Guinean iron ore company to list on AIM

Finance

London’s AIM market is to receive a new iron ore entrant as private company Bellzone Resources plc plans to raise US$100 million and list on the bourse in the near future.

The company has appointed Canaccord Adams Ltd and Renaissance Capital Ltd as joint brokers and book runners in the initial public offering.

The company owns the Kalia deposit in Guinea, with a maiden inferred magnetite JORC resource of 2,400Mt, with a claimed potential of 13,000Mt over the entire strike.

The company will use the funds to accelerate a drilling programme, upgrade resource and complete a bankable feasibility study on the project. Management says the company is striving to be a 50Mt/y producer.

Stage one of the project could start producing in 2014 at 20Mt/y of direct shipping ore. A total capital cost of US$4.5 billion, including infrastructure, has been estimated for Kalia.

Bellzone also estimates that there is a 2,900Mt direct shipping ore cap at Kalia, which can be used to generate early cash flow. The Kalia deposit is located 360km east of the capital, Conakry.

Mid-tier iron ore companies already on the exchange include London Mining plc and African Minerals plc. London Mining owns projects in Greenland and Sierra Leone amongst others. African Minerals is developing the 10,000Mt Tonkolili project in Sierra Leone.

Bellzone’s project infrastructure, including rail, ship loading and stock yards, will be developed in a separate vehicle. The project lies in a separate iron-ore district north west of Rio Tinto’s Simandou project also located in Guinea.