Bellzone Mining Regulatory News (BZM)

30 September 2013

2013 Bellzone Mining plc

("Bellzone" or "the Company")

Interim operations review and condensed financial statements

for the six months ended 30 June 2013

Bellzone Mining plc (AIM:BZM) ("Bellzone" or the "Company") today announces its interim results for the six months ended 30 June 2013.

Highlights since announcement of annual results on 24 June 2013

· Kalia updated JORC resource statement

˗ High grade Indicated and Inferred Mineral Resource of 124.2 million tonnes ("Mt") at 53.5% iron ore ("Fe")

˗ High grade oxide style resource converted from Inferred to Indicated level of 72.8Mt at 53.7% Fe

˗ Total Oxide and supergene banded iron formation ("SBIF") Indicated and Inferred Mineral Resource increase of 11% to 913.2Mt at 36.3% Fe

˗ Total Oxide and SBIF Indicated Mineral Resource increase of 268% to 264.6Mt grading at 39.8% Fe; previously 72Mt at 37.8% Fe

˗ Magnetite Banded Iron Formation ("BIF") resource from 4.63bt at 25.9% to 4.72bt at 29.3% Fe

· Kalia maiden reserve statement

˗ Maiden Probable Reserve of 59.8Mt at 54.1% Fe within the high grade Indicated Oxide and SBIF Mineral Resource

˗ Ore Reserves derived from Indicated Resources of 72.8Mt at 53.7% Fe, included in the Indicated and Inferred Mineral Resource Inventory of 124.2Mt of +48% Fe at an average grade of 53.5% Fe

· Kalia Project 1 ("KP1") Bankable Feasibility Study ("BFS")

˗ Full production expected to be 7 million dry tonnes per annum ("Mtpa") of a 58% Fe

˗ KP1 has an IRR of 37.5% and NPV10 of US$1,387 million based on the average TSI 58% CFR North China price over 30 days to 16 September 2013 of US$127.70/t and assuming shipping costs of US$20/t. If the Free On Board ("FOB") sales price achieved for the KP1 product over the life of mine reduced by 25% from the mid-September 2013 equivalent price, the NPV10 would be US$566 million and the IRR 23%

˗ Total capital cost of US$865 million with scope for reduction through value engineering studies

˗ FOB cost of US$34.39/t, including all in-country fixed and variable operating costs

˗ The FOB break-even Fe price is US$51.71/t FOB

· Cash balance US$9.44 million as at 20 September 2013

Glenn Baldwin, Chief Executive Officer said that while the first half of 2013 has had its challenges, the Company has delivered a very positive BFS for its flagship Kalia Project.

"Management continues to work as hard as possible to secure the funding for the Kalia Project and looks forward to updating the market in due course," he said.

The Interim Operations Review and Financial Report for the six months ended 30 June 2013 is available on the Company's website www.bellzone.com

Enquiries:

About Bellzone Mining plc

Bellzone Mining plc ("Bellzone") is an exploration and resource development company with iron ore ("Fe") and nickel/copper permits in the Republic of Guinea, West Africa. Bellzone's flagship project, Kalia, contains JORC-compliant resources of 913.2 million tonnes at 36.3% Fe of oxide and supergene banded iron formation, including 124.2 million tonnes at 53.5% Fe, and a globally significant magnetite resource of 4.72 billion tonnes at 29.3% Fe. There is a Probable Reserve of 59.8Mt at 54.1% Fe within the high grade indicated oxide mineral resource which underpinned a BFS for Kalia Project 1 ("KP1") released via an RNS announcement on 17 September 2013.

Bellzone and China International Fund each hold a 50% investment interest in the holding company of the joint venture operations at the Forécariah iron ore mine which commenced production in May 2012.

Please see RNS announcements of 26 August and 13 September 2013 for Mineral Resources and Ore Reserves respectively.

Chairman's statement

The period since my last statement has seen our Company achieve significant deliverables in the form of a major updated JORC-compliant statement for our wholly-owned Kalia Project; and a subsequent very positive technical study done to a bankable level for the development of KP1.

The significance of these two deliverables, particularly the BFS, becomes apparent when one considers that the huge potential of Kalia was ascribed very little, if any, value by the markets because it was considered stranded. We now have an independent study that confirms our long held view that Kalia is a world-class iron ore deposit that is deliverable to market via a staged approach.

The Forecariah JV operation sent its maiden shipment from the port of Konta in December 2012. Bellzone provided production and shipping guidance to the market after the operations management tabled its first plan in March 2013. As was disclosed to the market on 11 September 2013, recent developments indicate that guidance will not be met and the Company will issue revised guidance at the earliest opportunity.

2013 has not been easy with the Bellzone share price reacting to the difficulties encountered with production and shipping at the Forecariah JV. I support the management teams' efforts in maintaining their focus through the establishment of clear deliverables and working hard to meet these targets.

On a more positive note, I am delighted with the release of the Kalia BFS. We are in discussions with a number of parties on funding options and our management team is to be commended for their efforts over the past eight months in delivering a study which can underpin funding. Our cash position is sufficient for Bellzone to operate through to Q2, 2014 and we will update the market on funding in due course.

We thank shareholders for their active interest in the Company and look forward to the next phase for Bellzone.

Michael Farrow

Chairman

30 September 2013

CEO Review

Kalia

The Company is very excited by the opportunities identified in the BFS for the Kalia Project. To date the Kalia Project may have been considered by the market to be a stranded asset requiring a bulk infrastructure solution. However, the focus of Bellzone in 2013 has been to develop the resource and the business case so that Kalia can be developed and value realized for Bellzone shareholders from this significant resource base.

The potential of the higher grading oxides at Kalia was identified during an early review of the Company following my appointment some 12 months ago. The review identified that the size and quality of the resource detailed in previous announcements had not been isolated as a number of discrete resources on which to found a business. As such a project to develop a bankable feasibility study ("BFS") for Kalia using recognized independent consultants was initiated in December 2012.

As was disclosed to the market on 17 September 2013, the BFS was undertaken on Kalia's high-grade Oxide Mineral Resources and led by world-renowned engineering firm, Fluor. Bellzone commissioned the BFS to international standards to include all capital and operating costs.

The KP1 production profile is supported by the high grade oxide JORC compliant mineral resource of 124.2Mt at 53.5% Fe. Bellzone announced its maiden JORC compliant probable reserve of 59.8Mt at 54.1% Fe which underpinned the BFS with reserve level confidence for at least the first six years of production of the estimated 10 year life of mine of KP1, with a capital payback period of approximately four years.

The study provides for an infrastructure solution that will support the development of a Trans-Guinea railway system for the export of bulk commodities and Kalia production can be significantly scaled up on completion of the bulk haulage railway network.

Highlights of the BFS are:

· Free On Board cost of US$34.39/t, including all in-country fixed and variable operating costs

· The break-even price is US$51.71/t FOB

· Full production will be 7 million dry tonnes per annum of a 58% iron -6mm fines product for the first 10 years

· KP1 has an IRR of 37.5% and NPV10 of US$1,387m based on the average TSI 58% CFR North China price over 30 days to 16 September 2013 of US$127.70/t and assuming shipping costs of US$20/t. If FOB sales price achieved for the KP1 product over the life of mine reduced by 25% from the price at current mid-September 2013 equivalent price, the NPV10 would be US$566m and the IRR 23%

· Total capital cost of US$865 million (capital intensity of US$14.49 per total reserve tonne and US$123.57 per annual tonne of production)

· The value engineering studies are expected to reduce the total capital cost

· Kalia Phase 2 ("Kalia Project 2" or "KP2"), planned to be funded by KP1 cash flows, requires additional process facilities to treat lower grade oxide and is expected to extend the current life of mine by 15 years

The BFS capital cost of US$865 million yields strong economic returns for the first phase of developing Kalia proving KP1 as a viable project in its own right with all associated infrastructure costs.

The KP1 BFS has stimulated significant interest for participation and funding from various parties. The focus is now on finalizing development and financing structures to bring KP1 to production.

Exploration and Resource Development

Exploration

The basis for KP1 has been the sound geological development work conducted at Kalia since 2007. The exploration programme during 2013 focused on developing the higher grade oxide at Kalia with an intense reverse-circulation drilling programme and the upgrading of the magnetite resource through the diamond drilling programme.

Kalia 1 Oxide Development

A total of 37,756 metres for 548 holes with 21,433 assays was completed in the first half of 2013. This increased the indicated oxide resource from 822.6 Mt to 913.2 Mt, with the indicated resource increasing from 87.5 Mt to 264.6 Mt.

Kalia Magnetite

The infill diamond drilling programme, completed in December 2012 and analysed during the period, has not only increased the magnetite resource classification of measured whilst maintaining the tonnage totals of the total measured and indicated resources, but has also increased the overall tonnage of the magnetite resource which has allowed the cut-off grade of 5% Fe previously used to be increased to 20% Fe. This has resulted in a substantial average resource grade increase from 25.9% Fe to 29.3% Fe, and increasing the overall magnetite resource to 4.72 billion tonnes.

Kalia Geotechnical Investigations

In support of the KP1 BFS a geotechnical scope of work was developed to cover the identified plant and infrastructure locations. The Bellzone personnel and diamond drill rigs, under the supervision of Coffey mining, were used to undertake the required geotechnical investigations.

Sadeka exploration

Sadeka operations ceased for the scheduled wet season break. During the wet season the Government of Guinea announced a review of all exploration permits. Management took the decision to suspend operations until certainty of tenure was established and this break has not impacted on the overall delivery of the Sadeka exploration. Full clearance to continue operations was received just prior to the commencement of the 2013 wet season. No updates on Sadeka are expected in the short term.

Health and Safety

During the first half of 2013 the focus for health and safety has been on continuing the revised training and continuous improvement regime established by Bellzone during 2012. Monthly safety education campaigns target themes that support the overall strategy.

Monthly safety campaigns included;

· Brother Keeper

· Arrive Alive

· Barricading - Don't Cross the Line

· Safety is in my Hands

· Eye Safety

· Speed Kills

· Drivers Life Saving Rules

· Fight the Bite - Malaria

· Defensive Driving

The effort to date has led to an improvement in overall safety as evidenced by decrease in safety incidents. Total Reportable Injury Frequency Rate indicates the number of injuries per 250,000 man hours and 1 million man hours. The rate at the end of the period was 7.35 reportable injuries every 250,000 man hours and 29.42 every 1 million man hours.

During the reporting period no lost time injuries were recorded.

Forecariah Joint Venture ("JV")

The operations at the JV shipped first production at the end of 2012. In January the maiden JORC compliant mineral resource estimate for the operation was announced and the operations management team developed the production and cost plan for 2013 which was finalised and announced in March 2013.

As was disclosed to the market on 11 September 2013, the originally expected shipping targets are no longer achievable due to wet ore handling issues, the performance of the trans-shipping contractor and weather conditions.

The operations have shipped some 270,000 tonnes to date and have approximately 250,000 tonnes of partially and fully processed stockpiles. The JV will continue to mine and stockpile material while the shipping issues continue to be resolved. In the short term, a small technical team from Bellzone is assisting at the JV operation while additional expertise is being brought into the management team.

The JV has provided invaluable insights into issues that have been raised and addressed in the KP1 BFS. The value of the JV operation in the context of KP1 extends beyond the provision of part of the export road and the practical experience of the conditions for shipping from Konta. Bellzone looks forward to leveraging off all of its experiences in Guinea as it works towards developing Kalia.

Finances

The BFS for KP1 makes a strong case for the development of Kalia. The strategic imperatives add to the strength of the business case. As has been stated by the Bellzone senior management team previously, it is clear that the development of Kalia will require additional funding.

The 2012 Annual Report stated that the Board of directors approved a reduction in drilling activities at Kalia, given that the level and extent of the resource definition was more than sufficient to meet project study requirements; the centralisation of administration processes; measures to improve procurement efficiencies; and generally raised the focus on cost management. These measures ensured that the funds available at 30 June 2013 were sufficient to meet the planned activities for 2013, including the completion of the KP1 BFS, evaluation of Sadeka as well as corporate costs anticipated during the Kalia funding phase.

After meeting costs associated with these reduced activities, the cash balance at 20 September 2013 amounted to US$9.44 million, which are sufficient to support the Company's planned activities into Q2, 2014.

Glenn Baldwin

Chief Executive Officer

26 September 2013

Interim Condensed Consolidated Statement of Financial Position at 30 June 2013

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

Interim Condensed Consolidated Statement of Comprehensive Income

for the six months ended 30 June 2013

Interim Condensed Consolidated Statement of Changes in Equity for the six months ended 30 June 2013

Interim Condensed Consolidated Cash Flow for the six months ended 30 June 2013

Notes to the Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2013

1. reporting entity

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 period ended 30 June 2013 comprise the Company and its subsidiaries (together referred to as the "Group" and individually as "group entities").

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

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all of the information required for full annual financial statements and should be read in conjunction with the annual report for the year ended 31 December 2012 and any public announcements made by the Company during the interim reporting period.

The consolidated financial statements of the Group as at and for the year ended 31 December 2012 prepared in accordance with International Financial Reporting Standards as adopted for use in the European Union are available on request from the Company's registered office or at www.bellzone.com.

These condensed consolidated interim financial statements were approved by the Board of Directors on 26 September 2013.

b. New Standards, interpretations and amendments

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2012, except for the adoption of new standards and interpretations effective as of 1 January 2013.

The Group applies, for the first time, certain standards and amendments that may require restatements of previous financial statements. These include IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements,IAS 28 Investments in Associates and Joint Ventures, IAS 19 (Revised 2011) Employee Benefits, IFRS 13 Fair Value Measurement and amendments to IAS 1 Presentation of Financial Statements. As required by IAS 34, the nature and the effect of these changes are disclosed below. In addition, the application of IFRS 12 Disclosure of Interest in Other Entities will result in additional disclosures in the annual consolidated financial statements.

Several other new standards and amendments apply for the first time in 2013. However, they do not impact the annual consolidated financial statements of the Group or the interim condensed consolidated financial statements of the Group.

The nature and the impact of each new standard/amendment are described below:

IAS 1 Presentation of Items of Other Comprehensive Income - Amendments to IAS 1

The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time (e.g., net gain on hedge of net investment, exchange differences on translation of foreign operations, net movement on cash flow hedges and net loss or gain on available-for-sale financial assets) now have to be presented separately from items that will never be reclassified (e.g., actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affected presentation only and had no impact on the Group's financial position or performance.

IAS 34 Interim financial reporting and segment information for total assets and liabilities (Amendment)

The amendment clarifies the requirements in IAS 34 relating to segment information for total assets and liabilities for each reportable segment to enhance consistency with the requirements in IFRS 8 Operating Segments. Total assets and liabilities for a reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change in the total amount disclosed in the entity's previous annual consolidated financial statements for that reportable segment. The Group provides this disclosure as total segment assets were reported to the chief operating decision maker (CODM). As a result of this amendment, the Group now also includes disclosure of total segment liabilities as these are reported to the CODM. See Note 3.

IFRS 10 Consolidated Financial Statements and IAS 27 Separate Financial Statements

IFRS 10 establishes a single control model that applies to all entities including special purpose entities. IFRS 10 replaces the parts of previously existing IAS 27 Consolidated and Separate Financial Statements that dealt with consolidated financial statements and SIC-12 Consolidation - Special Purpose Entities. IFRS 10 changes the definition of control such that an investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. To meet the definition of control in IFRS 10, all three criteria must be met, including:

(a) an investor has power over an investee;

(b) the investor has exposure, or rights, to variable returns from its involvement with the investee; and

(c) the investor has the ability to use its power over the investee to affect the amount of the investor's returns.

IFRS 10 had no impact on the consolidation of investments held by the Group.

IFRS 11 Joint Arrangements and IAS 28 Investment in Associates and Joint Ventures

IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities - Non-monetary Contributions by Venturers. IFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture under IFRS 11 must be accounted for using the equity method.

The application of this new standard does not impact the financial position of the Group as the equity method of accounting.is already applied in consolidation of JCE's.

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

c. Critical accounting estimates and judgements

The preparation of the interim financial statements requires management to make judgements, estimates and form assumptions that affect the reported amounts of assets, liabilities, expenses. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statement, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and fir the year ended 31 December 2012.

d. Going concern

The results for the period 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 fund the planned activities. To date, the Group has met its working capital requirements by raising the required capital through the placing of shares with investors. The Company has raised US$327 million for operations since incorporation.

The funds available at 30 June 2013 were sufficient to meet the planned activities into Q2 2014. Those plans include completion of the BFS for Kalia Project 1 (accelerated development of Kalia), exploration and evaluation of Sadeka as well as corporate costs. The funds currently available are not likely to meet planned and likely activities for the 12 months following the date of this report.

The pace of the development of the projects is subject to a number of variables largely within the control of the Group, allowing the current cash available to fund reduced activities into Q2 2014. In the opinion of the directors, the cash is sufficient to enable the Group to finalise arrangements with one or more of the potential funding parties who have shown significant interest following the release of the BFS for KP1.

The financial statements have been prepared on a going concern basis as the directors are of the opinion that the Group has adequate resources to continue for the foreseeable future, due to the flexibility to adjust operations to suit funds, and the ability to source funding to continue with the planned exploration and project development as well as any expansion of the scope or acceleration of activity. As such the financial statements do not include the adjustments that would result if the Company were unable to continue as a going concern.

The need for additional fundraising indicates the existence of a material uncertainty which may cast significant doubt over the Company's ability to continue as a going concern, however given the reasons highlighted above, the going concern basis of accounting in preparing the financial statements continues to be adopted.

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 that makes the strategic decisions. 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 JV between Bellzone and CIF;

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

• Technical and support services represents funding, shared services, treasury and technical support delivered from Jersey, Perth and the Conakry office in Guinea.

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

Inter-segment revenues of US$11.8 million are eliminated on consolidation.

4. Investment accounted for using the equity method

The Company has a 50% interest in a JV entity, Forécariah Holdings Pte Ltd ("FHPL") which is accounted for using the equity method.

The long-term receivable relates to expenditure incurred on behalf of assets acquired for; expenses settled on behalf of and cash advanced to FHPL in respect of the JV. It is intended that the loan will be interest bearing at market rates of interest subject to finalisation of the Shareholder Loan Agreements and is expected to be recovered over two to seven years based on estimated production. The period for recovering the loan is wholly dependent on income generated by FHPL operations and the need for funds that FHPL allocates to ongoing operations and investment for the expansion of production facilities to maximise the return to shareholders.

5. Cash and cash equivalents

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one month and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

6. Share-based payment transactions

a. Share options - Executive Share Option Scheme

The following table shows the movements in the number of shares held under the share-based payment plans outstanding but not exercised:

Options issued to Bernhard Neehoff and Lyndon Calvert under the "sign on option" scheme on admission in 2010 lapsed during the period. An amount of US$396,000 was transferred to Retained losses.

During the December 2012 financial year 6,000,000 share options were issued to Glenn Baldwin, vesting in equal tranches, 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.

b. Shares

1,000,000 shares at a price of 0.01 pence will be issued to Glenn Baldwin on the anniversary of his appointment date. The fair value of the equity instruments granted was measured at the ruling share price on grant date of 14 pence per share.

c. Bellzone Employee Share Plan

The Company has established a share based plan to incentivise, reward and retain employees where the Board and executive management consider that the standard contractual terms of their employment alone cannot be relied upon to serve and promote the best interests of the Company.

The Plan is an independent non-contractual discretionary scheme.

Under the Plan, the Board has the right to make a non-binding recommendation to the Trustee that the Trustee should make an Award to an Eligible Employee. The Board will consider all aspects of an Eligible Employee's circumstances in determining whether to make a recommendation, including the Eligible Employee's performance, disciplinary record and attitude to health and safety in the workplace. The grant date under this scheme is deemed to be the date the Board has made the recommendation to the Trust and the fair value of the award is calculated based on the fair value of the equity instrument on the day the recommendation is made.

The Rules provide that the Trustee of the BESPT has the sole and absolute discretion to determine whether to make an Award to an Eligible Employee on such terms and conditions (if any) as it sees fit (and whether on the basis of a recommendation by the Board or otherwise).

The Trust has been presented as part of the Group in accordance with IFRS 10.

On 30 January 2012, the directors nominated 15,183,160 shares to be issued to employees over the next four years in terms of the Rules of the BESPT. The awards will be settled using the treasury shares of the Group. The fair value of the shares on date of issue was 29 pence per share. During the period 4,082,896 (2012: 3,191,764) shares were issued from the BESPT to settle vested awards resulting in a reduction of the treasury shares balance of US$63,000 (2012: US$53,000).

d. Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows:

7. Loss per share

8. Financial INSTRUMENTS

a. Capital risk management

The Group's objectives when managing capital are to safeguard its ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends payable to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The capital structure of the Consolidated Entity consists of equity attributable to equity holders, comprising issued capital, reserves and retained losses as disclosed in the statement of changes in equity.

The Consolidated Entity's Board of Directors reviews the capital structure on an ongoing basis. As a part of this review the Board of Directors considers the cost of capital and the risks associated with each class of capital. As needed the Consolidated Entity will balance its overall capital structure through new share issues and share buy-backs; as well as the issue of debt.

The Consolidated Entity's overall strategy remains unchanged from 2012.

The Consolidated Entity has no external debt outstanding at 30 June 2013 (2012: nil).

b. Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3 to the financial statements.

c. Categories of financial instruments

d. Financial risk management objectives

The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Group's operations expose it primarily to a variety of financial risks:

• Market risk (including currency risk and interest rate risk);

• Credit risk; and

• Liquidity risk.

This note represents information about the Group's exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout this financial report.

The Board of directors has overall responsibility for the establishment and oversight of the risk management framework, and for developing and monitoring risk-management policies.

Risk-management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk-management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Board oversees how management monitors compliance with the Group's risk-management policies and procedures, and reviews the adequacy of the risk-management framework in relation to the risks faced by the Group.

Market risk

Market risk is the risk that changes in market prices, such as foreign-exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.

(i) Foreign-exchange risk

The Group operates internationally and is exposed to foreign-exchange risk arising from various currency exposures, primarily with respect to the Australian Dollar (AUD), Pound Sterling (GBP), Guinean Franc (GNF) and Euro (EUR).

The Group's exposure to foreign currency risk at the reporting date, expressed in US Dollars, was as follows:

(ii) Interest-rate risk

The Group is exposed to interest-rate risk as the Group places cash and short-term deposits at floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating interest rates.

The Group does not account for any fixed-rate financial assets and liabilities at fair value through profit and loss due to the short-term nature of deposits. Therefore a change in interest rates at the reporting date would not affect profit or loss.

 (iii) Summarised sensitivity analysis

The following table summarises the sensitivity of the Group's financial assets to foreign-exchange risk of foreign currencies held against the US Dollar.

Credit risk

Credit risk is managed on a Group basis in accordance with financial reporting procedures approved by the Board. Credit risk arises from cash and cash equivalents with banks and financial institutions, as well as credit exposures to outstanding receivables and committed transactions.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 12 months, including the servicing of financial obligations. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted such as natural disasters. See note 2(d).

Maturities of financial liabilities

The table below analyse the Group's and the parent entity's financial liabilities into relevant maturity groupings as follows:

Contractual maturities of financial liabilities

e. Fair-value measurements

The directors consider that the carrying amounts of financial assets and financial liabilities recorded in the financial statements approximate their fair value.

9. Commitments

a. Capital commitments

Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:

b. Non-cancellable operating leases

Commitments for minimum lease payments in relation to non-cancellable operating leases payable:

The Group leases office buildings and staff accommodation under operating leases. The lease terms vary between one and 25 years.They are classed as non-cancellable but they do contain break clauses and mechanisms for sub-letting should the Group requirements change.

c. Joint Venture Commitments

During 2011, the group acquired a 50% interest in Forécariah Holdings Pte Ltd, a jointly controlled entity involved in the development of an iron ore mine in Forécariah, Guinea, West Africa.

The interest in Forécariah Holdings is accounted for in the financial statements using the equity method of accounting. Information relating commitments for the jointly controlled entity is set out below:

10. Key management personnel disclosures

a. Key management personnel compensation

Compensation for Michael Farrow is detailed in note 11 - Related Party transactions.

For details of share based payment transactions with key management personnel, refer to note 6.

b. Equity instrument disclosures relating to key management personnel

Share holdings

The number of shares in the Company held during the financial period by each director of Bellzone Mining plc and other key management personnel of the Group, including their personally related parties, is set out below. There were no shares granted during the reporting period as compensation.

11. Related party transactions

a. Key management personnel

Key management personnel compensation for the period ended 30 June 2013 is set out in note 10.

b. Other transactions with key management personnel or entities related to them

Information on transactions with key management personnel or entities related to them, other than compensation, is set out below.

There were no amounts payable to Consortia or Mr Farrow at the balance sheet dates.