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Bellzone gets funding boost from majority shareholder

Published: 09:58 24 Dec 2015 GMT

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Michael Farrow, Bellzone chairman, called the shareholder’s support as “steadfast”.

Bellzone Mining (LON:BZM) shares advanced after its major shareholder agreed to shore up the company’s working capital position.

Hudson Global Group, which owns 50.5% of Bellzone, will loan the company US$6.5mln with the first US$2mln draw down available before the end of January.

The arrangement, which carries interest at 5% over libor, is expected to give Bellzone sufficient working capital for 2016 and it has a repayment date of March 31 2018.

Hudson is a wholly owned subsidiary of China Sonangol International, as is the China Sonangol International Pte Ltd (CSIS) unit which previous provided Bellzone with a US$10mln loan.

The CSIS loan, meanwhile, was extended to US$10.2mln to recognise an additional US$200,000 advance to the company which occurred in June. And CSIS has waived technical defaults under the loan terms in order to allow the Hudson deal to take place.

Michael Farrow, Bellzone chairman, described the support of CSIS and Hudson as “steadfast”.

“Without their willingness to provide critical financing, we would not be able to seek to realize the significant potential of our world-class Kalia iron ore concession,” he said in a statement.

Bellzone also told investors that it now intends to engage specialist consultants to undertake a detailed feasibility study for what it describes as “a nickel-focused iron ore mining project” at the Kalia Northwest property.

It said this would be the first step in enabling large scale production from the mine.  And it added that Hudson is prepared to fund the study.

The company expects such a study will take about six to nine months which, it says, sets up the possibility of a project start up in early 2017.

It comes after a report by third party consultant CSA Global which in October identified a resource within nickel laterites.

Farrow added: “While commodity prices remain depressed, we are excited to be able to take the first concrete step forward on a meaningful nickel project which has promising characteristics and which can become an important overall contributor to the Guinean economy in time.

“Having made substantial investments in Kalia over many years, it is important that Bellzone is able to map a credible path to Kalia's exploitation and the nickel project represents only the beginning of this."

On AIM, Bellzone Mining shares gained 17.65% to trade at 0.5p each.

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