastructure will be funded by CIF. The Company will retain a carried interest in the infrastructure holding company Kalia Horizon Minerals Pte Ltd. In addition to the fully funded infrastructure CIF have committed to offer the Company a finance package at market related terms for the development of the Kalia mine. 

As previously announced, Bellzone now has 670mt of measured and indicated magnetite at 27.7 per cent. Fe and is undertaking an infill drilling programme with an expected magnetite resource upgrade in Q3 2011. Drilling at Kalia II commenced in February 2011. The Company also has an internally estimated 2.55bt potential oxide resource at Kalia and its maiden oxide JORC resource classification is due in early Q2 2011 and the initial test results of the same are encouraging. 

Bellzone has been making encouraging progress on the definitive feasibility study ("DFS") at its Kalia project which is scheduled for completion in Q4 2011:

·; SEIA and EIA studies scheduled for completion Q2 2011

·; Consultants - TWP and Ausenco engaged

·; Magnetite bulk sample completed - validates 68% Fe concentrate

·; Mine engineering studies commenced with TWP

·; Process engineering commenced with Ausenco

·; Geotechnical studies commenced in Guinea

·; Hydrology and Hydrogeology studies awarded to Coffey

·; LiDAR survey commenced by Fugro

·; Rail and Port studies have now commenced with China Railway Engineering Corporation and China Communications Construction Company who have engineers in Guinea and have commenced on the ground survey work

Other Projects

Bellzone has completed a mapping and surface sampling programme identifying highly prospective targets at its Sadeka Nickel/Copper Project. A drilling programme on the identified target areas commenced in Q4 2010, with results expected in Q2 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.

Use of proceeds

Bellzone intends to use the proceeds of the CIF Subscription and Institutional Placing to:

·; Fund Bellzone's share of the Forecariah Mining SA Guinea subsidiary's annual operating costs

·; Fund Bellzone's share of the Forecariah Mine, road and port feasibility studies

·; Fully fund the targeted 3-4 mtpa mining operation at Forecariah

·; Fully fund the construction of the road and associated infrastructure that will support all Forecariah production

·; Fully fund the Konta port development, all marine vessels and support infrastructure that will support the transhipping operations

·; Provide acceleration capital for the Kalia development that will allow early works to commence on site and ordering of certain long lead items, which will support a rapid start to construction

·; Provide additional funds to allow the oxide and magnetite development at Kalia to be accelerated

Nik Zuks, Chief Executive Officer commented "We are delighted by the support that CIF has shown us through this subscription and we believe that this support, combined with the funding from the institutional placing will provide Bellzone with the platform to develop Forécariah in conjunction with CIF and move the Company from a developer into a near term iron ore producer. We are very excited about moving Bellzone into production and associated cashflow by the first quarter of 2012 which will also provide a positive impact on the development and funding strategies for the Kalia mine. "

Enquiries:

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 potential 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 third party use.

On 2 August 2010, Bellzone announced 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 and development programme is currently underway at the CIF held Forécariah 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 DSO project in 2012.

Bellzone has completed 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.

General

This announcement, including the appendices to it (together the "Announcement"), is not for release, publication or distribution, directly or indirectly, in or into the United States, Canada, Australia or Japan or any jurisdiction into which the same would be unlawful. This Announcement does not constitute and does not form a part of an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in the United States, Canada, Australia or Japan or any jurisdiction in which such an offer or solicitation is unlawful. The shares in the Company referred to in this Announcement (the "Institutional Placing Shares") have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "US Securities Act") or with any securities regulatory authority of any State or other jurisdiction of the United States, and the securities may not be offered, sold, pledged or otherwise transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and applicable state securities laws. Any offering to be made in or into the United States will be made to a limited number of "institutional accredited investors" ("IAIs")within the meaning of Rule 501(a) (1), (2), (3) or (7) of Regulation D under the US Securities Act who are also "qualified institutional buyers" ("QIBs") within the meaning of Rule 144A under the US Securities Act pursuant to an exemption from registration under the US Securities Act in a transaction not involving any public offering. The Institutional Placing Shares are being offered and sold outside the United States to non-U.S. persons, in accordance with Regulation S under the US Securities Act. There will be no public offer of securities in the United States. No money, securities or other consideration is being solicited and, if sent in response to the information herein, will not be accepted.

This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Canaccord Genuity, Renaissance or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Canaccord Genuity, which is authorised and regulated by the Financial Services Authority, is acting exclusively for the Company and no-one else in relation to the Institutional Placing and will not be responsible to any persons other than the Company for providing the protections afforded its clients for providing advice in relation to the Institutional Placing or in relation to the contents of this announcement or any other transaction, arrangement or matter referred to in it. 

Renaissance Capital Limited, which is authorised and regulated by the Financial Services Authority, is acting exclusively for the Company and no-one else in relation to the Institutional Placing and will not be responsible to any persons other than the Company for providing the protections afforded its clients for providing advice in relation to the Institutional Placing or in relation to the contents of this announcement or any other transaction, arrangement or matter referred to in it. 

The distribution of this Announcement or Institutional Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or Canaccord Genuity or Renaissance that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Canaccord Genuity and Renaissance to inform themselves about, and to observe, such restrictions.

The information in this Announcement shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would require preparation of further prospectuses or other offer documentation, or be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.

The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the US Securities Act or the applicable laws of other jurisdictions.

This Announcement is not a "prospectus" under the Companies (Jersey) Law 1991 (as amended). Therefore, this Announcement has not been prepared strictly in accordance with the requirements of the Companies (General Provisions) (Jersey) Order 2002 and the Company has not sought and does not intend to seek the consent of the Registrar of the Companies in Jersey, and the Registrar of Companies in Jersey has not given its consent, to the circulation of this Announcement.

Forward-looking statements

Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that would cause actual results or events to differ from current expectations, intentions or projections might include, amongst other things, changes in commodity prices, changes in equity markets, political risks, changes to regulations affecting the Company's activities, delays in obtaining or failure to obtain any required regulatory approval, failure of equipment, uncertainties relating to the availability and costs of financing needed in the future, the uncertainties involved in interpreting drilling results and other geological and engineering data delays in obtaining geological results and other risks associated with exploration, development and production. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this Announcement is subject to change without notice and neither the Company nor Canaccord Genuity nor Renaissance assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

NOTICE TO US RESIDENTS

THIS ANNOUNCEMENT MAY NOT BE DISTRIBUTED, TAKEN OR TRANSMITTED IN OR INTO THE UNITED STATES, ITS TERRITORIES OR POSSESSIONS AND ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS ANNOUNCEMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS NOTICE MAY RESULT IN A VIOLATION OF THE US SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES UNLESS SUCH PLACING SHARES ARE REGISTERED UNDER THE US SECURITIES ACT OR ARE OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND IN COMPLIANCE WITH STATE SECURITIES LAWS. THE PLACING SHARES ARE BEING OFFERED AND SOLD (i) OUTSIDE THE UNITED STATES TO NON-U.S. PERSONS PURSUANT TO REGULATION S AND (ii) INSIDE THE UNITED STATES TO IAIs WHO ARE ALSO QIBs.

PLACEES ARE NOTIFIED THAT, ALTHOUGH THE COMPANY HAS NOT MADE A DETERMINATION AS TO WHETHER IT IS A "PASSIVE FOREIGN INVESTMENT COMPANY" (A "PFIC") FOR U.S. FEDERAL INCOME TAX PURPOSES, THERE IS A SIGNIFICANT LIKELIHOOD THAT IT WILL BE CLASSIFIED AS A PFIC FOR U.S. FEDERAL INCOME TAX PURPOSES. AN INVESTMENT IN A PFIC MAY HAVE MATERIALLY ADVERSE U.S. FEDERAL INCOME TAX CONSEQUENCES TO A U.S. HOLDER (AS DEFINED BELOW), INCLUDING SUBJECTING THE U.S. HOLDER TO A GREATER TAX LIABILITY THAN MAY OTHERWISE APPLY AND SUBJECTING U.S. HOLDERS TO TAX ON AMOUNTS IN ADVANCE OF WHEN TAX WOULD OTHERWISE BE IMPOSED. A U.S. HOLDER GENERALLY MAY BE ABLE TO MAKE ELECTIONS TO AVOID CERTAIN OF THE ADVERSE U.S. FEDERAL INCOME TAX CONSEQUENCES DERIVED FROM THE PFIC REGIME, INCLUDING MAKING THE ''QUALIFIED ELECTING FUND'' (''QEF'') ELECTION OR THE ''MARK-TO-MARKET'' (''MARK-TO-MARKET'') ELECTION IN RESPECT OF AN INVESTMENT IN CERTAIN PFICS. THE COMPANY DOES NOT INTEND TO MAKE AVAILABLE TO U.S. HOLDERS OF ORDINARY SHARES THE INFORMATION THAT WOULD BE NECESSARY IN ORDER FOR SUCH PERSONS TO MAKE A QEF ELECTION WITH RESPECT TO THEIR ORDINARY SHARES. THE COMPANY DOES NOT ANTICIPATE THAT U.S. HOLDERS WILL BE ABLE TO MAKE SUCH ELECTION.

THE PLACING SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE US SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

NOTICE TO CANADIAN INVESTORS

THIS ANNOUNCEMENT IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE CONSTRUED AS, A PROSPECTUS, AN ADVERTISEMENT OR A PUBLIC OFFERING OF THE PLACING SHARES IN CANADA. NO SECURITIES COMMISSION OR SIMILAR REGULATORY AUTHORITY IN CANADA HAS REVIEWED OR IN ANY WAY PASSED UPON THE ANNOUNCEMENT OR THE MERITS OF THE PLACING SHARES, AND ANY REPRESENTATION TO THE CONTRARY IS AN OFFENCE. THE ANNOUNCEMENT IS NOT, AND UNDER NO CIRCUMSTANCES IS IT TO BE CONSTRUED AS, AN OFFER TO SELL THE PLACING SHARES DESCRIBED HEREIN OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION WHERE THE OFFER OR SALE OF THESE SECURITIES IS PROHIBITED.

THE COMPANY IS NOT A "REPORTING ISSUER," AS SUCH TERM IS DEFINED UNDER APPLICABLE CANADIAN SECURITIES REGULATIONS, IN ANY PROVINCE OR TERRITORY OF CANADA. THE DISTRIBUTION OF THE PLACING SHARES IN CANADA IS BEING MADE ONLY ON A PRIVATE PLACEMENT BASIS EXEMPT FROM THE REQUIREMENT THAT THE COMPANY PREPARE AND FILE A PROSPECTUS WITH THE SECURITIES REGULATORY AUTHORITIES IN EACH PROVINCE WHERE TRADES OF PLACING SHARES ARE MADE.

THE PLACING SHARES ARE BEING OFFERED BY THE COMPANY IN ALL OF THE PROVINCES IN CANADA TO CERTAIN ACCREDITED INVESTORS (AS DEFINED IN NATIONAL INSTRUMENT 45-106 PROSPECTUS AND REGISTRATION EXEMPTIONS) ONLY, EACH OF WHOM WILL BE REQUIRED TO ENTER INTO A SEPARATE SUBSCRIPTION AGREEMENT WITH THE COMPANY, WHICH WILL INCLUDE CERTAIN ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE CANADIAN INVESTOR, IN RESPECT OF ANY PLACING SHARES SUBSCRIBED FOR BY SUCH CANADIAN INVESTOR. CANADIAN INVESTORS ARE ADVISED THAT THE INFORMATION CONTAINED WITHIN THE ANNOUNCEMENT HAS NOT BEEN PREPARED WITH REGARD TO MATTERS THAT MAY BE OF PARTICULAR CONCERN TO CANADIAN INVESTORS. ACCORDINGLY, CANADIAN INVESTORS SHOULD CONSULT WITH THEIR OWN LEGAL AND FINANCIAL ADVISERS CONCERNING THE INFORMATION CONTAINED WITHIN THE ANNOUNCEMENT AND AS TO THE SUITABILITY OF AN INVESTMENT IN THE PLACING SHARES IN THEIR PARTICULAR CIRCUMSTANCES.

Details of the Placing

Canaccord Genuity have entered into an agreement with the Company (the "Placing Agreement") under which, subject to the conditions set out in that agreement, Canaccord Genuity have agreed to use reasonable endeavours to procure subscribers for the Placing Shares at a price determined following completion of the bookbuilding process in respect of the Placing (the "Bookbuild"), described in this announcement and set out in the Placing Agreement.

Up to US$50 million in value (by reference to the Placing Price and subject to agreement of the same) of the Placing Shares has been underwritten by Canaccord Genuity with the balance of the Placing Shares being placed by Canaccord Genuity and Renaissance Capital on a reasonable endeavours basis.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares including the right to receive all dividends and other distributions declared in respect of such ordinary shares after the date of issue of the Placing Shares.

Application for admission to trading

The allotment of the Placing Shares will be conditional on, amongst other things, the passing by shareholders of the Resolutions granting Directors, inter alia, the authority necessary for the issue of the Placing Shares.

The Company will apply for the Placing Shares to be admitted to trading on AIM and subject to the passing of the Resolutions it is expected that Admission will take place and that trading will commence in such shares on or about 22 March 2011.

Bookbuild

Canaccord Genuity will today commence the Bookbuild to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

Canaccord Genuity and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing:

1. Canaccord Genuity is acting as sole bookrunner and agent of the Company. Renaissance Capital Limited ("Renaissance") is acting as joint broker.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Canaccord Genuity. Canaccord Genuity and their affiliates are each entitled to enter bids in the Bookbuild as principal.

3. The Bookbuild will establish a single price payable in respect of the Placing Shares to Canaccord Genuity by all Placees whose bids are successful. The Placing Price and the number of Placing Shares to be issued will be agreed between Canaccord Genuity and the Company following completion of the Bookbuild. The Placing Price and the number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild.

4. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at Canaccord Genuity. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at either the Placing Price, which is ultimately established by the Company and Canaccord Genuity, or at prices up to a price limit specified in its bid. Bids may be scaled down by Canaccord Genuity on the basis referred to in paragraph 9 below.

5. The Bookbuild is expected to close no later than 6.30 p.m. (London time) on 1 March 2011 but may be closed earlier or later at the discretion of Canaccord Genuity. Canaccord Genuity may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right (upon the agreement of Canaccord Genuity) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.

6. Each prospective Placee's allocation will be agreed between Canaccord Genuity and the Company and will be confirmed orally by Canaccord Genuity as agent of the Company following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of Canaccord Genuity and the Company to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association.

7. Each prospective Placee's allocation of Placing Shares and commitment will be evidenced by a contract note issued to such Placee by Canaccord Genuity and the terms of this Appendix will be deemed incorporated in that contract note.

8. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Company and the Bookrunner as agent of the Company, to pay the Bookrunner (or as it may direct) in cleared funds, an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe and the Company has agreed to allot and issue to that Placee.

9. Canaccord Genuity may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with the Company and may scale down any bids for this purpose on such basis as they may determine. Canaccord Genuity may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Company (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

10. A bid in the Bookbuild will be made on the terms and subject to the conditions in this announcement and will be legally binding on the Placee on behalf of which it is made and except with the consent of Canaccord Genuity will not be capable of variation or revocation after the time at which it is submitted.

11. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

12. All obligations under the Bookbuild and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below.

13. By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

14. To the fullest extent permitted by law, neither Canaccord Genuity nor any of their affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither of Canaccord Genuity nor any of their affiliates shall have any liability (including to the fullest extent permitted by law, any fiduciary duties) in respect of the Bookrunner conduct of the Bookbuild or of such alternative method of effecting the Placing as Canaccord Genuity and the Company may agree.

Conditions of the Placing

The obligations of Canaccord Genuity under the Placing Agreement are conditional on, amongst other things:

(a) agreement being reached between the Company and Canaccord Genuity on the Placing Price and the number of Placing Shares;

(b) publication by the Company of an announcement of the Placing Price;

(c) Admission taking place by 8.00 a.m. (London time) on 22 March 2011 (or such later date as the Company and Canaccord Genuity may otherwise agree being not later than 30 April 2011); and

(d) the passing of the Resolutions, without amendment, at the General Meeting of the Company ;

(e) the Placing Agreement becoming unconditional in all other respects.

If any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by Canaccord Genuity, by the respective time or date where specified (or such later time and/or date as the Company and Canaccord Genuity may agree but in any event not later than 30 April 2011), the Placing will not proceed and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

Canaccord Genuity may, at its discretion and upon such terms as it thinks fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the condition in the Placing Agreement relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this announcement.

None of Canaccord Genuity, the Company or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and / or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Canaccord Genuity.

The Placing Agreement may be terminated by Canaccord Genuity at any time prior to Admission in certain circumstances including, among other things, following a breach of the Placing Agreement by the Company or the occurrence of certain force majeure events.

By participating in the Placing, Placees agree that the exercise by Canaccord Genuity of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Canaccord Genuity and that they need not make any reference to Placees and that they shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No prospectus

No offering document, prospectus or admission document has been or will be submitted to be approved by the FSA or submitted to the London Stock Exchange in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this announcement (including the Appendices) released by the Company today and any information previously published by the Company by notification to a Regulatory Information Service, and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

Each Placee, by accepting a participation in the Placing, agrees that the content of this announcement (including this Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than any information previously published by the Company by notification to a Regulatory Information Service), representation, warranty, or statement made by or on behalf of the Company or Canaccord Genuity or any other person and none of Canaccord Genuity or the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Group in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

This announcement is not a "prospectus" under the Companies (Jersey) Law 1991 (as amended). Therefore, this announcement has not been prepared strictly in accordance with the requirements of the Companies (General Provisions) (Jersey) Order 2002 and the Company has not sought and does not intend to seek the consent of the Registrar of the Companies in Jersey, and the Registrar of Companies in Jersey has not given its consent, to the circulation of this announcement.

Registration and settlement

Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. the Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in Canaccord Genuity's opinion, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price and settlement instructions.

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with Canaccord Genuity. The Company will deliver the Placing Shares to CREST accounts operated by Canaccord Genuity as agent for the Company, and Canaccord Genuity will enter its delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement will take place on 23 March 2011 in respect of the Placing Shares (being the business day following the General Meeting), on a delivery versus payment basis.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Canaccord Genuity.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Company may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Company's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and warranties

By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with Canaccord Genuity (in their capacity as underwriter, bookrunner and placing agent of the Company in respect of the Placing), with Renaissance (in their capacity as joint broker in respect of the Placing), and the Company, in each case as a fundamental term of their application for Placing Shares the following:

1 that it is, or at the time the Placing Shares are acquired that it will be, the beneficial owner of such Placing Shares, or that the beneficial owner of such Placing Shares is not a resident of Australia, Canada, Japan or the United States;

2 that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;

3 that the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access (i) such Exchange Information and (ii) such information or comparable information concerning any other publicly traded company, in each case without undue difficulty;

4 that none of the Bookrunner, Renaissance or the Company nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Group or any other person other than this announcement; nor has it requested any of the Bookrunner, Renaissance or the Company, nor any of their affiliates or any person acting on behalf of any of them to provide it with any such information;

5 that the content of this announcement is exclusively the responsibility of the Company and that neither the Bookrunner nor any person acting on its behalf has or shall have any liability for any information, representation or statement contained in this announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of the Bookrunner, Renaissance or the Company and none of the Bookrunner, Renaissance or the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Group in deciding to participate in the Placing;

6 that neither the Bookrunner nor any person acting on behalf of them nor any of their affiliates has or shall have any liability for any publicly available or filed information, or any representation relating to the Group, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

7 that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services);

8 that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

9 that it is acting as principal only in respect of the Institutional Placing or, if it is acting for any other person (i) it is duly authorised to do so, (ii) it is and will remain liable to the Company and/or Canaccord Genuity for the performance of all its obligations as a Placee in respect of the Institutional Placing (regardless of the fact that it is acting for another person), (iii) it is both an "authorised person" for the purposes of FSMA and a "qualified investor" as defined at Article 2.1(e)(i) of Directive 2003/71/EC (known as the Prospectus Directive) acting as agent for such person, and (iv) such person is either (1) a "qualified investor" as referred to at section 86(7) of FSMA or (2) a "client" (as defined in section 86(2) of FSMA) of its that has engaged it to act as such client's agent on terms which enable it to make decisions concerning the Institutional Placing or any other offers of transferable securities on such client's behalf without reference to such client;

10 that, if a financial intermediary, as that term is used in Article 3(2) of EU Directive 2003/71/EC (the "Prospectus Directive") (including any relevant implementing measure in any member state), the Placing Shares purchased by it in the Institutional Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to qualified investors, or in circumstances in which the prior consent of Canaccord Genuity has been given to the proposed offer or resale;

11 that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the Financial Services and Markets Act 2000 ("FSMA");

12 that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);

13 that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

14 that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

15 that (i) it is a person falling within Article 19(5) and / or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or is a person to whom this announcement may otherwise be lawfully communicated; and (ii) any offer of Placing Shares may only be directed at persons to the extent in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) and represents and agrees that it is such a qualified investor;

16 that it is entitled to purchase the Placing Shares under the laws of all relevant jurisdictions which apply to it, and that its subscription/purchase of the Placing Shares will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

17 that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as Canaccord Genuity may in its discretion determine and without liability to such Placee;

18 that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

19 that neither of Canaccord Genuity, Renaissance nor any of their respective affiliates, nor any person acting on behalf of either of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Institutional Placing and that participation in the Institutional Placing is on the basis that it is not and will not be a client of the Bookrunner or Renaissance and that neither of Canaccord Genuity or Renaissance have any duties or responsibilities to it for providing the protections afforded to their clients or customers or for providing advice in relation to the Institutional Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

20 that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. None of Canaccord Genuity, Renaissance or the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Institutional Placing and it agrees to indemnify the Company and Canaccord Genuity in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock accounts of Canaccord Genuity who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

21 that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company, Renaissance or Canaccord Genuity in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

22 that the Company, Canaccord Genuity and Renaissance will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are irrevocable and it irrevocably authorises the Company, Renaissance and Canaccord Genuity to produce this announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

23 that it will indemnify and hold the Company, Renaissance and Canaccord Genuity and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Institutional Placing;

24 that it will acquire any Placing Shares purchased by it for its account or for one or more accounts as to each of which it exercises sole investment discretion and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

25 that its commitment to subscribe for Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Institutional Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's, Canaccord Genuity's or Renaissance's conduct of the Institutional Placing. The foregoing representations, warranties and confirmations are given for the benefit of the Company as well as Canaccord Genuity. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from the Company for the Placing Shares in question. If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and neither the Company nor Canaccord Genuity shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify Canaccord Genuity accordingly;

26 that no action has been or will be taken by any of the Company, Canaccord Genuity, Renaissance or any person acting on behalf of the Company, Canaccord Genuity or Renaissance that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

27 that, in making any decision to purchase the Shares, it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for or purchasing the Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Institutional Placing. It further confirms that it relied on its own examination and due diligence of the Company and the Group taken as a whole, and the terms of the Institutional Placing, including the merits and risks involved;. that (A) an investment in the Company involves a high degree of risk and should not be made unless the Placee is prepared to, and can afford to, lose its entire investment; and (B) the Company makes no representation or warranty that the Placee will receive a return of its investment in the Company;

28 that it has (i) made its own assessment and satisfied itself concerning legal, regulatory, tax, business and financial considerations in connection herewith to the extent it deems necessary; (ii) had access to review publicly available information concerning the Company group that it considers necessary or appropriate and sufficient in making an investment decision; (iii) reviewed such information as it believes is necessary or appropriate in connection with its subscription or purchase of the Placing Shares; and (iv) made its investment decision based upon its own judgement, due diligence and analysis and not upon any view expressed or information provided by or on behalf of Canaccord Genuity and Renaissance;

29 that it may not rely on any investigation that Canaccord Genuity or any person acting on its behalf may or may not have conducted with respect to the Company, its Group, or the Institutional Placing and Canaccord Genuity have not made any representation to it, express or implied, with respect to the merits of the Institutional Placing, the subscription or purchase of the Placing Shares, or as to the condition, financial or otherwise, of the Company, its Group, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to purchase the Placing Shares. It acknowledges and agrees that no information has been prepared by Canaccord Genuity or the Company for the purposes of this Institutional Placing other than this announcement;

30 that accordingly it will not hold Canaccord Genuity or, any of its respective associates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Group's or information made available (whether in written or oral form) in presentations or as part of roadshow discussions with investors relating to the Group (the "Information") and that neither Canaccord Genuity, or any person acting on behalf of Canaccord Genuity, makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information; and

31 that in connection with the Institutional Placing, each of Canaccord Genuity and Renaissance and any of their respective affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Institutional Placing. Accordingly, references in this announcement to shares being issued, offered or placed should be read as including any issue, offering or placement of such shares in the Company to Canaccord Genuity, Renaissance and any relevant affiliate acting in such capacity. Neither Canaccord Genuity or Renaissance intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so;

32 that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to this participation in the Institutional Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations, and it has had access to such financial and other information concerning the Company, the Group and the Placing Shares as it deems necessary in connection with its decision to purchase the Placing Shares;

33 where it is acquiring Placing Shares for one or more managed accounts, that it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; and (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the Announcement of which it forms part;

34 that it is responsible for obtaining any legal and tax advice that it deems necessary for the execution, delivery and performance of its obligations in applying for Placing Shares, and that it is not relying on the Company to provide any legal or tax advice to it;

35 the Placee acknowledges that there is a significant likelihood that the Company may, presently or in the future, be classified as a "passive foreign investment company" ("PFIC") for US federal income tax purposes and that an investment in a PFIC may have materially adverse U.S. federal income tax consequences to a U.S. holder including subjecting a U.S. holder to a greater tax liability than such holder may otherwise have been subject to and subjecting a U.S. holder to an interest charge on a deemed underpayment of tax. The Placee has consulted with its own tax advisers regarding the US federal income tax consequences of an investment in a PFIC and it understands and acknowledges that the acquisition of securities in a PFIC involves a high degree of tax risk and it will not look to the Company, Canaccord Genuity, Renaissance or their respective affiliates for all or part of any additional taxes, interest or losses that it may suffer

36 that the Placee is aware that the Placing Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and that the Placee will not offer, sell, pledge or transfer any Placing Shares, except in accordance with the US Securities Act and any applicable laws of any state of the United States and any other jurisdiction;

37 that it (a) is outside the United States and it is not a U.S. Person purchasing the Placing Shares in an offshore transaction meeting the requirements of Regulation S and such purchase is not a result of any directed selling efforts within the meaning of Rule 902(c) of Regulation S or (b) (1) it is in the United States and is a QIB who is also an IAI who is purchasing the Placing Shares for its own account, or for the account of one or more persons who are QIBs and are also an IAI, (2) is aware, and each beneficial owner of such Placing Shares has been advised, that the sale of such Placing Shares to it is being made in reliance on an exemption from the registration requirements of the US Securities Act, (3) is purchasing the Placing Shares for its own account or for the account of one or more other investors who are QIBs and are also an IAI for which it is acting as a duly authorised fiduciary or agent, in each case for investment, and not with a view to, or for offer or sale in connection with, any distribution thereof within the meaning of the US Securities Act and the Placee has no plans to enter into any contract, undertaking, agreement or arrangement for any such purpose and (4) has not purchased the Placing Shares as a result of "general solicitation" or "general advertising" (within the meaning of Rule 502(c) under the US Securities Act), including advertisements, articles, research reports, notices or other communications published in any newspaper, magazine, on a website or in or on any similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

38 that it is entitled to subscribe for the Placing Shares under the laws of all relevant jurisdictions which apply to it; unless it can give the representations in paragraph 39(b) above, it is outside the United States; has not purchased the Placing Shares as a result of any directed selling efforts within the meaning of Rule 902(c) of Regulation S; and its purchase of the Placing Shares will be in compliance with the requirements of Regulation S, including, without limitation, that the offer and sale of the Placing Shares to it will be made in an "offshore transaction" as such term is defined in Regulation S;

39 that the Placing Shares are being offered in a transaction not involving any public offering in the United States within the meaning of the US Securities Act and that the Placing Shares have not been and will not be registered under the US Securities Act or the securities laws of any State in the United States and further acknowledges that the Placing Shares have not been approved or disapproved by the United States Securities and Exchange Commission or any other Federal or state regulatory agency, nor has any such agency passed on the merits of an investment in the Company;

40 that no representation has been, is being or will be made by the Company as to the availability of an exemption from the registration for the reoffer, resale, pledge or transfer of the Placing Shares in accordance the US Securities Act;

41 that for so long as any of the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the US Securities Act, it shall not resell or otherwise transfer any of the Placing Shares except (i) to the Company or any of its affiliates; (ii) outside the United States of America pursuant to Rule 903 or Rule 904 of Regulation S; (iii) inside the United States to any person whom the Placee and any person acting on its behalf reasonably believes is a QIB who is also an IAI subscribing for its own account or for the account of a QIB each of whom is also an IAI in a transaction exempt from the registration requirements of the US Securities Act, (iv) pursuant to Rule 144 under the US Securities Act (if available), or (v) pursuant to an effective registration under the US Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. The Placee also agrees that for so long as the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the US Securities Act, it will not deposit such shares in any unrestricted depositary facility established or maintained by a depositary bank. The Placee also understands that no representation can be made as to the availability of the exemption provided by Rule 144 for resales of interests in the Placing Shares. Further, the Placee agrees to notify any transferee to whom it subsequently reoffers, resells, pledges or otherwise transfers the Placing Shares of the foregoing restrictions on transfer;

42 that its Placing Shares, if issued in certificated form, will bear a legend substantially to the following effect, until the expiration of the applicable holding period with respect to the Placing Shares set forth in Rule 144 under the US Securities Act:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "US SECURITIES ACT") OR ANY STATE SECURITIES LAWS. THE HOLDER HEREBY, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF BELLZONE MINING PLC THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) to BELLZONE MINING PLC AND ITS AFFILIATES; (B) OUTSIDE THE UNITED STATES TO NON U.S. PERSONS IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT AND APPLICABLE FOREIGN LAWS; (C) Inside the United States TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A Under the US Securities Act (a "QIB") who is also an institutional Accredited Investor defined in rule 501(A)(1), (2), (3) and (7) under the US Securities Act (an "IAI"), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QIBs each of whom is also an IAI WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON an Exemption from registration requirements of the US Securities Act; (D) pursuant to Rule 144 under the US securities act (if applicable); or (e) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT THAT COVERS RESALES OF SECURITIES. THE HOLDER FURTHER AGREES THAT THE ORDINARY SHARES ARE ''RESTRICTED SECURITIES'' WITHIN THE MEANING OF RULE 144(A)(3) UNDER THE US SECURITIES ACT AND THAT IT WILL NOT DEPOSIT SUCH SECURITIES INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF SHAREs OF BELLZONE MINING PLCESTABLISHED OR MAINTAINED BY A DEPOSITARY PLACING AGENT;

43 that in the United States (i) there are substantial restrictions on the transferability of the Placing Shares, and that it must bear the economic risk of an investment in the Placing Shares for an indefinite period of time because the Placing Shares cannot be sold, transferred, assigned, hypothecated, pledged, or otherwise disposed of except as provided below; (ii) the Placing Shares to be acquired by the Placee may not be sold, transferred, or otherwise disposed of unless the Placing Shares are registered pursuant to the US Securities Act, or an exemption from registration under the US Securities Act is available, and that in the absence of either an effective registration statement covering such Placing Shares or an available exemption from registration under the US Securities Act, the Placing Shares must be held indefinitely; (iii) the Company has no present intention of registering the Placing Shares to be acquired by the Placee; and (iv) there is no assurance that any exemption from registration under the US Securities Act will be available and, even if available, such exemption may not allow the Placee to transfer all or any portion of the Placing Shares to be acquired by it in the circumstances, in the amounts or at the times the Placee might propose;

44 that:

I. until 40 days after the commencement of the Institutional Placing, an offer or sale of the Placing Shares into or within the United States by a dealer, whether or not such dealer is participating in this offering, may violate the registration and prospectus delivery requirements of the US Securities Act if such offer or sale is not made in accordance with an exemption from the registration requirements of the US Securities Act;

II. it has not, its affiliates (as defined in Rule 405 under the US Securities Act) have not, and any persons acting on its or their behalf have not engaged and will not engage in any directed selling efforts (as defined in Regulation S) with respect to the Placing Shares; and

III. it has not, and its affiliates (as defined in Rule 501(b) under the US Securities Act) have not, and any person acting on its or their behalf have not engaged and will not engage in any form of general solicitation or general advertising (within the meaning of Rule 502(c) under the US Securities Act), including advertisements, articles, research reports, notices or other communications published in any newspaper, magazine, on a website or in or on any similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising in connection with any offer or sale of the Placing Shares.

45 that it has had an opportunity to ask questions of, and to receive information from, the Company and persons acting on its behalf concerning the terms and conditions of the Institutional Placing, and to obtain any additional information necessary to verify the accuracy of the information and data received by the Placee;

46 to furnish any information requested to assure compliance with applicable federal and state securities laws in connection with the purchase and sale of the Placing Shares;

47 that the Placee has not used any person as a "Purchaser Representative" within the meaning of Regulation D under the US Securities Act to represent it in determining whether it should purchase the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with Canaccord Genuity, any money held in an account with Canaccord Genuity on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the Bookrunner's money in accordance with the client money rules and will be used by the Bookrunner in the course of their own business; and the Placee will rank only as a general creditor of Canaccord Genuity.

All times and dates in this announcement may be subject to amendment. Canaccord Genuity shall notify the Placees and any person acting on behalf of the Placees of any changes.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

DEFINITIONS

Terms not otherwise defined below have the same meanings given to them elsewhere in this announcement:

"Admission" means admission of the Placing Shares to AIM;

"AIM" means the AIM market of the London Stock Exchange;

"Board" means the board of directors of the Company;

"Bookrunner" means Canaccord Genuity;

"Canaccord Genuity" means Canaccord Genuity Limited;

"Company" means Bellzone Mining plc;

"Companies Laws" means the Companies (Jersey) Law 1991 as mended;

"Directors" means the directors of the Company;

"General Meeting" or "GM" means the extraordinary general meeting of the Company proposed to be held on or around 21 March 2011;

"Group" means the Company and its subsidiary undertakings;

"Institutional Placing" means the placing of the Placing Shares described in this announcement;

"London Stock Exchange" means London Stock Exchange plc;

"Ordinary Shares" means the ordinary shares in the share capital of the Company;

"Placees" means investors with whom Placing Shares are placed;

"Placing Agreement" means the agreement dated 1 March 2011 entered into by the Company and Canaccord Genuity in connection with the " Institutional Placing" means the placing of the Placing Shares described in this announcement;

"Placing Price" means the price at which the Placing Shares are to be issued pursuant to the Placing;

"Placing Shares" means the new Ordinary Shares to be issued pursuant to the Institutional Placing;

"Regulatory Information Service" has the meaning attributed thereto in the AIM Rules for Companies issued by the London Stock Exchange

"Resolutions" means the resolutions to be set out in the notice of General Meeting pursuant to which it is proposed that the Directors be authorised to allot the Placing Shares;

"United States" or "US" means the United States of America, its territories and possessions, any State of the United States and the District of Columbia; and

"£" means the lawful currency of the United Kingdom.