Unaudited Interim Results

12 September 2016

Bellzone Mining plc("Bellzone" or "the Company")

Unaudited interim results for the six months ended 30 June 2016 

Bellzone Mining plc (AIM: BZM) announces its unaudited interim results for the six months ended 30 June 2016.

Key Highlights

· At 30 June 2016, Bellzone was within the Board-approved working capital budget by 10%. There have been no significant negative unbudgeted expenditures.

· Ferronickel Project feasibility study work to date has yielded positive results.

· At 30 June 2016, Bellzone was well within budget on feasibility study work.

· Loan facility of US$6.5 million to fund working capital requirements and placing of US$2.0 million to fund feasibility study work, as announced in December 2015 and January 2016.

Financing activities

Following the new US$6.5m loan facility with Hudson Global Group Limited ("Hudson") announced in December 2015, Bellzone agreed a placing of new ordinary shares with Hudson raising £1.35m (US$2.0m) to fund feasibility study work for the Kalia ferronickel nickel project, in January 2016.

The US$6.5m loan facility was agreed to provide working capital for the continued operation of the Company during 2016, whilst the US$2.0m placing was agreed to advance the feasibility study. As such, these facilities provide working capital for the activities of the Company through to the end of 2016.

Whilst the outcome of the feasibility study work, published in August 2016, has been positive, to continue the necessary work beyond the end of 2016 Bellzone expects to need to seek further finance.

As at 30 June 2016, Bellzone held net cash of US$2.4 million and had drawn down US$3.0 million of the US$6.5m loan facility from Hudson Global Group. As at 31 August 2016, these balances were US$2.2 million and US$4.0 million respectively.

The total cost of feasibility study work on the Ferronickel Project to date, taken together with the costs of upgrading to a Definitive Feasibility Study, are expected to be within the original budgeted cost of US$ 2.0m. This is however subject to the assessment of the cost of excavating, shipping and analysing a bulk sample of the relevant material and any costs associated with further exploration to upgrade inferred resources to measured and / or indicated resources.

Costs

The Company's overall running costs have increased by 4.5% compared to the first half of 2015. This is largely due to the interest on the US$ 13.7 million loan from major shareholder Hudson Global Group Limited (previously China Sonangol International (S) Pte Ltd). Expenses from operating activities reduced by 3% compared with the first half of 2015 despite the increase in exploration activities required for the ferronickel project in the first half of 2016.

Given the closure of the Company's office in Jersey office the relocation of finance and IT functions to Singapore and placing unutilised resources in Guinea on technical leave while finalising the feasibility studies on the ferronickel project, the Company expects further cost savings in the second half of 2016.

Expenditure is currently focused on developing the ferronickel project at Kalia whilst ensuring:

• Equipment is under care and maintenance;

• Security is in place to prevent theft and damage to assets; and

• No compromise to statutory or regulatory compliance processes.

Condensed Consolidated Statement of Financial Position

At 30 June 2016

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2016

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2016

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Condensed Consolidated Cash Flow Statement

For the six months ended 30 June 2016

The above consolidated cash flow statement should be read in conjunction with the accompanying notes.

Notes to The Unaudited Interim Condensed Consolidated Financial Statements For the six months ended 30 June 2016

1. Reporting Entity

The condensed consolidated interim financial statements of Bellzone Mining plc ("the Company") for the six months ended 30 June 2016 were issued on 12 September 2016 in accordance with the authority of a resolution of the board.

Bellzone Mining plc is a public company listed on the AIM Market of the London Stock Exchange, and incorporated and registered in Jersey, Channel Islands. The Company's registered office is located at Standard Bank House, 47-49 La Motte Street, St Helier, Jersey, JE2 4SZ.

The condensed consolidated financial statements of the Company as at and for the six months period ended 30 June 2016 comprise the Company and its subsidiaries (together referred to as the "Group").

The nature of the principal activities of the Group is the exploration and development of resources, primarily at its flagship Kalia Iron Ore and Nickel Project in Guinea, West Africa. Bellzone continues to engage with the Government of Guinea with respect to updating the 2010 Mining Convention. The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied unless otherwise stated.

2. Basis of preparation

a. Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use in the European Union.

b. Early adoption of standards

The Group has not early-adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

c. Basis of measurement

The financial statements have been prepared on the historical cost basis except where indicated otherwise in the notes to the interim condensed consolidated financial statements.

d. Functional and presentation currency

The functional currency of the Company and all of its subsidiaries is the United States Dollar ("$"), which is the currency of the primary economic environment in which the entities operate. All amounts are expressed in $ and all values are rounded to the nearest thousand ($'000) unless otherwise stated.

e. Going concern

The nature of the Group's current activities does not provide the Group with production or trading revenues and the cash and committed funds available at year-end are only sufficient to see the Group's activities through to December 2016. The Group will therefore require further financing to be made available beyond December 2016 to enable it to continue to meet its liabilities as and when they fall due.

Bellzone's current funding is wholly reliant on its majority shareholder Hudson Global Group Limited (previously China Sonangol International (S) Pte Ltd). China Sonangol has provided loan financing to the Company since August 2014 to date, totalling a principal amount of US$13.7 million and rising to US$16.7 million by the end of 2016 pursuant to two separate loan agreements. Furthermore, Hudson has confirmed in a letter to the Directors its current intention to continue making funds available to support the Group's working capital requirements for a period of 12 months from the date of signing the financial statements for the year ended 31 December 2015 on a basis that allows them to change that intention. The Directors have no reason to believe, given its past support, that Hudson Global Group Limited will withdraw its support while the feasibility of the Kalia development is being determined.

The feasibility study work results published an assessment of the theoretical price required for nickel for the project to break-even and this price is close to the current spot price of nickel. However, the broad market consensus of the expected balance of future supply and demand for nickel is a positive assessment of the expected price for nickel over the next few years. Accordingly, the feasibility study results to date were generally well received amongst mining lending banks and the Directors have every expectation that investors will be interested to invest in this project.

Whilst the outcome of the feasibility study work, published in August 2016, has been positive, to continue the necessary work beyond the end of 2016, Bellzone will need to seek further finance.

The Group is evaluating its strategy and its ability to secure funding that would enable it to both continue operations for the short term and in the long term to develop the Kalia licence area; however, at present there are no committed funds beyond December 2016. Additional funding may be sourced from one or more of the following:

· further short-term loan facilities from the majority shareholder;

· placement of further securities;

· loan funds secured against assets of the Group;

· the sale of assets; and/or

· funding in exchange for an interest in the Group's projects or future production from the projects.

Taking the above factors into account, the Directors have determined that the Group will obtain sufficient funding from one or more of the aforementioned funding sources and have continued to adopt the going concern basis of accounting in preparing the Consolidated Financial Statements. However, the Directors have also concluded that there is a material uncertainty in relation to the availability of committed funding that may cast significant doubt on the ability for Bellzone to continue as a going concern beyond 2016 and therefore the Group and Company may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.

3. Mineral properties in the exploration and evaluation phase

The above asset values relate to the mineral properties in the exploration and evaluation phase and are based on the cost of acquiring 100% of the companies holding the Kalia, Faranah and Sadeka mining and exploration permits.

The permit areas are 100% owned by Bellzone through the relevant subsidiaries. In addition to the costs of acquiring the exploration permits through the acquisition of the subsidiaries, the statutory fees paid on the issue of the Mining Concessions (Permits) for the Kalia and Faranah areas are included.

4. Issued capital

The Company is a no par value company. No share issued by the Company shall have a par value.

There is no limit on the number of shares which may be issued by the Company, subject to shareholder approval, and if the share capital structure of the Company is at any time divided into separate classes of share there is no limit on the number of shares of any class which may be issued by the Company.

Subject to the provisions of the Companies (Jersey) Law 1991 (as amended) (the "Companies Law") and the Articles of the Company and without prejudice to any rights attached to any existing shares or class of shares, any share may be issued with such rights or restrictions as the Company may by ordinary resolution determine or, subject to and in default of such determination, as the Board shall determine.

The Company may, pursuant to the Companies Law, issue fractions of shares and any such fractional shares shall rank pari passu in all respects with other shares of the same class issued by the Company.

The Company shall maintain a stated capital account in accordance with the Companies Law for each class of issued share. A stated capital account may be expressed in any currency determined by the Board from time to time.

Ordinary shares have no par value, carry one vote per share and carry the right to dividends.

The Group is in a project development stage and did not declare or pay any dividends during the period (2015: nil).

5. Reserves

6. Events occurring after the reporting period

There were no significant events occurring after the balance sheet date and the date of this report.

7. Reconciliation of loss after income tax to net cash OUTflow from operating activities