Bellzone Mining Regulatory News (BZM)

24 December 2015

Bellzone Mining plc

("Bellzone" or "the Company")

Financing Update and 2016 Business Plan

Bellzone (AIM: BZM) announces that agreement has been reached with Hudson Global Group Limited ("Hudson"), which has a 50.50 per cent. shareholding in the Company, regarding its working capital funding for 2016.

The Company's working capital requirements up to the end of 2015 have been funded by a US$10 million loan facility provided by China Sonangol International (S) Pte Ltd ("CSIS") (previously announced on 18 August 2014, amended on 28 January 2015 and further amended and extended on 5 March 2015), which has now been fully drawn down. CSIS and Hudson are both wholly-owned subsidiaries of China Sonangol International Limited and CSIS transferred its entire shareholding in the Company to Hudson on 31 July 2015 as previously announced.

Hudson will continue to provide financial support to Bellzone on substantially the same commercial terms as the existing CSIS loan facility.

New Loan Facility with Hudson

Hudson has agreed to make available a loan facility of up to US$6.5 million to Bellzone (the "Hudson Loan Facility"). The first draw down of up to US$2 million shall occur no later than 31 January 2016. Unless otherwise agreed, subsequent draw downs shall not exceed US$1 million each up to the aggregate committed amount. The available funds are expected to provide Bellzone with sufficient working capital for 2016. Interest is chargeable at Libor plus 5 per cent. and will accrue to be repaid with the principal drawn on the repayment date of 31 March 2018.

Amendment to the US$10 million CSIS Loan Facility

CSIS has agreed a further amendment to its existing loan facility on 17 December 2015. This amendment extends the US$10 million loan commitment to US$10.2 million on identical terms in recognition of a US$200,000 advance granted by CSIS to the Company on 10 June 2015 to fund the report by CSA Global Pty Ltd on Bellzone's Nickel Mineral Resource Estimate announced on 15 October 2015 (the "CSA Report"). CSIS has also reset the interest payment dates to 31 December 2016, 31 December 2017 and 31 March 2018.

CSIS has further waived all technical defaults under the CSIS Loan Facility and provided its consent for the Company to agree the Hudson Loan Facility.

Related Party Transactions

Under the AIM Rules, as a result of its 50.50 percent shareholding in the voting rights of the Company, Hudson is a related party of Bellzone. Under the AIM Rules, CSIS is also a related party of Bellzone, having held a 50.50 per cent. shareholding in the Company within the last twelve months.

The Independent Directors of Bellzone, being Michael Farrow, Simon Brickles and Antony Gardner-Hillman consider, having consulted with Bellzone's Nominated Adviser, WH Ireland Limited, that the terms of the Hudson Loan Facility and the abovementioned amendments to the CSIS Loan Facility are fair and reasonable insofar as the shareholders of Bellzone are concerned.

Strategy and 2016 Business Plan

To follow up on the conclusions of the CSA Report, Bellzone intends to engage specialist consultants to undertake a detailed feasibility study into the development of a nickel-focused iron ore mining project at Kalia Northwest ("Nickel Project") as the first enabling step towards production of iron ore on a large scale at Kalia. Hudson has provided the Company with its commitment in writing to finance this study on mutually acceptable terms, which will be announced if and when they are agreed.

Proposals from shortlisted consultants have been evaluated and formal appointments are expected to be made in the near future. The study is estimated to take between 6-9 months and provide a concrete basis upon which Bellzone can seek financing partners with a view to commencing production by early 2017.

Bellzone is also in the process of negotiating with the Government of the Republic of Guinea on amendments to its the Kalia Base Convention which was ratified in August 2010. This will update key provisions taking cognizance of the 2011 Guinea Mining Code where relevant and provide clear parameters around the Nickel Project.

Forécariah Joint Venture

The Company notes that Forécariah Holdings Pte Ltd ("FHPL"), the holding company of the 50:50 joint venture with China International Fund in Forécariah prefecture in Guinea, was subject, on 11 December 2015, to a High Court order in the Republic of Singapore to be wound up under the provisions of the Companies Act (Cap. 50).

Bellzone's 50 per cent. holding in this joint venture, held directly by its subsidiary Coastal Iron Developments Limited, was written down to zero value during the year ended 31 December 2013. Accordingly, this winding-up has no effect upon the balance sheet or profit and loss account of Bellzone Mining plc. At the same time, Coastal Iron Developments Limited, Bellzone's Jersey subsidiary through which Bellzone's 50 per cent. holding in FHPL is held, remains a significant creditor of FHPL and is following due process in response to the appointed joint and several liquidators, to reserve its rights and state its claims.

Mr. Michael Farrow, Chairman of Bellzone, said: 

"On behalf of the Board and all our shareholders, I would like to express my sincere appreciation to CSIS and Hudson for their continuing and steadfast support for Bellzone. Without their willingness to provide critical financing, we would not be able to seek to realize the significant potential of our world-class Kalia iron ore concession. While commodity prices remain depressed, we are excited to be able to take the first concrete step forward on a meaningful Nickel Project which has promising characteristics and which can become an important overall contributor to the Guinean economy in time. Having made substantial investments in Kalia over many years, it is important that Bellzone is able to map a credible path to Kalia's exploitation and the Nickel Project represents only the beginning of this."

Enquiries:

http://www.bellzone.com/