Bellzone Mining Regulatory News (BZM)

7.00 am 24 June 2013

Bellzone Mining plc

("Bellzone" or "the Company")

Results for the year ended 31 December 2012

Bellzone Mining plc (AIM:BZM), is pleased to announce its full year results for the year ended 31 December 2012.

Key points

·; Kalia Mining Concession (Permit) issued in August

·; The Kalia Feasibility Study released in July was based on 46 million tonnes per annum production rate with favourable financial returns

·; Kalia JORC-compliant oxide mineral resources doubled, containing high-grade oxide (DSO) mineral resources near-surface of 87.5 million tonnes at 54.1% iron (above a 50% cut-off grade)

·; The Kalia Optimisation Study commissioned in Q1, 2013 focused on early production from the highest grade mineral resources from a low capital intensity project due for release Q3 2013

·; Glenn Baldwin appointed as Chief Executive Officer

·; Corporate office relocated to Jersey

·; The Exploitation (Mining) Permit was issued for Forécariah

·; The first shipment of iron ore from Guinea since 1966 from Forécariah

·; Cash at end of May 2013 of $20.3m covering planned activities into H2 2014

Glenn Baldwin, Chief Executive Officer of Bellzone, commented: "From an external perspective it may seem that the focus this past year has been solely on activities relating to Forécariah. While we have put a significant amount of effort into the construction of the joint venture facilities within the time and budget targets, we have made huge progress on our strategy to develop our flagship project, Kalia. Leveraging off the feasibility study published in mid-2012 which considered a large iron ore project, we have revisited the Kalia development parameters on the back of the 87.5 million tonne high-grade oxide mineral resource announced in December 2012.

The Kalia optimisation study investigates the optimal solution for the start of Kalia operations and seeks to define a low capital intensity, reduced risk and scalable project. We will announce the outcome of this optimisation work in Q3 2013 which is being completed by globally recognised consultants in their field of expertise.

The joint venture at Forécariah is planned to be self-funding through its current production plan, seeing it through to at least the end of 2015.The joint venture has also commenced a new programme of exploration drilling to define additional mineral resources with a focus on identifying additional DSO style resources that can be exported using the existing facilities.

Bellzone itself had a cash balance of just over $20 million at the end of May 2013. Based on our planned activities this is sufficient to see us into the second half of 2014. The key objectives within the next 12 months are to complete the Kalia Optimisation Study as we have committed, secure project funding and commence construction of our flagship project."

A complete copy of the results for the year ended 31 December 2012 is available on the Company's website: www.bellzone.com.

Enquiries:

Bellzone Mining plc

Peta Baldwin, Corporate Affairs +44 (0) 1534 513 500

Canaccord Genuity Limited

Nominated Adviser and Broker to Bellzone +44 (0)20 7523 8000

Andrew Chubb/Tarica Mpinga

Investec

Chris Sim +44 207 597 5970

Tavistock (Media Inquiries)

Jos Simson/Mike Bartlett +44 (0)20 7920 3150 / +44 (0)7899 870 450

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 Project is the Company's flagship project with a globally significant magnetite resource of 4.63 billion tonnes and some 822 million tonnes of oxide and supergene material.

The Forécariah iron ore mine commenced production in May 2012 and is a joint venture between Bellzone (50%) and China International Fund Limited (50%).

CHAIRMAN'S STATEMENT

Over the past year, together with our JV partner, CIF, we have brought on stream the first iron ore mine since 1966 in the Republic of Guinea - in record time and on budget. With the same energy, we have exported our first ore, we have proven additional mineral resources at our iron ore projects and we have laid the basis for exploring our prospective copper-nickel tenements.

Bellzone has shown courage and commitment while others have scaled back activities in light of recent, temporary events and are reconsidering their commitment to Guinea. We have quietly and methodically persisted in the development of our assets in partnership with the government, with our JV partner and, very importantly, with our host communities.

The government of Guinea has proactively turned towards companies like Bellzone that have explored for mineral resources and quickly turned them to productive account. This approach immediately garners favour in a country rich in natural resources which has seen frustratingly little mining development in the past decade, most notably in the iron ore sector.

Like governments of other countries at a similar stage of economic development, Guinea is naturally enthusiastic about developing its mineral endowment as rapidly as possible.

The country's citizens expect, reasonably enough, improved living standards that are best delivered and sustainably managed by economic development. We also take comfort in the approach by the government of Guinea to transparency; demonstrated by its commitment to the Extractive Industries Transparency Initiative (EITI), which we also support.

Our principal achievement in 2012 was to establish and bring the JV Forécariah iron ore mine into production. Located some 160km to the south-east of the capital, Conakry, Forécariah is a partnership in which the state has a 15% interest while we and our JV partner, CIF, have equal 42.5% shareholdings. We expect that, in due course, cash flow from Forécariah will assist the Company's regional development and production plans, eventually leading to distributable profits.

While we are particularly proud of our achievement in bringing Forécariah into production so quickly, our flagship project in Guinea remains the Kalia mine. Kalia is located some 360km by road from Conakry. We were granted a full mining licence at Kalia in August 2012 following five years of exploration and evaluation work by Bellzone. The mine site has excellent facilities for those who work there. It has been visited by a number of ministers and other high-ranking government officials.

In round figures, Kalia has total JORC-compliant resources of haematite and magnetite iron ores totalling well over6 billion tonnes. Our preliminary estimates are that Kalia may be brought to full production at a capital cost, including all necessary infrastructure, of some $4.5 billion to produce 46 million tonnes of ore annually for export. These are preliminary estimates to be refined in the coming months to break down the capital required into distinct standalone phases of production of different product types.

Turning to the current state of the global iron ore market, the latter part of 2012 and the early months of 2013 have seen prices retreating from earlier peaks. There are several factors which have contributed towards these market conditions. For the main part, we have seen that the Australian majors, because of their proximity to China, tend to dominate the seaborne market for the world's largest importer. While the Australian majors have expanded their export capacity, Chinese growth has slowed as the Beijing government's determination to shift economic emphasis, from investment-led growth towards a model driven more by consumption, has strengthened.

It remains the case, however, that Chinese steel consumption is expected to continue to rise both in absolute and per-capita terms for at least the next decade. Having spent considerable time examining the cost structure of the world's iron ore industry, I am confident that Bellzone's mines are capable of delivering highly competitive, relatively low capital-cost iron ore production into this rapidly expanding market.

In conclusion, the past year has been one of significant achievements that would not have been possible without the unstinting efforts and commitment of our Board, and of our management colleagues, and combined with the active cooperation of the Guinean government, the country's civil servants, the members of our host communities and our JV partner. It would be remiss of me not to extend my grateful thanks to the employees of Bellzone.

Finally, though by no means least, I welcome the appointment of Glenn Baldwin as the Company's new Chief Executive Officer (CEO). Glenn has already contributed his extensive multi-national mining and leadership experience to the Company's development, and I look forward to working with him for many years to come.

Michael Farrow

Chairman

21 June 2013

Consolidated Statement of Financial Position at 31 December 2012

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

Consolidated Statement of Comprehensive Income for the year ended 31 December 2012

Consolidated Statement of Changes in Equity for the year ended 31 December 2012

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Consolidated Cash Flow Statement for the year ended 31 December 2012

Notes to the Annual Financial Statements for the year ended 31 December 2012

1. Corporate

The Consolidated Financial Statements of Bellzone Mining plc ("the Company") for the year ended 31 December 2012 were authorised for issue in accordance with a resolution of the directors on 21 June 2013.

Bellzone Mining plc is a listed public Company incorporated and registered in Jersey, Channel Islands. The consolidated financial statements of the Company as at and for the year ended 31 December 2012 comprise the Company and its subsidiaries (together referred to as the "Group" and individually as "group entities").

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied unless otherwise stated.

Basis of preparation

a. Statement of compliance

The financial report has been prepared in accordance with IFRS as adopted for use in the EU.

b. Early adoption of standards

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

c. Basis of measurement

The financial report has been prepared on the historical cost basis except where indicated otherwise in the notes to the financial statements. Certain comparative information has been reclassified to conform to current period presentation.

d. Functional and presentation currency

The functional currency of the Company and all of its subsidiaries is the United States Dollar ("US Dollar"), which is the currency of the primary economic environment in which the entities operate. All amounts are expressed in US Dollars. All financial information presented is in US Dollars and all values are rounded to the nearest thousand ($000) unless otherwise stated.

e. Going concern

The audited results for the year reflect the current nature of the Group's activities being mineral exploration and project development. The current nature of the Group's activities does not provide the Group with sufficient production or trading revenues to support operations. The Group has met its working capital requirements by raising the required capital through the placing of shares with investors. The Company has raised $339.6 million since incorporation.

The funds available at 31 December 2012 were sufficient to meet the planned activities for 2013. Those plans include the feasibility study costs for Kalia Project 1 (accelerated development of the high-grade oxide component of Kalia), exploration and evaluation of Sadeka as well as corporate costs. It should also be noted that planned activities can be adapted to meet cash availability; particularly should an unplanned event requiring cash arise. The Board of directors has approved the activities and budget to Q4 2014. The activities outlined by the Board are supported by current cash reserves. Cost reductions have been achieved through a reduction in drilling activities at Kalia, given that the level and extent of the resource definition is more than sufficient to meet project study requirements; centralisation of administration processes; procurement efficiencies; and general focus on cost management.

The directors believe that the Group will continue as a going concern and base this view on the factors set out below.

·; The pace of the development of the projects is subject to a number of variables largely within the control of the Group.

·; The project development programmes and budgets are reviewed on an annual basis and approved by the Board. The Board in approving the budget takes into account the:

o Working capital available for the next 12 months;

o Work required to continue to meet commitments and advance the Kalia project to the production phase; and

o Maintenance of a sufficient buffer of working capital required for the foreseeable future.

·; The Board monitors expenditure against budgets on a monthly basis and adjusts the programme as required.

Based on the cost per tonne being achieved at the Forécariah operations and subject to the capital requirements identified through the current studies on Kalia Project 1, it is likely that Bellzone will have a highly favourable case for developing Kalia.

The Group's activities alone will not provide sufficient production or trading revenues to meet the development requirements of Kalia and the Company will seek to fund the development of Kalia Project 1 through a combination of debt, direct asset investment project finance and off-take arrangements.

The directors believe that the Group has adequate resources to continue for the foreseeable future, the flexibility to adjust operations to suit funds, and the ability to source funding through debt and equity markets to continue with the planned exploration and project development as well as any expansion of the scope or acceleration of activity, thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

f. Discontinued operations

A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

·; represents a separate major line of business or geographical area of operations;

·; is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or

·; is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs upon disposal/abandonment or when the operation meets the criteria to be classified as held-for-sale, if earlier.

When an operation is classified as a discontinued operation, the comparative statement of profit or loss and other comprehensive income is represented as if the operation had been discontinued from the start of the comparative year. See Note 7.

2. Property, plant and equipment

3. Mineral properties in the exploration and evaluation phase

The opening balance relates to the costs of acquiring 100% of the companies holding the Kalia, Faranah. and Sadeka exploration permits.

The movement for the year represents the statutory fees paid to finalise the issue of the Mining Concessions (Permits) for the Kalia and Faranah areas.

The agreement with CIF of 2 August 2010 will require the Company to transfer 50% of the defined Kalia II area of the Kalia permit and 100% of the Faranah permit when CIF have met conditions to finance the development of the Kalia operations and related infrastructure.

4. Investment accounted for using the equity method

5. Issued capital

Ordinary shares have no par value, carry one vote per share and carry the right to dividends. All shares have been fully paid.

6. Reserves

Nature and purpose of reserves

i. Cumulative translation adjustment

The cumulative translation adjustment arose in 2010 on the translation of assets and liabilities previously stated in Australian dollars to US Dollars as a result of the change in functional currency and presentation currency. Assets and liabilities were translated from the previous presentation currency (Australian Dollars) to US Dollars at the beginning of the comparative period using the opening exchange rate and retranslated at the closing rate. Income statement items were translated at the average rate for the respective periods. Stated capital was translated at the historic exchange rates ruling on the date of the share issue. All resulting differences were reported in cumulative translation adjustment.

ii. Share-based payments reserve

The share-based payments reserve is used to recognise:

·; The amortisation over the service period of the grant date fair value of awards issued to employees which have not yet vested;

·; The grant date fair value of warrants issued; and

·; The grant date fair value of options issued to executives but not exercised.

The reserve comprises the credit to equity for equity-settled, share-based payment arrangements under IFRS 2 - Share-based payment. The standard requires that the expense be charged to the profit and loss component of the statement of comprehensive income while a credit needs to be raised against equity over the vesting period. When options are exercised, the reserve related to the specific options is transferred to share capital.

iii. Treasury shares

Total Treasury shares held in the BESPT had a cost of $413k at 31 December 2012 (31 December 2011: $154k) and constitute 3.89% (31 December 2011: 1%) of the Company's issued capital as at that date. At the reporting date, 28.8 million shares were held in the BESPT. Shares are distributed to employees in line with the terms of the plan, under the administration of the independent trustees. Employees may elect to not accept the offer of the shares by the independent trustees, in which case the shares remain in the BESPT until they are issued in terms of an offer made by the independent trustee. Employees who elect to not accept the offer made by the independent trustees have no guaranteed right to the shares and are subject to the independent trustee making a future offer at the independent trustees' discretion.

7. Discontinued operations

In 2010 the Company entered into a contract with Compagnie Miniere De L'Ouest Africain SA (CMOA) which owns a number of the exploration and development rights to tenements in Mali. Based on the results of the due diligence exploration programme conducted by Bellzone through 2011, the decision not to proceed was taken in Q2 2012. At 31 December 2012, the abandoned project was classified as a discontinued operation. The results for the year are presented below:

8. Reconciliation of loss after income tax to net cash inflow from operating activities

9. Events occurring after the reporting period

There were no significant events subsequent to the period end that require disclosure.