Bellzone - Kalia

Kalia

Geology

KALIA MINE 39KM MAGNETITE STRIKE

Iron ore occurs at both Kalia I and Kalia II. The initial surface rock chip sampling at both of these localities primarily tested the oxide iron ore and it was the initial focus of interest. The different ore types are discussed separately here as they differ from each other in terms of mining, processing and in the sale of the mined product. Assessment of the target magnetite and oxidised iron material, occurring in and below the weathered crust of the Kalia area is based on the results of exploration drilling and geological mapping. This work has identified five types of iron ore within the Kalia Mine Project:

Massive iron ore of the “Haematite – Goethite” type
Oxidised ores of “Canga” type;
“Detrital” ore;
Transitional (Supergene) Ore;
Magnetite ore

Magnetite

The primary iron mineralisation in the Kalia I deposit extends from northwest to southeast for a distance of 19km. The width of exposures in the surface of rocks of the greenstone association, including iron mineralisation bodies of magnetite and amphibole-magnetite quartzite, varies from 2 to 4.5km. These rocks of the Kambui Supergroup, enclosing the iron mineralisation, are represented by a wide spectrum of schists. These include chlorite-amphibole, biotite-amphibole, pyroxene-amphibole, garnet-biotite-amphibole, chlorite and chlorite-talc varieties. On the southern flank of the deposit, bands of talc rich assemblages which include actinolite-talc and chlorite-talc schists occur. These talc schists contain disseminations of magnetite. The thickness of packets of talc schists ranges from 10-50+ m.

The mineralised bodies are steeply dipping monoclines or pseudo-monoclines with angels of up to 80 to the south-south-west with up to 14 mineralised zones identified in each drilling section and individual mineralised zones with a true width of up to 300m (measured perpendicular to the lithology contacts in a cross section perpendicular to the strike of the zone).

KALIA MAGNETITE JORC CLASSIFICATION

JORC Class	Material	Density t/m3	Tonnes (Bt)	Fe%	SiO2%	Al2O3%	P%	S%	LOI%
Measured	BIF	3.35	0.24	27.9	45.7	2.8	0.07	0.83	1.6
Indicated	BIF	3.36	0.85	27.3	46.1	3.1	0.07	0.96	1.3
Inferred	BIF	3.35	3.54	25.4	46.3	4.5	0.08	0.48	1.4
Combined	BIF	3.35	4.63	25.9	46.2	4.2	0.08	0.59	1.4

Inferred	Schist	2.95	1.53	9.6	48.9	8.8	0.05	0.25	5.8
Inferred	Total		6.16	21.8	46.9	5.3	0.07	0.50	2.5

Concentrate Potential

Mass recovery	Fe	Al2O3	SiO2	P	S
31.8%	68.33%	0.25%	3.61%	0.016%	0.29%

KALIA OXIDE JORC CLASSIFICATION – September 2011

Massive Iron Oxide – Haematite/Geothite

The massive haematite / goethite ores are developed in a stratigraphic position above the primary BIF horizons. On the surface a dense cap rock or cuirassed layer has been formed that becomes gradually less cemented with depth below the topographic surface. The rocks represent dense and poorly-cemented small-debris and detritus breccias with sandy and clayey cement. The proportion of clayey material in the matrix increases with depth. These ores frequently contain debris of differently oxidised ores and sometimes debris of barren rocks and quartz. A decrease of the size and amount of debris fragments is observed with depth.

The lower boundary of this type of iron ore occurs where relict but oxidised BIF can be identified where leaching of silica is incomplete (structural eluvium). The thickness varies in from 4-5 to 60 meters. Actual thickness is determined by local geomorphology, with the greatest thickness developed where topographical variation is minimal.

Canga type Iron Ore

Canga iron ores represent dense and solid rocks of dark-brown and reddish-brown colours. They have been formed by the erosion of massive iron oxide and BIF units and re-deposited downslope. The structure of these ores is brecciated, cavernous and sometimes massive. Debris and boulders within the canga are angular and poorly rounded. Debris of medium size prevails, nevertheless, large debris and boulders of a size up to 1.5 to 3.0 metres are found. Debris consist of oxidised ores of different composition; haematite, goethite, magnetite-haematite, BIF and minor greenschist. The breccias have been re-cemented with an iron rich matrix to produce a cap rock like product.

The most extensive areas of these ores were mapped in the north-west of the Kalia I. The properties of these deposits change significantly in lateral direction in terms of both, the size of clastic material and the share of ore debris in the rock. The thickness of canga ores varies from 3 to 18 metres, with typically the greatest thickness close to the primary source of the mineralisation.

Detrital type Iron Ore

Detrital iron ore is widely distributed over the Kalia deposit, with the most significant deposits occurring to the east of the Kalia I deposit and along the southern margin of the Kalia II deposit. Within the two areas over 20km2 of detrital iron ore has been identified. The ores of this type are typical detrital deposits that have been re-cemented with limonite and lesser extent vitreous goethite matrix. They are similar as the Massive Iron Oxide and Canga Ore types in that they have been cuirassed (cemented) on the surface and are very dense. The degree of cementation decreases with depth where the matrix becomes sandier.

Proximal to their source the ores contain debris of iron ore, quartz, amphibolites and sometimes greenschist. As the distance from source increases the percentage of gangue debris decreases.

Ore debris consist of haematite, goethite and magnetite. Limonite prevails in cement and is rarely found as debris. The cement matrix consist of sandy material with hydrous ferric oxides. The cementing matrix frequently becomes homogenous and dense because of new formation of hydrous ferric oxides. The thickness of ores of this type is extremely variable.

Transitional (Supergene) Ore

Supergene ore occurs over Kalia I within the partially weathered zone between the base of complete oxidation and the top of fresh rock horizon, bounded by the massive iron oxide and canga ores of the oxide profile and the fresh magnetite BIF below.

Ores of this type occur proximal to the BIF source and commonly exhibit greater lateral extent than underlying BIF and may outcrop at surface where the oxide profile is absent. Composed of magnetite, haematite, goethite, quartz and minor limonite, iron grades within this material are variable and in places enriched as a result of mechanical weathering.

Limited metallurgical test work completed on samples of this ore type, suggest the material is suitable for conventional iron ore beneficiation and responds both to magnetic separation and gravity separation techniques.

OXIDE AND SUPERGENE JORC REOSURCE –September 2011

JORC Class	Material	Density t/m3	Tonnes (Bt)	Fe%	SiO2%	Al2O3%	P%	S%	LOI%
Inferred	Supergene	2.61	0.093	36.5	37.9	5.44	0.08	0.17	4.14
Inferred	Oxide	2.65	0.193	38.6	15.95	16.13	0.09	0.04	10.39

BENEFICIATED OXIDE PRODUCT GRADE

Fe	Al2O3	SiO2	P	LOI
58.0%	5.7%	4.0%	0.1%	6.2%

BLENDED OXIDE PRODUCT GRADE

Fe	Al2O3	SiO2	P	S
59.6%	4.1%	5.9%	0.08%	0.1%

OXIDE DRILLING PLAN

Target areas

Target 1 - 2.3km2 Completed
Target 2 - 18.6 km2 (10km2-drilled) -
Target 3 - 4.4 km2 wide space completed, infill in progress
Target 4 - 7.3 km2 Planned
Target 5 - 6.9 km2 Planned

Oxide drilling programme will be ongoing until all targets drilled and defined

Map oxide targets

Project

The completion of the Definitive Feasibility Studies for the Kalia Mine Project remain on track for end 2011.

Bellzone and the appointed team of consultants have completed the first phase of engineering and cost works and are now finalizing mining schedules, cost and operational optimizations and production ramp up.

Kalia

Environmental and Socio-economic

Bellzone works actively with our local communities by;

Providing priority access to job opportunities
Training schemes for local employees
Health and hygiene training
Nutrition support
Medical support
Education
Local community initiative support

All site work follows Government approved environmental procedures and approval systems prior to site disturbance activities.

The Socio-economic Impact Assessment (SEIA) and the environmental Imapct Assessment (EIA) studies have been completed for the project and have been approved by the Ministry of Environment.