Shares in Bellzone Mining took a hit on Thursday after it reported that the transhipping system on the vessel carrying its first shipment of iron ore from the Forecariah joint venture operation in the Republic of Guinea, West Africa, failed to perform as had been expected.
The shipment had been announced on December 27th.
The firm said that although the shipment was made as planned, there was a problem with the transhipping performance, and said this will be "addressed by chartering geared ships capable of loading from the barges while work continues to redesign and re-engineer the loading and offloading configuration".
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Bellzone Chief Executive Officer Glenn Baldwin said: "The operations had produced and moved enough ore to Konta to fill a large Cape sized vessel by the beginning of December 2012. However, we have been informed that the transhipping system did not perform as expected."
Latest Videos FromMoneyWeek
The ship left the coast off Konta Port in Guinea carrying around 63,000 tonnes of iron ore.
Baldwin continued: "We expect the re-engineering process to take at least six months. The use of geared ships is expected to increase the shipping costs.
"The JV is fully funded and has the flexibility to adjust production and shipping to be self-sufficient from a cash perspective and optimise margins.
"The sailing of this vessel demonstrates the fact that Bellzone has the capacity, with [its JV partner] China International Fund and with the support of the government of Guinea, to build roads, a port and a mine in Guinea; a country which is now once again an iron ore producer."
The group added that the JV expects to be able to release its Joint Ores Reserves Committee (JORC) statement in mid-January.
"The JV will use the Maiden JORC statement to develop a detailed production and shipping schedule in Q1, 2013 and we will release this to market in due course," Baldwin added.
NR
