Bellzone Mining Regulatory News (BZM)

28 September 2012

Bellzone Mining plc

("Bellzone" or the "Company")

Interim operations review and condensed financial statements

for the six months ended 30 June 2012

Bellzone Mining plc (AIM:BZM) ("Bellzone" or the "Company") today announces its interim results for the six months ended 30 June 2012.

Highlights

·; Appointment of Glenn Baldwin as Chief Executive Officer

·; Kalia Mine Project

o Mining Licence granted on 11 September 2012 completing mine permitting

o Updated JORC resources demonstrate potential for approximately 1.7 billion tonnes of saleable product

o Definitive Feasibility Study completed

·; Forecariah Joint Venture

o Mining Licence granted

o Mining commenced in the period becoming Guinea's first operational iron mine

o Production ramp up and commissioning underway with first export expected Q4 2012

o Off-take agreement signed with Glencore for Bellzone's 50% allocation

o Construction on budget

·; Share buy-back programme initiated during the period

·; Cash balance US$70 million as at 27 September 2012.

The Interim Operations Review and Financial Report for the six months ended 30 June 2012 is available on

the Company's website: www.bellzone.com

Glenn Baldwin, Chief Executive Officer, commented: "To date in 2012 Bellzone has shown that the Kalia Mine Project is a significant resource and an asset that holds the potential to deliver attractive returns. In addition, together with our joint venture partners, Bellzone has proven our ability and commitment to bring a green-fields project into production and we expect to have the first commercial export of iron ore from Guinea in Q4 2012. "

Enquiries:

Bellzone Mining plc

Terry Larkan +44 (0) 1534 834 699

Canaccord Genuity Limited

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

Andrew Chubb/Tarica Mpinga

Renaissance Capital Limited

Joint Broker to Bellzone +44 (0)20 7367 7777

Rob Edwards

Tavistock (UK)

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

Overview

Bellzone Mining plc ("Bellzone" or the "Company") is a mining and resource development company, with the majority of its assets located in the Republic of Guinea, West Africa. The primary focus of the Company is to develop its two iron ore projects in Guinea. Bellzone is head-quartered in Jersey, United Kingdom and listed on AIM.

The Company's flagship project in Guinea, the Kalia Mine Project ("KMP"), is a significant iron-rich deposit with total oxide, SBIF and BIF resources of 6.57Bt. This includes a significant BIF magnetite JORC resource of 4.63Bt with an average grade of 26.15% Fe as well as an oxide and SBIF JORC resource of 413.9Mt with an average grade of 35.8%. There is a high probability the resources will be increased due to the fact the JORC-compliant resource model remains open along strike and at depth.

Bellzone completed a Definitive Feasibility Study in March 2012, which concluded that the development of the KMP is economically beneficial. The KMP is located approximately 360km from Conakry, the capital of Guinea. To access the KMP for production, new rail and port infrastructure are required. Bellzone has a Definitive Agreement ("the Agreement") with China International Fund Limited ("CIF") which contains CIF's commitment to fund and build commercially operated rail and port infrastructure that will enable Bellzone to export iron ore production from the KMP. The infrastructure is to be developed by Kalia Horizon Minerals Pte Limited ("KHM"), in which Bellzone will have a 10% carried interest and be the lowest cost user with permanent priority access. Furthermore, the Agreement gives CIF right of first refusal to purchase the KMP's iron ore production at market rates and CIF commits to providing Bellzone funding, on commercial terms, for the development of the KMP.

Bellzone and CIF have entered into a 50:50 joint venture for the development and subsequent operation of the Forécariah Project ("FP"), located 160km from Conakry. The FP has been fully funded by both parties and developed through an accelerated exploration and construction programme. The iron ore mine, haul road and port to export iron ore production from the GDC Forécariah iron permits, that lie within 80 kilometres from the Guinea coast, are expected to be completed on budget. Commissioning production commenced on schedule in Q1 2012, targeting an initial production rate of 3-4 Mtpa with first export expected in Q4 2012. The maiden JORC compliant resource is also expected in Q4, 2012.

In addition, Bellzone has completed a mapping and surface sampling programme identifying prospective nickel and copper mineralisation targets at its Sadeka Project. A VTEM aerial survey has been conducted and the drilling programme commenced in December 2011. Initial results are expected in Q4 2012.

Chairman's Statement

The start of 2012 has seen delivery of the Forécariah Project on budget and ready for commissioning on schedule. This milestone is testament to the capability of the management team. We look forward to the first export of iron ore in Q4 2012.

The Company undertook a limited share buyback during the period to demonstrate its belief in the business since the Board does not believe the current share price reflects the value of the Company's assets.

We have continued to grow the resource at the Kalia Mine which has now received its Mining Licence, completing the permitting requirements for mine production. The Kalia Mine DFS was completed and announced shortly after period end. The focus will now be to increase the oxide and supergene resource, given it overlays the magnetite and therefore can be mined first and produced with less on-mine infrastructure. Furthermore the Company aims to optimise the potential of the Mine through the study of various production ramping scenarios as well as cost and benefit trade-off studies and to determine a start-date for the commencement of the rail and port infrastructure construction with China International Fund Limited.

I look forward to updating shareholders on our 2012 focus areas which include:

·; Development of the Forécariah Joint Venture ("FJV") to ship first production in 2012. The management team needs to transition from project to operational conditions with a focus on cost management and, ultimately, returns to the shareholders;

·; Publication of the maiden JORC resource for the FJV;

·; Assessing the separate DFS for Kalia rail and port infrastructure being completed by CIF;

·; Progress the financing structure for Kalia Mine;

·; Continuing the development of the Kalia oxide and magnetite resources; and

·; Commencing works to implement the Kalia Mine project plan, including the rail and port development.

I was pleased to welcome Mr Glenn Baldwin to the Board of Directors as the new CEO with effect from 3 September 2012. Mr Baldwin has extensive experience in mining projects and operations, including locations in West Africa. Mr Zuks, the outgoing CEO and major shareholder, will remain on the Board to provide continuity of relationships with the Government of Guinea, CIF and other key stakeholders. In addition, as the Company continues its evolution into a large scale miner, the Board is reviewing candidates for non-executive directorships. I look forward to working with Mr Baldwin and the Board in delivering the Company's key objectives.

Michael Farrow

Chairman

Operational Report

Introduction

In 2012, Bellzone focused on delivering a definitive feasibility study for its 100% owned Kalia Mining Project, developing the Forécariah mine to production status and further exploration work for the Sadeka Project.

The Kalia DFS was delivered to the marketplace in July 2012 and the positive financial model concluded that the project would be value accretive to Bellzone. The US$1.7 billion funding estimate required to complete the estimated US$4.4 billion capital cost for the project appears justified on the basis that rail and port infrastructure are constructed by a third-party and Bellzone pays for use of such infrastructure. Resource development work has continued to increase the level of confidence in the JORC compliant mineral resources. Post period end, Mining Permits were approved by the President of Guinea for both the Company's Kalia Mine Project and the FJV projects.

2012 has seen very good progress made in the development of the FJV with staff from Bellzone and our partner CIF working together to deliver Guinea's first operating iron mine. The decision in principle to develop the project was taken in January 2011 and commissioning production started in March 2012, half-way through this reporting period. The first shipment of iron ore and the maiden JORC compliant resource statement are planned for Q4, 2012.

Further exploration work was undertaken at Sadeka with preliminary results due before the end of 2012, while a decision to close down the Mali activities was taken due to the results reported from geological studies.

Bellzone in Guinea

Bellzone manages its iron ore and nickel/copper exploration operations from its country head office in Conakry. This office provides logistical support for site-based activities, Government liaison, and financial and human resource services associated with the Guinea registered Bellzone subsidiary companies.

The Bellzone permits are located east of Conakry and accessed by an existing bitumen road.

·; The Kalia Iron Permit covers an area of 573km2 and is located approximately 360km east of Conakry. Kalia has received all relevant mining permits. 50% of the fully permitted Kalia II strike is to be assigned to CIF in accordance with the terms of the Company's definitive agreement with CIF.

·; The Faranah Iron Ore Permit located immediately adjacent to the east of the Kalia Iron Permit covers an area of 808km2. The Faranah Iron Ore Permit has all relevant mining permits in place and is to be assigned to CIF in accordance with the terms of the Company's definitive agreement with CIF.

·; The Sadeka Prospecting Permit is located approximately 150km south-east of Kalia and is centered on the town of Albadaria. The Sadeka Prospecting Permit covers an area of 2,086 km2 with the rights to explore for Ni, Cu, Co, Mn, Pt and Cr and has been renewed by Bellzone through to November 2014.

Guinea has a long history of mining. The Government of Guinea has reviewed the Mining Code that had been in place since 1995 and the new Mining Code of 2011 is now in effect, albeit with some tax provisions being under review following consultation with mining companies. The terms of the Mining Convention (Terms & Conditions) for the Kalia Mine were finalised in July 2010 after three months of negotiation with a multi-disciplinary committee appointed by the Government of Guinea. The Mining Convention grants and guarantees Bellzone the right to extract, process, treat, transport, export and sell iron ore from the Kalia Mine Licence area and defines the legal, administrative, financial, tax, customs, mining, environmental and social conditions according to which the State and Bellzone shall manage their relationship and conduct business. The Mining Convention is based on the 1995 Mining Code, which was in effect at the time of the Convention submission.

The Mining Permit for the FJV, received on 4 September 2012, is subject to the conditions of the 2011 Mining Code.

Health and Safety

The Company has developed a good safety culture and has operated in Guinea since 2007 without a serious injury in the workplace. It was therefore disappointing to record our first lost-time injury during this reporting period; a broken ankle. We will continue to focus on each individual being trained in, and adhering to, approved Health, Safety and Environmental management plans and processes that include correct use of personal protective equipment and the importance of personal health and hygiene.

Our activities are focussed on every person being capable of risk assessment, hazard identification and taking appropriate control actions. Management has a programme of continual monitoring and review to provide an environment for processes to be effectively implemented. A Job Safety Assessment programme has been implemented to define safe work procedures for higher risk tasks prior to them being undertaken. The JSA is directly linked to the personal risk management ethos adopted and is used as an educational tool to increase safety awareness for the individual when conducting specific tasks.

Effective disease vector control measures within our Malaria Control Policy, which includes regular fogging, drainage and water exposure management, have resulted in a significant decrease in cases of malaria on site, which in turn has increased productivity and wellbeing amongst our employees.

Together with the Government of Guinea, Bellzone has committed to provide employees with vaccinations against Meningitis, Typhoid fever, Tetanus, Hepatitis B and Yellow fever. The programme is administered through the Government departments of Labour and Health. All employees are entitled to participate and demand has been high, with the first group of employees receiving their vaccinations in December 2011 and the remaining participants in February 2012.

Host Communities

The support of local communities is important in creating a positive operating environment. Bellzone has been successful in working with the local communities and Government to effectively communicate the positive socio-economic benefits of our presence in our host communities. Our strategy centres on continuous community communication, involvement of the community in local commercial and employment opportunities, and active engagement on interface areas of traditional community activities and project activities. Goods and services are sourced locally where possible and employment opportunities are provided to the local community.

The Company continues to focus on employment of people from local communities as a priority.

SGS Environment conducted the SEIA studies for the Kalia Mine completing their work in Q2 2011. The studies have established socio-economic baseline data on which the community development plans have been based.

Environment

Bellzone recognises that the activity of mining alters the local environment and as such the Company works effectively with the appropriate government departments to manage the environmental impacts associated with our projects.

SGS Environment completed the EIA for Kalia in Q2 2011 which was approved by the Government of Guinea departments in Q4 2011. A comprehensive set of environmental standards, procedures and practices are implemented and monitored through dedicated environmental staff to ensure the effective management of environmental impact.

Resource development standards

All resource development work is undertaken by experienced geologists to the standards required to support JORC resource statements. Bellzone continues to invest in the development of in-house geological expertise to include the capability to develop internal resource and grade models. The addition of this capability allows the Company to optimise exploration programmes and develop and define, to JORC standards, in-house resource estimates and forecasts.

CSA Global is Bellzone's independent geologist consultant.

Kalia Mine Project

The resource development for the Kalia Mine Project is managed from an established exploration camp on the Kalia site, where all drilling and initial geological data collection occurs.

Since commencement of work at Kalia in 2007, Bellzone has drilled more than 164,409m in 1,702 drill holes and sent 47,885 samples for analysis. Test work to date indicates that the oxide, SBIF and magnetite mineral resources can be beneficiated at a relatively low cost to provide a high grade iron ore product. This test work indicates the current JORC mineral resource has the potential to deliver approximately 1.7Bt of high grade saleable iron ore concentrate product:

Magnetite 

The Kalia BIF magnetite deposit is amongst the largest in the world. The magnetite strike on the Kalia mining licence area has been measured along 39km (Kalia I - 19km and Kalia II - 20km). The JORC resource is measured along just 7km of the 100% Bellzone owned 19km Kalia I strike which hosts 4.63Bt BIF magnetite JORC at 26.15% Fe resource; open at depth.

Bulk test work studies confirm that the magnetite produces a +68% Fe low deleterious element concentrate. A pelletisation study of the Kalia magnetite concentrate was completed by METSO in the United States of America in 2012. A good quality competent pellet was produced with sulphur burn off occurring during the process.

Bellzone will continue with the magnetite resource infill and extension DD programme with the intention of increasing the confidence levels in resources for an updated JORC compliant statement in Q4 2012.

Oxide & SBIF

The Company's development programme is seeking to significantly increase the oxide resource from five key areas that account for 63% of Kalia's 55km2 surface oxide potential.

The SBIF resource lies over the magnetite in the JORC resource. SBIF is a partially oxidised magnetite between the magnetite BIF and the surface oxide JORC zone. The SBIF resource is 98.6Mt with an average grade of 35.9%. Metallurgical test work has shown the material to readily upgrade to a product with an average grade of 60.9% Fe. Metallurgical test work undertaken in Q4 2012 will further refine recoveries and product grade from the SBIF while the current diamond drilling programme will help define the full extent of the SBIF mineralisation in the area.

The Company expects to blend the oxide and SBIF products in the ratio of 30% SBIF and 70% oxide to produce a product with the specification set out in the table below. The objective of the current resource development programme is to define sufficient oxide and SBIF resource to support at least 10 years of production at the rates specified in the Kalia Mine DFS.

Forécariah Joint Venture

Bellzone and CIF established a 50:50 Joint Venture to explore and develop iron ore permits held by GDC in the Forécariah region lying within 80kms of the Guinea coast.

During the accelerated exploration programme the regional geology (1,088km2) was mapped at 1:50,000 and detailed geological mapping on areas of interest were mapped at 1:10,000 and 1:2,000 scales. The detailed mapping was focused on the Yomboyeli and Moussaya prospects at Forécariah. Wide spaced ground magnetics surveys (1:50,000 scale) covering 650km2 were completed with further close-spaced surveys conducted on the Yomboyeli and Moussaya prospects.

Based on the geological mapping and geophysics, the resource development drilling has focussed on the Yomboyeli and Moussaya prospects. Since the initial assessments in Q1 2011 more than 76,600m of RC drilling and over 20,800m of DD have been completed.

Following positive results from an initial assessment by the consulting geologist of the Forécariah exploration areas in January 2011, Bellzone and CIF announced on 31 January 2011 that they had agreed to implement an accelerated programme to develop an iron ore mine at Yomboyeli with the associated export infrastructure. The FJV focussed on a known high grade zone through an RC drilling programme which delineated 2Mt of DSO quality material, sufficient to support the first year of production while additional resource development work takes place to support an extended life of mine. Project design activities commenced in March 2011. In parallel a Beijing office was established, in June 2011, to oversee procurement and detailed design. The design strategy was based on using proven technology and methods in a scalable manner to enable achievement of the fast track timeline and reduce future operating risk. Works commenced in Q2 2011 with initial clearing and grubbing of roads, with site and construction starting in Q3 2011.

The project was ready to commence commissioning on schedule in March 2012 at the Yomboyeli project site. Ramp up commissioning activity began on 21 May 2012 following authorisation to commence production from the Minister of Mines and Geology. The Mine Permit was received on 4 September 2012 and the FJV is intending that the first export of iron ore will take place in Q4 2012.

The capital cost of the initial high grade 4Mtpa construction project (Phase 1) with the related resource development and supporting studies was estimated at $232m by the Bellzone project team in Q1 2011 (50 per cent of which is payable by the Company). With over 90% of the Phase 1 construction costs committed and Phase 1 resource development completed, the costs of the project are forecast to be delivered on budget.

The open pit mining at the Forécariah deposit uses conventional drill, blast, load and haul techniques with run of mine ore being fed to crush and screen processing plants. Higher grade, saleable product is trucked to the port using 104 tonne prime mover and side-tip trailers while the lower grade product will be stockpiled for processing through beneficiation plants to upgrade it to a saleable product. The new beneficiation plant(s) is planned to be constructed in 2013 (Phase 2).

The road haulage and trans-shipping system is expected to be replaced in the long term with the multi-user rail and port infrastructure strategy adopted by Guinea.

The FJV intends to process the lower grade oxide at Yomboyeli central (Phase 2) to maintain the 4Mtpa production after the higher grading ore has been depleted. Phase 3 production will target the Layah surface oxide ore. Phase 4 is planned, to target the surface oxide zone identified at Yomboyeli West. The FJV is currently working to convert its current internal estimate on 122Mt of surface oxide to JORC standards to support 6 to 8 years of operations.

The test work and feasibility study for Phase 2 is planned for completion by H1 2013, with plant commissioning completed in time for upgrading the low grade oxide fines to a product grade of +58% Fe. It is expected that the new plant will use standard gravity separation technology. Bulk test work is underway to finalise the process design criteria. Subject to further definition in the feasibility study, the preliminary estimate of additional capital expenditure for the Phase 2 expansion is approximately $80m. This capital expenditure is expected to be funded from Forécariah operational cash flow.

The FJV believes that the identification of large zones of haematite schist ore have the potential to take the operations beyond 2021 after mining of the known surface oxide ore has reached conclusion. Drilling is underway to establish a JORC resource and studies are currently at a conceptual stage.

A trans-shipping port facility with an installed capacity of 8Mtpa has been constructed at Konta on the Mellacoree River in Guinea. Konta is located approximately 80km from the Forécariah mine. The iron ore product is stockpiled at the port and is then loaded onto bulk handling barges which are towed down the river and out to sea by tug to the awaiting Panamax ship moored in deep water. The Panamax, owned by FJV, will receive product from the barge and then load ships, up to Cape size, using four grab cranes and conveyor discharge infrastructure.

In August 2012, a life of mine off-take contract was completed with Glencore for the 50% of production attributable to Bellzone. As part of the FJV Agreement, CIF have tag along rights should it elect to use the same arrangements.

Sadeka Nickel/Copper Project

Sadeka SARL is a 100% owned subsidiary of Bellzone Mining plc. An exploration camp at Albadaria accommodates 20 people and is located approximately 56km north of the town Kissidougou and 150km seat south east of the Kalia Mine.

The Sadeka Prospecting Permit is underlain by Archaean granite gneiss basement of the Dabola Group, greenstones of the Cambui Series and Late Archaean to Mesozoic intrusions of mafic, ultramafic, granitoid, pegmatite, gabbro and dolerite composition. The prospective rock units belong to the Cambui Series which contains nickel and copper bearing pyroxenites.

The Company completed a VTEM helicopter geophysical survey covering 1,370km2 in 2011. The results of the survey have been verified with ground inspections and an exploration programme designed to assess the most prospective targets has been implemented. A new DD rig and support vehicles have been deployed at the exploration programme which commenced in Q1 2012. Drilling at the first target intercepted sulphide occurrence up to 20%. Assay and interpretation results are expected in Q4 2012.

Bafing evaluation

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.

Cash

The Company had $100.7 million in cash and cash equivalents on hand at period end and $70.3 million at the time of this report. The cash outflows have largely related to statutory fees related to the Kalia Mine permit ($6.9 million), funding the FJV ($18 million) and on-going activities of the Company making up the balance of $5.5 million.

The contributions to the FJV are nearing completion as first shipment is expected and the on-going costs for Bellzone's Kalia activities are mostly at the Company's discretion.

The management of cash and cash equivalents is a focal point for the Company and close control is exercised by management. Detailed budgets and expenditure authorisation processes exist to ensure all funds are applied only to planned and unplanned activities that contribute directly to the achievement of the Company objectives.

Glenn Baldwin

Chief Executive Officer

Principal activity

The principal activity of the Company and its subsidiaries (together referred to as "the Group" and individually as "Group entities") is the exploration and development of resources, primarily at its flagship Kalia Iron Project in Guinea, West Africa with additional activities being undertaken at the Sadeka Nickel / Copper Project (Guinea) and Forécariah Joint Venture (Guinea).

Dividends

No dividends have been paid or are proposed for the period (2011: nil).

Review of operations

The Group had an operating loss for the six months ended 30 June 2012 of $26.0m (30 June 2011: loss $18.8m).

Significant events and key changes in the state of affairs during the period

On 30 January 2012 the Directors nominated 15,138,160 shares to be issued to employees over the next four years in terms of the Rules of the BESP and recognised a share-based payment expense of $3,472,148.

Matters subsequent to the period end

1. Share repurchase programme

On 27 June 2012 the Company announced a share repurchase programme whereby shares are to be repurchased for a maximum consideration of $3,000,000. As at 30 June 2012 2,097,429 shares has been repurchased for an average price of 16.88 pence per share. At the date of this report this has increased to 11,005,130 shares for total consideration of $2,893,154.

At the date of this report the number of ordinary shares in issue is:

2. Forécariah Joint Venture Off take agreement

A life of mine off take contract has been signed with Glencore International AG for the company's 50% share of the production from the Forécariah Joint Venture.

3. Sign on options

6,000,000 share options to be issued to Glenn Baldwin on the next three consecutive anniversaries of the commencement of his employment with an exercise price equal to the market rate on the day of issue under the Executive Share Option Scheme.

4. Kalia Concession (Mining Licence)

A fee of $6.9 million was payable upon completion of the mine permitting process for Kalia.

5. Forécariah Mining Permit

The fee for the Forécariah Joint Venture permit has not yet been determined because of the transfer implications. However, it is estimated that the Company's portion to be contributed through the FJV will be $4 million.

Statement of Directors' Responsibilities

The Directors confirm that, to the best of their knowledge, the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting', and that the interim operations report includes a fair view.

This report is made in accordance with a resolution of the Directors.

Michael Farrow

Chairman

27 September 2012

Independent Review Report to Bellzone Mining plc

Introduction

We have been engaged by the Company to review the condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 30 June 2012 which comprises the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of consolidated financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with International Accounting Standards 34, "Interim Financial Reporting," as adopted by the European Union.

As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of consolidated financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standards 34, "Interim Financial Reporting," as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of consolidated financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union.

Ernst & Young LLP

London

27 September 2012

Condensed Consolidated Statement of Financial Positionas at 30 June 2012

The condensed consolidated financial statements were approved by the Board of Directors and authorised for issue on 27 September 2012.

Condensed Consolidated Statement of Comprehensive Incomefor the six months ended 30 June 2012

Condensed Consolidated Statement of Changes in Equityfor the six months ended 30 June 2012

Condensed Consolidated Statement of Cash Flowsfor the six months ended 30 June 2012

Glossary

The following terms used throughout the report are defined:

BIF - Banded Iron Formation

Bt - billion tonne

CEO - Chief Executive Officer

CIF - China International Fund Limited

Co - Cobalt

Cr - Chromium

Cu - Copper

DD - Diamond core drilling

DFS - Definitive Feasibility Study

DSO - Direct Shipping Ore

EIA - Environmental Impact Assessment

Fe - Iron

FJV - Forécariah joint venture

GDC - Guinea Development Corporation SA (a subsidiary of CIF)

JORC - Australasian Joint Ore Reserves Committee resource estimation code

JSA - Job Safety Assessment

km - kilometres

km2  -square kilometres

LTI - Lost Time Injury

m - metres

M&I - Measured and Indicated

M&I&I - Measured, Indicated and Inferred

Mn - Manganese

Mt - million tonne

Mtpa - million tonnes per annum

Ni -Nickel

RC - Reverse circulation drilling

SBIF - Supergene Banded Iron Formation

SEIA - Socio-Economic Impact Assessment

Pt - Platinum

$ - United States Dollar