Bellzone Mining Regulatory News (BZM)

15 July 2015

Bellzone Mining plc

("Bellzone" or "the Company")

Kalia Project Update

· Strategic review in progress to expedite development of Kalia

· Nickel mineralisation within existing iron ore JORC resource / reserve presents potential pathway to low-capex development

· Investigating downstream processing in Guinea for nickel pig iron (NPI) production

· CSA Global engaged to convert data for iron ore JORC resource / reserve to add nickel JORC resource to support pre-feasibility study

· Nagrom is conducting initial metallurgical testing to support pre-feasibility study

Bellzone Mining plc (AIM: BZM) provides an update on its continuing strategic review (the "review") of its 100%-owned Kalia mining license.

The objective of the review is to investigate all opportunities to ultimately deliver the greater Kalia iron project given the constraints currently found in capital markets, current iron ore price levels and the wider Guinea-specific environmental factors, including infrastructure challenges.

The review has highlighted that the iron ore resource in the northwest area of Kalia includes significant nickel laterite mineralisation. This mineralisation potentially presents a new opportunity to commence iron ore mining and pig iron production that includes nickel and cobalt.

Bellzone has commenced preliminary studies to assess the viability of developing a modular nickel pig iron ("NPI") production facility on site. The intention is to smelt iron ore containing nickel to produce NPI with a nickel content that meets global consumer specifications. The processing and smelting processes identified have initially been assessed as suitable for location at Kalia.

Processing on site at Kalia will address a number of key objectives including:

· Eliminating the immediate requirement for bulk materials export infrastructure;

· Reduction of transport costs in the supply chain to market;

· Supporting Government strategy for the development of downstream processing in Guinea;

· Ability to produce a potentially higher value product;

· Establishing baseline infrastructure for the development of the greater Kalia project;

· Providing a pathway to early cash flow from operations before the development of the greater Kalia project; and

· Providing a product that is not purely dependent on the iron ore price.

The nickel mineralisation occurs in the weathered laterite zone near the topographical surface above the unweathered magnetite deposit. The laterite contains significant iron mineralisation which was the original target of the Kalia Project 1 ("KP1") JORC reserve. The nickel-rich mineralisation occurs together with the iron ore and is considered to be a suitable feed stock for the production of NPI.

A preliminary 0.5% Ni wireframe was used to assist in the estimation of a JORC Exploration Target and demonstrates a close relationship with the iron laterite mineralisation.

The area of nickel and iron laterite has already undergone significant drilling which de-risks the development of a nickel laterite JORC Resource in the project. Because the drill spacing is quite dense (targeting the iron ore) there is high confidence in the continuity of nickel mineralisation within the Kalia Northwest area. The nickel grades are consistent with many other nickel laterites globally and the summary table below presents information on the numbers of samples and of nickel grades (along with other elements). The table demonstrates the significant frequency of elevated nickel results within the database at two nominal cut-off grades of 0.4% Ni and 0.6% Ni.

Table 1. Summary statistics for nickel grades at Kalia Northwest

Although there is significant drilling at the prospect the previous JORC Mineral Resource / Ore Reserve work was targeting iron ore only. This next phase of Mineral Resource estimation work will require greater focus on the nickel-rich areas within the iron ore Mineral Resource. To develop this nickel-focused Mineral Resource reported in accordance with JORC Code 2012, CSA Global will undertake new computer modelling of the deposit as well as additional work on Quality Assurance and Quality Control ('QA' / 'QC') and density.

The substantial areas of nickel mineralisation at Kalia Northwest are considered by CSA Global to represent an Exploration Target as described below:

· The Exploration Target statement is based on a preliminary wireframe model developed from 707 reverse circulation (RC) holes and 12 diamond core holes. Holes were drilled on grids ranging from 100m by 200m to 50m by 50m. Nickel grades have been determined from fused disc XRF analyses of 2 metre samples of drill core.

· The preliminary wireframe model has been created on a nominal 0.5% Ni cut-off and has dimensions of approximately 4,000m strike length and widths ranging from 300m to 1,000m.

· The upper surface of nickel-rich laterite mineralisation occurs from surface to depths of 10m and is generally between 20 to 30m in true thickness.

The Exploration Target for Kalia for the nickel-cobalt component is reported as follows:

The JORC code (JORC, 2012) defines an Exploration Target as a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade (or quality), relates to mineralisation for which there has been insufficient exploration or data of insufficient quality to estimate a Mineral Resource. The JORC Code requires it should be noted that the potential quantity and grade of the Exploration Target is conceptual in nature and further work may not result in a Mineral Resource.

The nickel was not the target for the work undertaken during the evaluation of the iron ore and as such requires some more detailed investigation. CSA Global believes that the Exploration Target can be upgraded to a JORC Mineral Resource by completing a series of work programmes. The next steps to be undertaken by CSA Global to test the validity and develop a JORC resource statement within Q3 2015 are:

· Carry out a QA/QC program to validate the nickel and cobalt values in the database, involving selective re-analysis of sample pulps.

· Undertake a programme to validate density determinations focused on the weathered zone.

· A more detailed assessment of the deposit geology will be undertaken to better understand the distribution of nickel-bearing lithologies and to assist with domaining the distribution of higher and lower grade zones within the deposit and to establish mineralogical domains for the deposit.

· Detailed three-dimensional computer modelling and geostatistical analysis of the analytical results in the deposit to understand which parts of the deposit are likely to be economically viable, leading to an estimate of a JORC Mineral Resource.

The Company has started work with the laboratories at Nagrom on the preliminary metallurgical assessment to support upgrading the Exploration Target and to better understand the processing options available for the nickel mineralisation. The results will be used to determine the ability to process the nickel and determine its economic viability to support the estimation of a nickel / iron Mineral Resource in accordance with the JORC Code 2012.

Initial results received from Nagrom show that a Pressure Acid Leach test produced an indicative nickel extraction of 94%. A Bottle Roll test programme is currently being undertaken with results to-date indicating nickel leaching behavior as being typical of nickel laterite, suggesting well-known and previously used extraction processes can be used to process the material found at Kalia Northwest.

KH Tung, Chief Executive Officer of Bellzone said "This update on the strategic review of Kalia and disclosure of the nickel mineralisation within the iron ore at Kalia provides the market with new information about Kalia."

"Our focus is to develop Kalia to its full potential. We are fully cognisant of the challenges presented by infrastructure limitations for bulk materials production and export in Guinea, financial markets, iron ore prices and developing a large operation that will eventually be the Kalia mine. We revisited KP1 and the limitations of the export capability within Guinea. The concept of developing downstream processing of iron ore in Guinea to reduce the volume of material for export was attractive, but iron ore processing of itself did not provide a solution. The review of the Kalia resource and mineralization led us to the concept of producing nickel pig iron. This concept appears to address the infrastructure challenges presented for bulk materials export."

 "We have identified a solution to open the path to development of KP1 and onto the development of the greater Kalia project. We look forward to providing further updates as the strategic review progresses."

Qualified Person

The information in this announcement that relates to the Nickel Exploration Target at Kalia is based on information compiled by Mick Elias of CSA Global (http://www.csaglobal.com). Mick Elias takes overall responsibility for the Nickel Exploration Target. Mr Elias is a member of the Australian Institute of Geoscientists and has 35 years of experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a competent Person in terms of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012 Edition) Mick Elias has reviewed the information contained in this announcement and consents to the inclusion of such information in this announcement in the form and context in which it appears.

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