Name and Location
Kalia iron-ore project, Guinea.

Client
Bellzone Mining.

Project Description
Kalia has a Joint Ore Reserves Committee-compliant probable reserve of 59.8-million tonnes at 54.1% iron and a total resource of 124.2-million tonnes at 53.5% iron, containing 72.8-million tonnes of indicated resource at an average grade of 53.7%.

The Kalia Phase 1 (KP1) bankable feasibility study (BFS) has shown that the first phase of the project can deliver a positive return on investment on a standalone basis without the need for rail infrastructure.

At full production, KP1 will deliver seven-million tonnes a year of 57.8% iron, 4.95% aluminium oxide, 2.11% silicon dioxide, 0.09% phosphorus and 9.1% LOI product over the initial ten-year life-of-mine.

The proposed method of mining is a conventional openpit, drill-and-blast, load-and-haul operation. Low strip-ratio mining will be conducted at Kalia Central until year three, when mining will start in Kalia North West.

Drill and blast are planned assuming 5 m benches and only 50% of waste and ore are expected to need blasting. An owner-operator fleet has been assumed, with a vendor-provided maintenance and repair contract to maintain the mine fleet.

Marginal grade and waste stockpiles have been designed, with future expansion potential taken into consideration.
KP1 provides the platform for future expansion of the lower-grade oxide from KP2 and the large magnetite resources of KP3.

The design allows for the expansion and retrofit of additional equipment and the plant to facilitate the processing of KP2 low-grade oxide material.

KP3 is planned to be developed once a bulk transportation solution, including a railway and a deep-water port, is secured.

The product will be transported from Kalia to Kont port by rail access road (RAR). This will entail the construction of 285 km of new road, which will merge with the existing haul road for Forécariah joint venture (JV) operations to Konta port.

The new road will be built to accommodate dual trailer, 150 t truck payloads carrying the initial iron-ore production from Kalia to a new transshiping facility, to be constructed adjacent to the existing Konta port. The proposed solution provides for the loading of 12 000 t barges, which will transport the material to an offshore, high-capacity Cape-size vessel transshipping system, specifically designed for the loading of Cape-size bulk carriers in Guinea marine conditions.

Value
The cost of KP1, including all contingencies, is $865-million.

Bellzone continues to work with its consultants on further optimisation opportunities, including the possibility of upgrading Konta port, to reduce the capital expenditure required.

Duration
The KP1 development schedule has been estimated on the basis of a reputable top-tier contracting company delivering the project under an engineering, procurement and construction management style contract. The KP1 development schedule indicates the operations can be designed and built in 33 months from project start approval, with first export scheduled for the first half of 2016.

Latest Developments
Bellzone is confident of meeting a 2016 deadline to export the first iron-ore from its Kalia mine, provided that full funding for the project is secured this year.

Following the completion of the bankable feasibility study late last year, which showed robust economics, even in a low iron-ore price environment, the company has been focusing on securing funding for the project.

As Bellzone progresses active discussions with potential providers of short-term and project finance, the group has secured a short-term funding agreement through a placement with major shareholder, China Sonangol, to ensure the ability of the company to meet its immediate obligations until August.

Bellzone has placed 51-million new ordinary shares with China Sonangol, at a price of 2.5p apiece, raising net proceeds of about £1.1-million.

The company reported a cash balance of $1.48-million as at June 13 to fund activities until August.

Key Contracts and Suppliers
Consulmet Projects (process plant and mine site power infrastructure), Jeffares & Green (RAR), Wilson Bayly Holmes-Ovcon (RAR implementation strategy and cost estimates), TSG Consulting (dynamic simulation), Seabulk, in JV with Smit Lamnalco (transshipment and capacity-modelling study), and Fluor (BFS project risk assessment and contingency modelling).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Bellzone Mining corporate affairs, Peta Baldwin, tel +44 1534 513 500 and email bellzone@bellzone.com.
Consulmet Projects, tel +27 11 201 4240, fax +27 86 502 5763 or email sales@consulmet.com.
Jeffares & Green, tel +27 11 807 0660, fax +27 11 807 1607 or email jgijhb@jgi.co.za.
Wilson Bayly Holmes-Ovcon, tel +27 11 321 7200, fax +27 11 887 4364 or email wbhoho@wbho.co.za.
TSG Consulting, tel +61 8 9212 1600 or fax +61 8 9486 9794.
Seabulk, tel +1 604 273 1378 or fax +1 604 273 1358.
Smit Lamnalco, tel +31 10 454 9911, fax +31 10 454 9777 or email info@smitlamnalco.com.
Fluor’s Risk Group, tel +27 11 519 6000.