Guinea-focused iron-ore company Bellzone Mining has called in the liquidators after its largest shareholder and main backer Hudson Capital prevented it from raising any further equity and debt.
The company previously warned that it would go bust if it could not secure a fresh injection of cash and had planned to monetise its Konta port asset. However, the Aim-listed junior said this week that it had not been successful on that front and that it had been left with no alternative to cease trading and to be laced in the insolvency process.
Alan Roberts and Ben Rhodes, of Grant Thornton Jersey, have been appointed liquidators.
Analysts at London investment bank SP Angel said in a note on Friday that Bellzone had a number of assets for the liquidators to sell, including the four-million-tonne-a-year Konta port, which was built at a cost of $120-million. The port was used by the Forecariah joint venture (JV) – 50:50 Bellzone and the China International Fund – before the iron-ore prices collapsed in 2014 and the JV was put into administration in December 2015.
SP Angel said that the port was known to be of interest to bauxite operators as the other port areas and sites to the north were all at, or near-capacity
Regarding the Kalia mining licence over the 5.5-billion tonne iron-ore resource, the analysts said that Hudson, which is owned by China Sonangol, might be looking to exercise security over the licences. However, “the Guinean Mining Code required the holder of a mining title to be able to demonstrate financial and technical capabilities at all times, so these licences may be in jeopardy without a new investor and management team taking over Bellzone as a legal entity”.
Bellzone has published a fully-independent bankable feasibility study over the first stage of the iron-ore mine in 2013, producing seven-million tonnes a year of 58% fines.
It further owns the Kalia nickel project, the first stage of which has an estimated net present value of $104-million at a 10% discount rate at a $17 500/t nickel prices.
WH Ireland has resigned as nominated adviser and broker to the company and Bellzone confirmed that it had no intention of appointing a replacement adviser. Its securities will be cancelled on Aim if no replacement nominated adviser is appointed within a month.