Bellzone Mining : Placing to raise up to approximately £1.7 million

NOT FOR ISSUE, RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN.

Further to the announcement of 22 September 2014, in which the Company announced that it had been unable to reach agreement with China Sonangol International (S) Pte Ltd ("China Sonangol") on the final satisfaction of all conditions of the loan agreement announced on 18 August 2014 (the "Loan"), Bellzone announces a non‐pre‐emptive placing to raise gross proceeds of approximately £1.19 million (the "Placing") through the issue of 238,093,724 new ordinary shares of no par value ("the Placing Shares") and a further conditional placing to raise approximately £0.49 million (the "Conditional Placing") through the issue of
98,920,911 new ordinary shares of no par value (the "Conditional Placing Shares"). In both the Placing and the
Conditional Placing, the placing price is 0.5p and the sole investor is China Sonangol.
The placing price represents a discount of 3.8 per cent to the closing mid‐price of the Company's shares of
0.52p on 19 September 2014, being the last day of trading before the Company's shares were suspended from trading on the AIM Market of the London Stock Exchange ("AIM").
Bellzone has a general authority from shareholders pursuant to Resolution 5 of the Annual General Meeting held on 25 July 2014 ("AGM"), to allot up to 238,093,724 ordinary shares in the Company. Following the rejection of Resolution 6 at the AGM which sought to dis‐apply pre‐emption rights over the issue of
119,046,862 ordinary shares for cash, the Company intends to issue the 238,093,724 Placing Shares for non‐
cash consideration (to which pre‐emption rights do not apply) via a cash box placing.
A cash box placing is a mechanism whereby a company can raise new equity funds via an issue of shares for non‐cash consideration (to which pre‐emption rights do not apply) in circumstances where it does not have authority to issue such shares directly for cash (for which a disapplication of pre‐emption rights is required and in the case of Bellzone has not been authorised by shareholders). A cash box placing is not an issue for cash, but an issue of shares made in consideration for the transfer to the issuer of shares in a special purpose subsidiary company. The Board has determined to proceed with a cash box placing in light of the Company's current financial difficulties. The Placing is not subject to shareholders' approval.
The Conditional Placing, which is also structured as a cash box placing, to which pre‐emption rights do not apply, requires the approval of shareholders in an Extraordinary General Meeting ("EGM"). It is expected that a circular regarding the Conditional Placing, containing a notice of EGM, will be posted to shareholders as soon as practicable following announcement of the Placing. The Company has received irrevocable commitments from certain shareholders in respect of 219,258,167 ordinary shares in aggregate, representing 21.48 per cent of the voting rights of the Company following the Placing, to vote in favour of the resolution to approve the Conditional Placing (the "Shareholder Resolution").
The proceeds of the Placing are expected to provide Bellzone with sufficient funds to continue operations until the end of October 2014 and, taking account of the further proceeds of the Conditional Placing, until the end of November 2014. A total of 238,093,724 Placing Shares have been placed with China Sonangol and a further
98,920,911 Conditional Placing Shares have been placed with China Sonangol, subject to inter alia, shareholder
approval.
Following the Placing, China Sonangol will be interested in approximately 46.25 per cent, of the voting rights of the Company and, should the Conditional Placing be approved by shareholders, 51.00 per cent of the voting rights of the Company.
The Board looks forward to developing the future financing strategy of the Company further with China Sonangol, including the status of the Loan, under which $1.5 million is drawn and repayable with interest on or before 14 December 2014. Until the Company has such clarity regarding its financial position, including China
Sonangol's views with respect to financing beyond the end of November, it believes it is appropriate that its ordinary shares remain suspended from trading on AIM.

Takeover Code

As a result of the uncertainty surrounding the Company's financial position, China Sonangol applied to the Panel on Takeovers and Mergers ("Panel") for dispensation under Rule 9 of the City Code on Takeovers and Mergers (the "Code").
Under Rule 9 of the Code, where any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with shares already held by that person and any interest(s) in shares held or acquired by persons acting in concert with him or her) carry 30 per cent or more of the voting rights of a company which is subject to the Code, that person is normally required to make a general offer to all of the holders of any class of equity share capital or other class of transferable securities carrying voting rights in that company.
An offer under Rule 9 must be in cash (or with a cash alternative) and at the highest price paid within the preceding 12 months to acquire any interest in shares in the Company by the person required to make the offer or any person acting in concert with him or her.
Following the Placing, China Sonangol will have increased its interest in shares carrying voting rights of the Company from 29.90 per cent to 46.25 per cent, and should the Conditional Placing be approved by shareholders, from 46.25 per cent to 51.00 per cent. Without a waiver of the obligations under Rule 9, each of these increases would oblige China Sonangol to make a general offer to Shareholders under Rule 9 of the Code.

Dispensation from General Offer

Under Note 1 of the Notes on Dispensations from Rule 9 of the Code, when the issue of new securities in consideration for an acquisition or a cash subscription would otherwise result in an obligation to make a general offer under Rule 9 of the Code (the "Rule 9 Offer"), the Panel will normally grant a waiver if, inter alia, the shareholders of the company who are independent of the person who would otherwise be required to make an offer and any person(s) acting in concert with him or her (the "Independent Shareholders") pass an ordinary resolution on a poll at a general meeting (a "Whitewash Resolution") approving the proposals giving rise to the obligation to make an offer and the waiver of it by the Panel.
The Takeover Panel may waive the requirement for a Whitewash Resolution to be considered at a general meeting (and for a Circular to be prepared in accordance with Section 4 of Appendix 1 to the Code) if Independent Shareholders holding more than 50 per cent of the company's shares capable of being voted on such a resolution confirm in writing that they would vote in favour of the Whitewash Resolution were such a resolution to be put to the shareholders of the company at a general meeting.
Independent Shareholders who, in aggregate, are interested in 275,352,559 ordinary shares of Bellzone, representing 50.2 per cent of the ordinary shares capable of being voted on such a Whitewash Resolution have confirmed in writing to the Panel that they would vote in favour of such a resolution and following receipt of such written confirmations the Panel has granted a waiver from Rule 9 of the Code in respect of the Placing and the Conditional Placing. As a result, China Sonangol will not be required to make a general offer under Rule 9 of the Code and there will be no requirement to put a Whitewash Resolution to a poll of Independent Shareholders at a general meeting.

About China Sonangol

Established in 2004, China Sonangol is a joint venture between Angola's state‐owned oil company, Sonangol E.P., and the Hong Kong‐based company, New Bright International Development. The company initially focused on oil and gas, minerals and reconstruction projects in Africa, but within 10 years, the company grew and diversified into other areas of business such as real estate and transportation projects globally.
Headquartered in Hong Kong, China Sonangol has offices across Africa and Asia. Collectively, China Sonangol employs more than 3,600 people across a range of disciplines.

Total Voting Rights

As a result of the Placing, the total issued share capital of the Company will be 1,031,739,472 ordinary shares of no par value (the "Ordinary Shares"), of which 11,080,130 Ordinary Shares are held by the Company in treasury. The number of Ordinary Shares held in treasury has increased by 75,000 as a result of the reassignment of Ordinary Shares previously held by a blind trust for a number of years. Accordingly, the issued share capital of the Company after the Placing (but before the Conditional Placing) for the purpose of calculating total voting rights will be 1,020,659,342 Ordinary Shares.
The Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

Related Party Transaction

Under the AIM Rules, China Sonangol is a related party of Bellzone. The directors of Bellzone consider, having consulted with Bellzone's Nominated Adviser, Investec Bank plc ("Investec"), that the terms of the Placing and the Conditional Placing are fair and reasonable insofar as the shareholders of Bellzone are concerned.

Bellzone Mining plc
Peta Baldwin, Corporate Affairs +44 (0) 1534 513 500
Investec Securities
Nominated Advisor and Broker
Chris Sim / George Price / Jeremy Ellis +44 (0) 20 7597 5970
Bell Pottinger
Financial Public and Investor Relations
Daniel Thöle +44 (0) 20 3772 2500

This announcement has been issued by Bellzone and is the sole responsibility of Bellzone.
THIS ANNOUNCEMENT IS NOT BEING ISSUED IN THE UNITED STATES OF AMERICA AND MAY NOT BE DISTRIBUTED IN THE UNITED STATES OF AMERICA.
Investec which is authorised by the Prudential Regulation Authority ("PRA") and regulated in the United Kingdom by the Financial Conduct Authority and the PRA, is a member of the London Stock Exchange. Investec is acting exclusively for the Company in connection with the Placing and is not acting for any other person and will not be responsible to any person other than the Company for providing the protections afforded to their customers or for providing advice on the transactions or arrangements referred to in this announcement.
This announcement is for information purposes only and does not constitute an offer or an invitation to acquire or dispose of any securities or investment advice in any jurisdiction.
In particular, this announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for securities in any jurisdiction including, without limitation, the United Kingdom, the United States, Canada, Australia, Hong Kong or Japan. The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933 (the "U.S. Securities Act") and may not be
offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. No public offering of the Placing Shares will be made in the United States.
No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of Bellzone for the current or future financial years would necessarily match or exceed the historical published earnings per share of Bellzone.
The Directors of Bellzone are:
Michael Farrow, Non‐Executive Chairman Glenn Baldwin, Executive director and CEO Terry Larkan, Executive director and CFO
Antony Gardner‐Hillman, Non‐Executive director

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO CANADA, AUSTRALIA OR JAPAN.
THIS ANNOUNCEMENT IS NOT BEING ISSUED IN THE UNITED STATES OF AMERICA AND MAY NOT BE DISTRIBUTED IN THE UNITED STATES OF AMERICA.
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING AND THE CONDITIONAL PLACING MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS
AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE
THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE (1) QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 ("FSMA"), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2.1(e)(i), (ii) OR (iii) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE") AND (2) IN THE UK FALL WITHIN ARTICLE
19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") OR ARE PERSONS WHO FALL WITHIN ARTICLE 49(2)(a) TO (d) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER OR OTHERWISE ARE PERSONS TO WHOM THEY MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN BELLZONE MINING PLC.

This announcement (including this Appendix) does not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for Placing Share or Conditional Placing Shares in any jurisdiction including, without limitation, the United Kingdom, the United States, Canada, Australia, Hong Kong or Japan. This announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Canada, Australia, Japan or in any jurisdiction in which such publication or distribution is unlawful.
The Placing Shares and Conditional Placing Shares referred to in this announcement have not been and will not be registered under the Securities Act and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Placing Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act. The Placing Shares and Conditional Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or Conditional Placing Shares or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.
The distribution of this announcement and the Placing and Conditional Placing Shares and/or issue of the Placing Shares or Conditional Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, China Sonangol or Investec that would permit an offer of such Placing Shares or Conditional Placing Shares or possession or distribution of this announcement or any other offering or publicity material relating to such Placing Shares or Conditional Placing Shares in any jurisdiction where action for that purpose is required. Persons to whose attention this announcement is drawn are required by the Company, China Sonangol and Investec to inform themselves about and to observe any such restrictions.

China Sonangol has entered into a placing agreement dated 10 October 2014 (the "Placing Agreement") with the Company whereby China Sonangol has, on the terms and subject to the satisfaction of certain conditions set out therein, undertaken to subscribe for the Placing Shares or Conditional Placing Shares. The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares or the Conditional Placing Shares.

Application will be made to the LSE for admission of the Placing Shares to trading on AIM ("Placing Admission"). It is expected that the Placing Admission will take place at 8.00 a.m. on 13 October 2014. Subject to the passing of the Shareholder Resolution, application will be made to the LSE for admission of the Conditional Placing Shares on AIM (the "Conditional Placing Admission"). It is expected that the Conditional Placing Admission will take place following the EGM at 08.00 am on 29 October 2014.

The Placing and conditional Placing are conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.
China Sonangol's obligations under the Placing Agreement are conditional on, inter alia:

If any of the conditions above is not fulfilled or, where permitted, waived by China Sonangol in accordance with the Placing Agreement by the stated time and/or date (or such later time and/or date as the Company and China Sonangol may agree), the Placing and/or the Conditional Placing will lapse and the Placing Agreement and, save for certain rights and obligation and certain clauses which continue to apply, the rights and obligations of the parties shall cease and terminate at such time and China Sonangol agrees that no claim can be made by or on behalf of China Sonangol (or any person on whose behalf China Sonangol is acting) in respect thereof.
China Sonangol may, in its absolute discretion and upon such terms as it thinks fit, waive compliance or extend the time and/or date for fulfillment by the Company with the whole or any part of any of the Company's obligations in relation to certain of the conditions in the Placing Agreement. China Sonangol reserves the right to waive or to extend the time and/or date for fulfillment of the relevant conditions in the Placing Agreement. Any such extension or waiver will not affect China Sonangol's commitments as set out in this Appendix.
The Company shall not have any liability to China Sonangol (or to any other person whether acting on behalf of China Sonangol or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally.

No prospectus or other offering document has been or will be submitted to be approved by the UK Listing Authority in relation to the Placing, the Conditional Placing or the Placing Shares or the Conditional Placing Shares. China Sonangol, by participating in the Placing, confirms that it has neither received nor relied on any information, representation, warranty or statement made by or on behalf of any of the Company other than the content of this announcement (including this Appendix), the Placing Agreement and publicly available information required to be published by the Company in accordance with the rules and practices of the London Stock Exchange and neither the Company nor any person acting on the Company's behalf nor any of their Affiliates has or shall have any liability for any decision of China Sonangol or a Placee to participate in the Placing based on any other information, representation, warranty or statement provided that nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation. China Sonangol and each Placee (as applicable) acknowledges, agrees and warrants that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing.

This announcement has been issued by the Company and is the sole responsibility of the Company.
Investec is acting exclusively for the Company in connection with the Placing and the Conditional Placing and is not acting for any other person and will not be responsible to any person other than the Company for providing the protections afforded to their customers or for providing advice on the transactions or arrangements referred to in this announcement.
All times and dates in this announcement may be subject to amendment. The Company shall notify China
Sonangol and any person acting on behalf of China Sonangol of any changes.

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