Rail and Port Infrastructure

Bellzone reaches MOU for Kalia Iron Project Rail & Port Infrastructure

31.05.2010 | Editor: Marcel Dröttboom

Bellzone shall transfer to CIF, with the agreement of the Guinean Minister of Mines and Geology of the Republic of Guinea, an area equal to approximately 50 percent of the Kalia II Prospect and 100 percent of the Faranah Permit and all available data relating to it.

China International Fund shall incorporate a new company by no later than 6 June 2010, dedicated for the development of the infrastructure (the “Newco”). USD 40 million shall be paid by China International Fund to Newco within 5 business days of incorporation of Newco, which will be used solely to fund the feasibility study for the infrastructure required to transport and export production from the Kalia Prospect. On incorporation Newco will be owned 100 percent by China International Fund.

On finalisation and execution of the definitive agreements China International Fund will retain 90 percent of the issued share capital of Newco and Bellzone will be issued shares representing 10 percent of the enlarged issued share capital which shareholding shall be non-dilutable without the prior written consent of Bellzone (the “Carried Interest”).

Bellzone shall retain the Carried Interest for the duration of the feasibility studies, construction and operation of the infrastructure without any obligation to finance the infrastructure.

Bellzone and its subsidiaries will be guaranteed a perpetual priority access right to the use of the infrastructure for the transport and export of the production from the Kalia Iron Project on terms to be agreed between the parties.

Bellzone and CIF agree to create a 50:50 joint venture to finance, develop, produce, transport, export and sell iron ore from the Forecariah Permits held by a subsidiary of CIF in south west Guinea.

Bellzone agrees that CIF has rights to purchase 100 percent of the off-take from the Kalia Prospect at market price (excluding any proceeds from the Kalia II Prospect transferred to CIF).

Bellzone will provide expertise to the Newco in connection with the design, construction and implementation of the infrastructure and agree to provide expertise and knowledge, and assist CIF where possible with the development and implementation of the Forecariah iron ore resources.