3 Jun 2013 07:00
3 June 2013
Bellzone Mining plc
("Bellzone" or "the Company")
Forécariah Joint Venture announce sale of ship "FGM Iron"
Bellzone Mining plc (AIM: BZM) announces that the Forécariah Joint Venture ("JV") has sold the ship named "FGM Iron" for a consideration of US$8.9 million.
Following the announcement on 27 March 2013 outlining revised production targets for Forécariah, the JV has carried out an in-depth analysis into the operational efficiency of the Forécariah operations. This analysis has shown that the potential use of FGM Iron or an alternative vessel configured for trans-shipping is neither an operational requirement nor a material economic benefit at the current levels of JV production. As the JV is planning to ship between 800,000 and 1 million tonnes in 2013, and 1 million tonnes for 2013 and 2014, the use of geared vessels (rather than FGM Iron) is operationally effective and with one less ore handling stage.
The current Forécariah JV route to markets includes a four stage process:
1. The ore is trucked from the mine site to the port
2. The ore is loaded onto barges at the Konta port which are then towed to the geared Handymax / Panamax export vessels off the coast
3. The geared ship, using cactus grabbers, loads the ore from the barge into its hold
4. The export vessel departs from its loading position and sails to market
The JV is satisfied with the way the shipping and sales processes are working using the current geared ships and plan to continue with this process until increased production levels require a revised methodology. The use of a future trans-shipment system is currently being analysed as part of the Kalia optimisation study and the Company looks forward to presenting the outcomes of this study in Q3 2013.
Bellzone CEO, Glenn Baldwin, said:
"The Company is pleased to continue its operational optimisation with the sale of FGM Iron. The ship was originally purchased on the basis of the old Forécariah JV mine plan and production target and with our new JV production targets, there is no requirement for a ship with the ability to trans-ship ore to a Capesize vessel.
We have completed a detailed cost analysis considering all aspects of the ship-loading process, which includes the capital cost of the trans-shipper, operational cost of the trans-shipper, loading times, stockpile impacts and timing of revenues. The cost differential is negligible at current freight rates. The more frequent smaller vessels provide greater flexibility on the marketing side by permitting access to more customers. The JV is satisfied with the way the shipping and sales processes are working and plans to continue with this process until production requirements drive a change."
Enquiries:
Bellzone Mining plc
Peta Baldwin, Corporate Affairs +44 (0) 1534 513 500
Canaccord Genuity Limited
Nominated Adviser and Broker to Bellzone +44 (0)20 7523 8000
Andrew Chubb/Tarica Mpinga
Investec
Chris Sim/Neil Elliot +44 207 597 5970
Tavistock (UK)
Jos Simson/Mike Bartlett +44 (0)20 7920 3150 / +44 (0)7899 870 450
About Bellzone Mining Plc
Bellzone Mining plc is an exploration and resource development company with iron ore and nickel/copper permits in the Republic of Guinea, West Africa. Kalia Mine Project is the Company's flagship project with a globally significant magnetite resource of 4.63 billion tonnes and some 822 million tonnes of oxide and supergene banded iron formation.
The Forécariah iron ore mine commenced production in May 2012 and is a joint venture between Bellzone (50%) and China International Fund Limited (50%).