28 Jul 2010 07:00
7.00 am 28 July 2010
Bellzone Mining plc
("Bellzone", the "Investor" or the "Company")
Bellzone Secures Mining Convention Approval
Bellzone Mining plc (AIM: BZM) is pleased to announce that the Mining Convention (the "Convention") for its Kalia Mine (the "Mine" or "Project") and associated infrastructure has been approved and signed by the Guinean Minister of Mines and Geology and the Guinean Minister of Economy and Finance.
The purpose of the Convention is to:
·; Grant and guarantee the right of the Investor to extract, process, treat, transport, export and sell Iron Ore
·; Define the legal, administrative, financial, tax, customs, mining, environmental and social conditions according to which the Investor shall carry out operations
·; Define the rights and obligations of the Republic of Guinea (the "State") and the Company in relation to the development and operation of the Project
The terms of the Convention are based on the well established and comprehensive Mining Code for the State, which has been in force since 1995 (the "Mining Code"). The detailed terms, conditions, rights, duties and responsibilities for both the State and Bellzone are clearly defined within the Convention. The Convention was approved following a statutory process which included a three month negotiation of terms with a multi-disciplinary committee appointed by the State.
The Convention is expected to be ratified by decree from the President of the Republic of Guinea in Q3 of 2010. This final step in the statutory process will enact the terms and conditions of the Convention into law.
Highlights of the Convention:
·; Defines the Mining Concession (the "Concession"), which includes:
o The award of the land area on which the production activities of the Project will occur
o Providing the necessary access and authorities to develop the Mine and the required rail and port infrastructure (including the Infrastructure Accord signed by the State and the Company announced on 17 June 2010)
o Establishing the initial period for the Concession to be twenty five years, renewable in unlimited ten year periods thereafter
o Constituting the Concession as an immovable, divisible and farmable right which may be pledged or assigned to guarantee loans dedicated to the completion of the Project
·; Economic Conditions:
o Mining Taxes (Royalties) are defined for processed iron ore at 7% (no grade enhancement) and concentrated iron ore at 3.5% (grade enhancement) as currently prescribed by the Mining Code
o Favourable customs and import duties to support the development and operation of the Project
o Income tax free period of eight years to allow capital recovery
o An economic stabilisation clause that exempts Bellzone from increases that may be promulgated, but allows the Company to apply for benefits that may become available through subsequent changes
o The Company is authorised to open and manage its affairs through onshore or offshore foreign currency accounts
o Authority to repatriate funds
·; Rights and obligations:
o Feasibility study to be completed within 24 months of the Presidential decree and facilities in place to start production within four years of the completion of the feasibility study
o The State may participate in up to 15% of the equity of the Bellzone Guinean subsidiary Bellzone Holdings SA ("Bellzone SA") by purchasing shares in Bellzone SA at investment value up to the date the Project receives investment approval from the Company
o If the State does not exercise its participation rights by the time the Company has made an investment decision these rights will expire
o The Company is to operate in compliance with established standards with respect to environmental protection, health and safety and well being of its employees and stakeholder communities
o The Company's rights relating to the rail and port infrastructure granted under the Convention to the Project are able to be assigned to other parties
Nik Zuks, Managing Director of Bellzone Mining plc, commented: "This is another major event for Bellzone in a short space of time. The Convention, combined with the signed Infrastructure Accord, clearly establishes the State's and the Company's rights and obligations and de-risks the Project by providing certainty around the terms and conditions and the expectations for the development of the Kalia Mine and associated infrastructure. "
end_of_the_skype_highlightingEnquiries:
| Bellzone Mining plc Nik Zuks |
+61 439 420 893 begin_of_the_skype_highlighting end_of_the_skype_highlighting |
|
Canaccord Genuity Limited Nominated Adviser and Joint Broker to Bellzone Andrew Chubb/Tarica Mpinga |
+44 (0)20 7050 6500 end_of_the_skype_highlighting |
|
Renaissance Capital Limited Joint Broker to Bellzone Simon Matthews/Thomas Beattie |
+44 (0)20 7367 7777 end_of_the_skype_highlighting |
|
Conduit PR Jos Simson/Charlie Geller |
+44 (0)20 7429 6603 begin_of_the_skype_highlighting end_of_the_skype_highlighting+44 (0)7899 870 450 begin_of_the_skype_highlighting end_of_the_skype_highlighting |
Bellzone Mining plc
Bellzone Mining plc is an iron-ore exploration and development company with assets in Guinea, West Africa. The Company's flagship project, the Kalia Iron Project has a maiden inferred magnetite JORC resource of 2.4 billion tonnes, located on the Kalia I prospect. Previous drilling results and internal estimates indicate that Kalia I and II Prospect has the potential to host more than 13 billion tonnes of magnetite and 2.9 billion tonnes of oxide at surface. Exploration work continues to further define the potential at Kalia. The SEIA and EIA studies are underway to support the completion of the Bankable Feasibility Study.
Bellzone intends to develop a 50 million tonnes per annum ('mtpa') iron ore production through a two staged approach. First production is expected in 2014 at 20mtpa which is expected to fund the ramp up period to 50mtpa in 2018.
On 24 May 2010, Bellzone reached a Binding Memorandum of Understanding ('MOU') with China International Fund ('CIF') with regards to the financing of the infrastructure required for the Kalia Iron Project.
The Binding MOU is subject to the parties agreeing and executing definitive agreements for the infrastructure company, joint venture agreement and off-take agreement.
Bellzone is listed on the AIM market of the London Stock Exchange under the ticker 'BZM'.
www.bellzone.com.au
Bellzone Mining (BZM)