Bellzone Mining gets $2.7 billion from China’s CIF for Guinea iron ore project
25 May 2010
Guinea focussed AIM-listed, Bellzone Mining Plc signed a binding agreement yesterday with China International Fund Limited (CIF) to develop its 2.4 billion tonne JORC magnetite Kalia iron ore project in Guinea, West Africa.
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, which the miner intends to develop 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.
Hong Kong-based CIF will fund $2.7 billion to build the infrastructure required for the Kalia Iron Project that includes the rail system (including rolling stock), bulk storage facilities, port, port loading facilities, port services and power development required to produce and transport 50 million tonne per annum of iron ore.
In return, CIF will get an area equal to approximately 50 per cent of the Kalia II Prospect and 100 per cent of the Faranah Permit as well the exclusive rights to purchase the entire out from the mine at market price - excluding any proceeds from the Kalia II Prospect transferred to it.
CIF will incorporate a wholly-owned new company, Newco, by transfering $40 million to fund the feasibility study for the infrastructure required to transport and export production from the Kalia Prospect.
On finalisation and execution of the definitive agreements, CIF will retain 90 per cent of the issued share capital of Newco and Bellzone will be issued shares representing 10 per cent of the enlarged issued share capital.
Bellzone and CIF have also agreed to create a 50:50 joint venture to finance, develop, produce, transport, export and sell iron ore from the Forecariah Permits held by a subsidiary of CIF in south west Guinea.