Bellzone Mining Regulatory News (BZM)

2 June 2015

BELLZONE MINING PLC

("Bellzone" or "the Company")

Results for the year ended 31 December 2014

Bellzone Mining plc ("Bellzone" or "the Company") (AIM:BZM) announces the audited results of the Company for the year ended 31 December 2014.

Results

· Loss for the year from continuing operations of $20.8 million (2013: $156.5 million)

· Operating cash outflow of $13.4 million (2013: $35.6 million)

· Cash flows from financing activities $7.6 million (2013: nil)

· Net Debt of $3.5 million as at 31 December 2014

Chairman's Statement

Bellzone has undergone significant change over the past year. A year in which resolve, experience and relationships have been tested and proven to be resilient where others in our sector have sadly faltered.

Operationally, the Group has sought to maintain activity required to comply with permit obligations whilst reducing costs as far as possible. The Company has met its planned objectives at Kalia and continues to drive down costs without negatively impacting its Guinean staff.

The Guinean authorities have been conducting reviews of all issued mining licences. The CTRTCM (Comité Technique de Revue des Titres et Conventions Miniers) review has recently asked Bellzone to provide additional information on the Kalia licence and the Board has responded to this request. The Company will continue to engage with the Guinean authorities to ensure Bellzone's hard-earned reputation in Guinea as a good corporate citizen is maintained.

Corporate activity has been focused on obtaining finance, firstly to continue in operation and looking to Kalia development finance in the second instance. The support of our major shareholder, China Sonangol International (S) Pte Ltd ("China Sonangol"), has enabled us to obtain financing to continue in operation whilst our not insignificant efforts to finance Kalia have not been successful to date.

The combination of decreasing commodity prices, perceptions of Guinea as an investment destination and of West Africa as a difficult operating environment, as well as the Ebola outbreak, have negatively impacted our Kalia financing initiatives and, in the case of Ebola, stopped crucial next step activities such as in-country due diligence by potential financiers and investors. The human face of the impact of the Ebola situation does however place the trials and tribulations of Kalia financing in perspective.

China Sonangol's support and interest in Bellzone extends beyond the purely financial aspect and the Board of Directors has seen significant change as a result. I welcomed Mr. Kum Hon Tung, acting Chief Executive Officer, to the Board as well as Messrs. Simon Brickles and James Leahy as Independent Directors at the same time as Messrs. Glenn Baldwin and Terry Larkan stepped down from the Board in November 2014. Having helped to oversee a transitional period for the Board, Mr. Leahy resigned to pursue other opportunities in May 2015. The Board now comprises three Independent Non-Executive Directors and one Executive Director.

I am pleased to report that the Board was successful in having the Company's shares re-admitted to trading on the AIM Market on 6 March 2015 and in securing finance for 2015 operational and working capital requirements.

Your Board is committed to delivering value to all shareholders and is now focused on ensuring the Company retains its mining and exploration permits, including the Sadeka permit currently under discussion. During this period of low activity, we are exploring various pathways on how best to realise the full potential of Bellzone's world-class asset at Kalia and evaluating the potential of alternative strategies possibly available through the financial and strategic strength of China Sonangol.

Michael Farrow

Chairman

2 June 2015

Operations and Financial Review

The Company was severely challenged to continue operations over the past year during which we have seen other companies operating in iron ore in the West African region fail.

It is only through continuous cost reduction and supportive shareholder funding from China Sonangol that Bellzone has been able to continue operating in these trying times. The 84.1 per cent. reduction in year-on-year cash costs was achieved whilst meeting financial obligations in Guinea and without impacting our staff or host community with reduced activity, thereby maintaining Bellzone's good corporate standing in Guinea.

Market conditions for fundraising for major mining projects have been generally difficult since 2012 and, in particular, for relatively new mining companies. 2014 saw the price of seaborne iron ore collapse by close to 50 per cent., to a level from which prices have yet to recover.

The Company continued to operate due to the significant reduction in costs and obtaining financing through small equity placements and a $4 million short term secured loan ("the Loan Facility") in August 2014, all with China Sonangol. As a result of equity placings that were completed in 2014, China Sonangol is now the majority shareholder with 50.50 per cent. of the issued share capital of the Company and 51.00 per cent. of the total voting rights in the Company, taking account of treasury shares held.

In March 2015 the Company agreed with China Sonangol to extend and amend the terms of the Loan Facility. The agreed amendments extended the availability period and the repayment date to 31 March 2018 and increased the total funding available under the Loan Facility from $4 million to $10 million. The amended Loan Facility is expected to provide Bellzone with sufficient working capital for 2015.

Outlook and Strategy

It is the intention of Bellzone to obtain further finance for the development of its Kalia project, once the Ebola outbreak is in abeyance and the iron ore price environment improves, such that project finance is available on terms acceptable to the Company.

Bellzone's flagship asset remains a strong iron ore development project. The fully independent BFS on the first phase of Kalia's proposed production ("Kalia Project 1" or "KP1") led by Fluor Australia Pty Limited and published in September 2013 demonstrated the robust financial business case for KP1. The Company believes that KP1 remains viable even at today's low iron ore prices.

Accounting Policies

There have been no changes to the accounting policies adopted by the Group in 2014.

Presentation of Financial Statements

The financial statements are presented in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS"), and are presented in US Dollars ("$") with all values being rounded to the nearest thousand ($000) unless otherwise stated.

Dividends

As the Group is in a project-development stage and generates no revenue, no dividends have been declared (2013: nil).

Changes in Finances

The Australian subsidiary, Bellzone Management Services PTY LTD was placed into administration in October 2014 after the Board of Directors considered that the subsidiary was no longer serving any purpose. The closure of the subsidiary resulted in annual cash cost savings of $2.1 million and removed liabilities of $0.2 million from Group liabilities.

Treasury and Cash Flow Management

At 31 March 2015, funds on hand and available amounted to $4.0 million.

The Board has a Treasury Committee consisting of the Chairman and the Chief Financial Officer.

The structuring of the Company's treasury reduces exposure to currency fluctuations by holding the bulk of the funds in the currency used for budgeted expenditure. The expenditure in Guinean Francs is the only currency which is not managed through this mechanism and is converted on a monthly basis for actual funding requirements.

Funding Requirements

The Company has agreed with China Sonangol to extend and amend the terms of the Loan Facility. The agreed amendments extended the availability period and the repayment date to 31 March 2018 and increased the total funding available under the Loan Facility from $4 million to $10 million. The amended Loan Facility is expected to provide Bellzone with sufficient working capital for 2015.

The Company plans to make further cost reductions in the short term without reducing Guinean staff and corporate activities on statutory requirements. We will increase our efforts in sourcing new funding for the development of Kalia per the BFS published in September 2013.

Kum Hon Tung

CEO and Chief FinancialOfficer

2 June 2015

This announcement and the financial information and accompanying notes to the financial statements do not constitute audited financial statements but are derived from audited financial statements. A copy of the Company's full audited results for the year ended 31 December 2014 is contained in its audited financial statements, which are being posted to shareholders together with a notice of the Company's Annual General Meeting to be held on 23 June 2015 at 9am in the Boardroom, Level 2, 5 St Andrews Place, Charing Cross, St Helier, Jersey JE2 3RP, Channel Islands. The audited financial statements will be made available on the Company's website at www.bellzone.com and should be read in conjunction with the above.

Enquiries:

Corporate Affairs Bellzone Mining plc

Simon Edwards

Telephone: +44 1534 513 500

Nominated Adviser WH Ireland Limited

James Joyce

Telephone: +44 20 7220 1666

Public Relations Bell Pottinger

Daniel Thole

Telephone: +44 20 3772 2500

About Bellzone

Bellzone Mining plc ("Bellzone" or "the Company") is incorporated and registered in Jersey, Channel Islands.

The Company is engaged in the exploration, development and operation of iron, copper and nickel licences in Guinea.

On 16 August 2013, Bellzone released an updated Joint Ore Reserves Committee ("JORC") resource statement for Kalia. The report based geological work undertaken as part of the Kalia bankable feasibility study ("BFS") showed:

• High-grade indicated and inferred mineral resources of 124.2Mt at 53.5% Fe.

• High-grade oxide-style resource converted from inferred to indicated level and a Supergene Banded Iron Formation ("SBIF") mineral resource of 72.8Mt at 53.7% Fe.

• Total oxide and SBIF indicated and inferred mineral resource of 913.2Mt at 36.3% Fe.

• Total oxide and SBIF indicated mineral resource of 264.6Mt grading at 39.8% Fe.

• Magnetite banded iron formation resources of 4.72 billion tonnes at 29.3% Fe.

The Kalia mineral resources translate to a potential production of 1.9 billion tonnes of saleable iron ore. On 13 September 2013, the Company announced a maiden JORC Probable Reserve of 59.8Mt at 54.1% Fe. A fully independent Bankable Feasibility Study ("BFS") on the first stage of production at Kalia was announced on 17 September 2013.

Bellzone also holds a gold exploration permit in part of the Kalia area.

The Sadeka prospecting permit is located approximately 150km south-east of Kalia and is centred in the town of Albadaria. It covers an area of 2,086km2 with the rights to explore for nickel, copper, cobalt, manganese, platinum and chromium. The permit expired after a 7 year period under the 2011 Mining Code in February 2015 and has not been renewed or replaced with a new base metals exploration permit. The Company is engaged in discussion with The Government of Guinea on the conditions required to renew the permit.

The Forécariah iron permit, on which the Forécariah Joint Venture with China International Fund Limited ("FJV") operates, covers an area of 319km2 and is located 76km (by haul road) from the port of Konta, Guinea.

FINANCIAL STATEMENTS

The following financial information for the year ended 31 December 2014 has been extracted from the audited financial statements of Bellzone Mining plc.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 DECEMBER 2014

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2014

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2014

Independent Auditor's Report

We have audited the financial statements of Bellzone Mining plc for the year ended 31 December 2014 which comprise the Consolidated Statement of Financial Position, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the Consolidated Cash Flow Statement and the related notes to the audited accounts. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards ("IFRS") as adopted by the European Union.

This report is made solely to the company's members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Directors' Responsibilities Statement set out on page 17, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and nonfinancial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Basis for qualified opinion on financial statements

Forécariah JV

The Company holds a 50% interest in the Forécariah Joint Venture, a company that has invested in an iron ore project located in Guinea. This investment was fully impaired during the year ended 31 December 2013. In 2014, the Company has continued to experience difficulty in obtaining timely or accurate financial reporting from the joint venture which is necessary to enable Bellzone to prepare its own financial statements.

Prior year matters

With respect to the 2013 share of losses recorded from the joint venture of $28.2 million and the disclosures required by IFRS 12, the audit evidence available to us was limited. As a result of this limitation we were unable to conclude whether there is a material error in the 2013 classification between impairment and share of losses from the joint venture, as well as the comparative disclosures set out in note 6 of this announcement.

Current year matters

With respect to the disclosure of Bellzone's share of unrecognized losses for the year ended 31 December 2014 and cumulatively to that date, the evidence available to us was limited. Furthermore, no disclosure was able to be made in respect of Bellzone's share of 2014 profit or loss and comprehensive income from the joint venture. As a result of this limitation we were unable to conclude whether the joint venture interest disclosures are accurate or complete. Therefore our opinion on the consolidated financial statements for the year ended 31 December 2014 is qualified in respect of these matters.

Qualified opinion

In our opinion, except for the effects of matters described above in the Basis for Qualified Opinion paragraph, the consolidated financial statements:

• give a true and fair view of the state of the group's affairs as at 31 December 2014 and of its loss

• for the year then ended;

• have been properly prepared in accordance with IFRS as adopted by the European Union; and

• have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.

Emphasis of matter - going concern

In forming our opinion, which is not modified in this respect, we have also considered the adequacy of the disclosures made in note 2(f) to the financial statements concerning the Group's ability to continue as a going concern. The conditions described in note 2(f) indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:

• proper accounting records have not been kept, or proper returns adequate for our audit have not

• been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• we have not received all the information and explanations we require for our audit.

Steven Dobson

for and on behalf of Ernst & Young LLP

London

2 June 2015

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014

1. REPORTING ENTITY

The consolidated financial statements of Bellzone Mining plc ("the Company") for the year ended 31 December 2014 were authorised for issue in accordance with a resolution of the board of directors on 2 June 2015.

Bellzone Mining plc is a public company listed on AIM of the London Stock Exchange, and incorporated and registered in Jersey, Channel Islands. The Company's registered office is located at Standard Bank House, 47-49 La Motte Street, St Helier, Jersey, JE2 4SZ.

The consolidated financial statements of the Company as at and for the year ended 31 December 2014 comprise the Company and its subsidiaries (together referred to as the "Group"). The nature of the principal activities of the Group is described in the Directors' Report. 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.

2. BASIS OF PREPARATION

a. Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use in the European Union ("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 statements have been prepared on the historical cost basis except where indicated otherwise in the notes to the financial statements.

d. Functional and presentation currency

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

e. Critical accounting estimates and judgements

The preparation of the consolidated financial statements in conformity with IFRS as adopted for use in the European Union requires management to make judgements, estimates and form assumptions that affect the reported amounts of assets, liabilities, expenses and the disclosure of contingent liabilities at the date of the financial statements. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future and the resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the financial results or the financial position reported in future periods are disclosed below.

Exploration and evaluation expenditure

This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether extraction operations are economically viable where reserves have been discovered and whether indications of impairment exist. Any such estimates and assumptions may change as new information becomes available. Property, plant and equipment - useful lives and recoverable amount The calculation of the recoverable amount and useful life of an asset requires significant judgements, estimates and assumptions, including future demand, technological changes, exchange rates, interest rates and others.

Impairment of assets

The Group assesses each cash generating unit/investment (CGU) annually to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the fair value less costs to sell and value in use. These assessments require the use of estimates and assumptions such as long term iron ore prices, discount rates, future capital requirements, exploration potential and operating performance. Fair value is determined as management's best estimate of the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties. Fair value for mine assets is generally determined as the present value of estimated future cash flows arising from the continued use of the asset using assumptions that an independent market participant may take into account. Cash flows are discounted by an appropriate discount rate to determine the net present value.

Mine commissioning

The determination of the date when a project moves from the pre-commissioning phase to being ready for use is a key judgement applied by management. The date of commissioning has accounting impacts relating to capitalisation of costs and the treatment of revenue earned from the mine. A number of factors are considered, including whether production has reached a commercially viable level, whether major capital expenditure has ceased, and whether the asset is in the location and condition necessary for it to be capable of operating as intended by management.

f. Going concern

The nature of the Group's current activities does not provide the Group with production or trading revenues and the cash available at year end was not sufficient to see the Company's activities through to March 2015.

On 5 March 2015 the Company announced that agreement had been reached with China Sonangol whereby China Sonangol had agreed to extend and amend the terms of the loan facility previously announced on 18 August 2014 and amended on 28 January 2015 (the "Loan Facility"). The agreed amendments extend the availability period and the repayment date to 31 March 2018 and increased the total funding available under the Loan Facility from $4 million to $10 million. Bellzone has drawn down funds of $5 million under the Loan Facility, taking the total drawn to $8.5 million and leaving $1.5 million remaining available to draw. The amended Loan Facility is expected to provide Bellzone with sufficient working capital for planned activities through 2015.

The Group will require additional sources of external funding for 2016 to enable it to continue to meet its liabilities as and when they fall due or should changes to planned activities for 2015 require additional funds.

The Group has historically met its working capital requirements by raising the required capital through the placing of shares with investors or obtaining shareholder loans. The Group is evaluating strategy and its ability to secure funding that would enable it to both continue operations for the short term, and in the long term to develop the Kalia project; however, at present there are no committed funds beyond 2015. Additional funding to continue operations may be sourced from one or more of the following sources:

• placement of further securities;

• loan funds secured against assets of the Group;

• the sale of assets; and/or

• funding in exchange for an interest in the Group's projects or future production from the projects.

The Directors believe that the Group will obtain sufficient funding from one or more of the aforementioned funding opportunities. However, Group may not be able to do so and with the lack of committed funds beyond 2015 it represents a material uncertainty that may cast significant doubt upon the Company's ability to continue as a going concern beyond 2015, and therefore the Group and Company may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern. Should change in planned activities occur that requires additional funding, the Directors will secure funding for such changes before the changes are approved. Based on the current level of funding, the planned activities and the ability to fund changes in activities the Directors continue to adopt the going concern basis of accounting in preparing the Consolidated Financial Statements.

3. SEGMENT INFORMATION

The Group determines and presents operating segments based on the information that is internally provided to the Group's chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors. The Board currently considers the project level (previously the internal reporting was done on a consolidated level) and has identified four reportable segments:

• Kalia segment represents the exploration activities undertaken at the Kalia Mine;

• Forécariah segment represents the 50:50 joint venture between the Company and China International Fund Ltd (CIF) to fully fund exploration and development of a mine and infrastructure;

• Sadeka segment represents exploration activities for nickel and copper in south-east Guinea;

• Technical & Support Services represents funding, shared services, treasury and technical support delivered from Jersey, Perth (closed in 2014) and the Conakry office in Guinea.

Transfer prices between operating segments are made on an arm's length basis.

4. PROPERTY, PLANT AND EQUIPMENT

5. MINERAL PROPERTIES IN THE EXPLORATION AND EVALUATION PHASE

The above asset values relate to the mineral properties in the exploration and evaluation phase and are based on the cost of acquiring 100% of the companies holding the Kalia, Faranah and Sadeka exploration permits.

The Agreement with CIF of 2 August 2010 required certain actions to be fulfilled for the transfer of 50% of the defined Kalia II area (part of the Kalia permit) and 100% of the Faranah permit to be transferred to CIF. The prerequisite actions have not occurred and the transfers have not taken place. The permitted areas remain 100% owned by Bellzone through the relevant subsidiaries. In addition to the costs of acquiring the exploration permits through the acquisition of the subsidiaries, the statutory fees paid on the issue of the Mining Concessions (Permits) for the Kalia and Faranah areas are included.

6. INVESTMENT IN JOINT VENTURE

The Company has a 50% interest in a joint venture entity, FHPL which is accounted for using the equity method. The long term receivable relates to expenditure incurred on behalf of, assets acquired for and cash advanced to FHPL in respect of the Forécariah Joint Venture ("FJV"). The FJV stopped operating with the Ebola outbreak and has incurred significant losses on its operations to date and has yet to restart operations. The investment and the receivable were fully impaired in 2013. Consideration was given to retaining some value that could be attributed to the infrastructure assets. The Company maintains that the impairment is valid and is evaluating its future position regarding the FJV which may include selling Bellzone's interest, withdrawing from the FJV or recapitalising and continuing.

During 2014, the Group recharged certain expenses to the FJV resulting in an increase in the long term receivable from FHPL of $0.77 million and corresponding increase in impairment for the reasons noted above.