Bellzone Mining Regulatory News (BZM)

25 September 2015

Bellzone Mining plc

("Bellzone" or "the Company")

Unaudited interim results for the six months ended 30 June 2015 

Bellzone Mining plc (AIM: BZM) announces its unaudited interim results for the six months ended 30 June 2015.

Key Highlights

• Loan facility of US$4 million, previously announced on 18 August 2014 and amended on 28 January 2015 (the "Loan Facility") extended the availability period and the repayment date to 31 March 2018 and increased the total funding available under the Loan Facility from US$4 million to US$10 million (of which US$8.5m has been drawn to date)

• Restoration of trading on AIM of the Ordinary Shares of no par value in Bellzone ("Ordinary Shares")

• Strategic review highlights the nickel potential within the iron ore resource in the northwest area of Kalia

Financing activities

The previously announced iron ore JORC Reserve remains Bellzone's key asset. However, current commodity pricing and availability of finance to develop greenfield iron ore projects in challenging environments is not conducive to funding the Kalia project as defined in the independent Bankable Feasibility Study ("BFS") announced in September 2013.

The strategic review conducted by the Company during the first half of 2015 resulted in the announcement of the nickel potential within the iron ore JORC Reserve and Resources. This presents an opportunity to bring Kalia into production despite the challenges presented by the current state of financial markets, lower iron ore prices and infrastructure limitations for the production and export of bulk materials in Guinea. Nickel pig iron or ferronickel production will not require large-scale investment in infrastructure.

The Company believes that completing the study on developing Kalia through the on-site processing of iron ore to produce nickel pig iron or ferronickel will present the best opportunity to secure financing that will lead to the full development of the Kalia iron ore mine.

Costs

The Company has reduced operating costs by a further 47.5% and cash outflows from operating activities by 42% compared to the same period in the previous year due to further changes in the Jersey corporate and Perth office operations. Expenditure is currently focused on developing the strategic study whilst ensuring:

• Equipment is under care and maintenance;

• Security is in place to prevent theft and damage to assets;

• Minimised impact on Guinean national staff with no lay-offs; and

• No compromise to statutory or regulatory compliance processes

Enquiries:

http://www.bellzone.com

Condensed Consolidated Statement of Financial Position

At 30 June 2015

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2015

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2015

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Condensed Consolidated Cash Flow Statement

For the six months ended 30 June 2015

The above consolidated cash flow statement should be read in conjunction with the accompanying notes.

Notes to The Unaudited Interim Condensed Consolidated Financial Statements For the six months ended 30 June 2015

1. Reporting Entity

The condensed consolidated interim financial statements of Bellzone Mining plc ("the Company") for the six months ended 30 June 2015 were issued on 25 September 2015 in accordance with the authority of a resolution of the board.

Bellzone Mining plc is a public company listed on the AIM Market 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 condensed consolidated financial statements of the Company as at and for the six months period ended 30 June 2015 comprise the Company and its subsidiaries (together referred to as the "Group").

The nature of the principal activities of the Group is the exploration and development of resources, primarily at its flagship Kalia Iron Ore Project in Guinea, West Africa, with additional activities being undertaken at the Sadeka Nickel/Copper Project and the Forécariah Joint Venture ("FJV"), both in Guinea. 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.

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 interim condensed consolidated 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. Going concern

The current nature of the Group's activities does not provide the Group with production or trading revenues.

On 5 March 2015 the Company announced that agreement had been reached with China Sonangol International (S) Pte Ltd ("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 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. 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, the 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 any 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 condensed consolidated interim financial statements.

3. 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 China International Fund ("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.

4. INVESTMENT in joint venture

The Company has a 50% interest in a joint venture entity, Forécariah Holding Pte Ltd ("FHPL") which is accounted for using the equity method. The FJV stopped operating with the Ebola outbreak and the fall in iron ore prices 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.

The Company is not responsible for the accounting and financial (reporting and control) processes of the FJV. The Company does not assert that the same level of control and financial reporting accuracy that the Company has in place exists within the FJV. The accuracy of the results of the FJV has no impact on the results of the Company as the Company has fully impaired its investment in the FJV.

The Company has no further capital commitments or contingent liabilities in respect of the FJV as at 30 June 2015 and has not entered into any such further capital commitments or contingent liabilities since then.

5. Issued capital

The Company is a no par value company. No share issued by the Company shall have a par value.

There is no limit on the number of shares which may be issued by the Company, subject to shareholder approval, and if the share capital structure of the Company is at any time divided into separate classes of share there is no limit on the number of shares of any class which may be issued by the Company.

Subject to the provisions of the Companies (Jersey) Law 1991 (as amended) (the "Companies Law") and the Articles of the Company and without prejudice to any rights attached to any existing shares or class of shares, any share may be issued with such rights or restrictions as the Company may by ordinary resolution determine or, subject to and in default of such determination, as the Board shall determine.

The Company may, pursuant to the Companies Law, issue fractions of shares and any such fractional shares shall rank pari passu in all respects with other shares of the same class issued by the Company.

The Company shall maintain a stated capital account in accordance with the Companies Law for each class of issued share. A stated capital account may be expressed in any currency determined by the Board from time to time.

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

The Group is in a project development stage and did not declare or pay any dividends during the period (2014: nil).

6. Reserves

7. Events occurring after the reporting period

There were no significant events occurring after the balance sheet date and the date of this report.

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