Bellzone Mining shares plunged over 46 per cent in early Wednesday trading as the company announced limited iron ore resources at its flagship Kalia Mine Project in the Republic of Guinea, West Africa.
The miner said it had to revise its export target from 3.0m-4.0m tonnes to 0.8-1.0m tonnes due to lack of Joint Ore Reserves Committee (JORC) direct shipping ore. It is now expected to deliver 58% of iron content lump and fines products.
The average freight-on-board cost is planned to be in the range of $45-$50 per tonne. The current average cost of shipping a 50-60,000 tonne geared ship is currently $35-$40 per tonne.
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The underperformance of the transhipping system was announced in January 2013 and the company informed the market that the re-engineering process would take at least six months.
Bellzone has revised a plan to generate more cash quickly and require less up-front capital.
The new strategy includes trucking its product to port as there is no trans-Guinea railway in place.
The access road for the railway line from the company's Matakan port site to the Kalia mine site will be developed.
Once the railway infrastructure is completed the company plans to develop phase 2 of the greater oxide project and phase three of 3 the magnetite project within the Kalia prospect.
RD
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