Positive Independent Conceptual Study completed on the Mankayan Copper/Gold Project, Philippines

¤----¤

Highlights:

·      Conceptual study confirms the technical and economic feasibility of the Mankayan Project and the viability of potentially progressing to a pre-feasibility study phase

·      Financial analysis returned an estimated pre-tax net present value (NPV) of US$459 million at a 7.75% discount rate and a pre-tax internal rate of return (IRR) of 12.71%, based upon a copper price of US$3.00 per pound and a gold price of US$1,000 per ounce

·      Estimated pre-tax net cash flow over the duration of the project of approximately US$5.1 billion

·      At current metals prices (US$4.30 per pound of copper and US$1,370 per ounce of gold) the project returns an estimated:

o  pre-tax NPV of approximately US$1.51 billion at a 7.75% discount rate

o  pre-tax net cashflow of approximately US$10.56 billion

o  pre-tax IRR of 21.63%

·      Study modelled a 12 million tonnes ("Mt") per annum, block caving operation over an estimated 42 year mine life

·      Total capital investment of approximately US$1.2 billion over the duration of the project

·      Low mining, milling and processing costs of US$15.37 per ore tonne

·      Total estimated costs of US$21.01 per ore tonne, including all royalties, capital costs, equipment ownership, operating and processing costs and administrative and technical services costs

Bezant (AIM: BZT), the AIM listed gold and copper exploration and development company operating in the Philippines, Argentina and Tanzania, is pleased to announce the completion of the independent Conceptual Study (the "Study") on its approximate 400Mt Mankayan Copper/Gold Project (the "Mankayan Project"), located approximately 260km north of Manila in the Philippines.

1.  Introduction

Bezant commissioned TWP Australia Pty. Limited ("TWP") and Mining Plus Pty. Limited ("Mining Plus") to undertake a conceptual (technical and economic) study on its Mankayan Project in the Philippines.  The Study specifically focused on determining a conceptual mining, extraction and processing method.

The scope of the comprehensive Study included the following:

·      Resource description & reserve statement;

·      Mining study / block cave design;

·      Vertical shaft ore extraction system study;

·      Ventilation and refrigeration study;

·      Surface infrastructure study;

·      Processing facility study;

·      Geotechnical and hydrogeological assessments of the ore body against the proposed mining method;

·      Completion of a scoping level mine design and an integrated mine schedule;

·      Compilation of mine equipment and manning schedules;

·      Access strategies, capital and operating cost estimates; and

·      Economic viability and financial evaluation of the project.

2. Overview of Study's Technical Results

The Company announced maiden JORC Ore Reserve and Mineable Inventory statements, commissioned as part of the Study, on 17 December 2010, comprising Probable Ore Reserves of 189 million tonnes at 0.46% copper and 0.49g/t gold and resulting in total Recoverable Metal Reserves of 811,000 tonnes of copper and 2,210,000 ounces of gold.  The total Mining Inventory is approximately 400Mt of ore at an average grade of 0.38% copper and 0.42g/t gold, equating to approximately 1.4 million tonnes of copper and 3.9 million ounces of gold, the latter relating to all of the indicated, inferred and unclassified material incorporated by the mine design.

The conceptual mine design completed for the Study utilised a block caving mining method.  Block caving is considered to be an appropriate and common method to mine large deposits, such as that encountered at Mankayan, provided the characteristics of the rock mass lend the ore body to be suitable for caving.  The Study applied the general principles of block cave mining to the Mankayan deposit and considered the distinct characteristics of the ore body.  It presented an overall mine layout in accordance with the highest industry standards.

An annual mine production rate of 12 million tonnes per annum ("Mtpa") was selected, resulting in a mine life of 42 years, which was seen to be well within thecapabilities of the ore body.  At a draw down rate of 100 millimetres per day, approximately 12 Mtpa per lift would be produced. 12 Mtpa was identified by TWP as being the maximum tonnage capable of being hoisted through a single shaft hoisting configuration, derived from benchmarking shaft haulage at some of the world's biggest underground mines, including those within Australia, specifically those block caving mines that are mining up to 500 metre ore columns. 

Due to the size and geometry of the Mankayan deposit, the determination of the block cave lift was considered analogous to that of Rio Tinto's North Parkes block cave operations in Australia.  The column height chosen for the Mankayan deposit was therefore 350 metres, deemed to be the mostsuitable height for the ore body.  The block cave has been split into two lifts, whereby the Lift 1 extraction level has been placed at 769m below surface (811mRL) and the Lift 2 extraction level at 1125m below surface (455mRL).  Laterally, the location of each lift was determined by firstly positioning Lift 2 at the bottom of the ore body, whereby the footprint would cover the majority of the ore without including any waste.  Lift 1 was then positioned approximately 350 metres above Lift 2, but also positioned to ensure that the majority of the Lift 1 ore development would also be caved by Lift 2, the level at which the base of the lift would begin.

The conceptual mine comprises a ventilation shaft, a haulage shaft for ore hoisting and a decline ramp used primarily to transport personnel to and from the mine workings, as well as to haul waste to the surface dumps.  This allows for uninterrupted ore haulage through the shaft without incurring delays for the transportation of personnel.

The major surface infrastructures are sited at least 300 metres away from the cave zone such that stresses generated from the caving operation should have minimal impact.  Due to the size of the ore body, a crusher is required on the eastern and western side of each lift. The conceptual mine is designed such that all water underground will flow to sumps or drainage holes that link to a central pumping station developed at the bottom of the decline.  A workshop has also been designed near Lift 1, close to the return airway.

The block cave layout was designed such that each mining lift will have an undercut level, an extraction level, a fresh airway level, a return airway level and a crushing/conveying level. 

The concentrator design was based on Australian and international experience of proven operations, with high-throughput copper-gold ore treatment.  The single processing line incorporates two-stage milling in closed circuit with cyclones, flash flotation cells and dedicated flash cleaner cells.  A pebble crusher operates in closed circuit with the primary mill.

Mill cyclone overflow gravitates to rougher and scavenger flotation.  Rougher concentrates are reground before cleaning.  Scavenger and cleaner scavenger tails are thickened before discharge to the tailings storage facility.  Copper and a portion of the gold are recovered by froth flotation to a copper sulphide concentrate, that is then sold to international or local smelters.  The remaining gold is recovered on site as bullion, by gravity concentration of the flash flotation concentrate.

Concentrator operating costs were based on an estimate of consumables such as mill liners, steel balls, flotation reagents, water and electrical power.  Flotation reagent cost estimates allow for the use of modern high-technology selective copper/gold collectors.  Cyanide is not used in any part of the process.

3. Overview of Study's Financial Results

The Study returned an estimated pre-tax NPV of US$459,223,481 and a post-tax NPV of US$199,331,693, at a 7.75% discount rate and based upon long-term commodity prices of US$3.00 per pound (US$6,614 per tonne) for copper and US$1,000 per ounce of gold, along with various cost assumptions.  An assessment of the project's economics estimated a pre-tax IRR of 12.71% and a post-tax IRR of 10.23%.

Using current metals prices of US$4.30 per pound of copper and US$1,370 per ounce of gold, the project would have a pre-tax NPV of approximately US$1.51 billion and pre-tax IRR of 21.63% at a 7.75% discount rate with a net cashflow before tax of approximately US$10.56 billion and post-tax of approximately US$7.13 billion.

A total cost of US$21.01 per ore tonne (including royalties, capital costs, equipment ownership, operating and processing costs and administrative and technical services costs) was determined from the capital and operating cost estimates compiled, of which mining, milling and processing costs represent US$15.37 per tonne.  At metals prices of US$3.00 per pound of copper and US$1,000 per ounce of gold, the project is estimated to generate revenue of US$33.72 per tonne, resulting in a net cashflow before tax of approximately US$5.08 billion and post-tax of approximately US$3.38 billion.

4.  Summary statistics

The key operational and economic parameters for the Mankayan Project, as set out in the Study, are summarised below:

As in all aspects of mining evaluation, there are uncertainties inherent in the interpretation of geological and technical data and economic factors.  All conclusions by TWP and Mining Plus represent only their informed professional judgments.  

Gerry Nealon, Executive Chairman, commented: 

"We are extremely pleased with the positive results of the independent conceptual/scoping study, which clearly validates the Company's belief in the overall technical and economic feasibility of its flagship Mankayan Project.

The conceptual study designed and modelled a world class mine incorporating a vertical shaft, a ventilation shaft and a decline ramp, along with state of the art processing and refrigeration plants.  Although not strictly required and being somewhat capital intensive, multiple entry and exit points with relatively high level ventilation and refrigeration structures were included in the study in order to model and cost the project in accordance with the highest prevailing international standards and practices.

Today's scoping study results, combined with our recently announced JORC compliant maiden Probable Ore Reserve and Mineable Inventory statements, reinforces the capability of the project hosting a world class copper/gold mine."

Dr Bernard Olivier has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person, as required under the AIM rules.  Dr Olivier is Technical Director of the Company and a Member of the Australasian Institute of Mining and Metallurgy.

For further information, please contact:

Gerry Nealon

Executive Chairman, Bezant Resources Plc                            Tel: +61 41 754 1873

Bernard Olivier

Technical Director, Bezant Resources Plc                               Tel: +61 40 894 8182

Evan Kirby

Non-Executive Director, Bezant Resources Plc                        Tel: +61 41 221 2827

James Harris / Matthew Chandler / David Altberg

Strand Hanson Limited                                                           Tel: +44 (0)20 7409 3494

James Maxwell

Singer Capital Markets Limited                                               Tel: +44 (0)20 3205 7500

Laurence Read / Beth Harris

Threadneedle Communications (UK)

Email: Laurence.Read@threadneedlepr.co.uk                          Tel: +44 (0)20 7653 9855

                                                                                            Mob: +44 (0)7979 955 923

or visit http://www.bezantresources.com

Notes to editors:

Bezant is currently focussed primarily on the copper and gold mineral sector and its core flagship project remains its Mankayan copper/gold project situated in the Mankayan-Lepanto mining district of the Philippines, an area of established copper and gold mining.  The deposit is located approximately 260km north of Manila and 6km east of the copper/gold mine owned and operated by Lepanto Consolidated Mining Company.  Since its discovery in the early 1970s, extensive drilling (more than 45,000 metres over 48 holes) and metallurgical work has been undertaken by Goldfields Asia Ltd., Pacific Falkon and others.  Bezant currently has a JORC compliant mineral resource of 221.6 million tonnes Indicated and 36.2 million tonnes Inferred, grading at 0.49% for copper and 0.52g/t for gold, at a 0.4% copper cut-off.  This equates to an Indicated Resource of 2.42 billion pounds (1.1 million tonnes) of copper and 3.7 million ounces of gold, with a further Inferred Resource of 0.44 billion pounds (0.2 million tonnes) of copper and 600,000 ounces of gold. The Company has recently upgraded this resource to estimated Probable Ore Reserves of 189 million tonnes at 0.46% copper and 0.49g/t gold resulting in total Recoverable Metal Reserves of 811,000 tonnes of copper and 2,210,000 ounces of gold with a total Mining Inventory of approximately 400Mt of ore at an average grade of 0.38% copper and 0.42g/t gold.

TWP

Founded in 1982, TWP has grown into a highly capable ISO 9001:2000 accredited multi-disciplinary resource and infrastructure focused project design house providing a full range of mining, process, energy, infrastructure and project management solutions.  TWP commenced operations in Australia during 2006 as a subsidiary of TWP Holdings Limited, part of the Basil Read Group in South Africa.  The company's project portfolio has a capital value of more than US$10 billion with offices located in Australia, South Africa, Zambia, Mozambique, Abu Dhabi and Peru (www.twpaustralia.com.au).

Mining Plus

Mining Plus is an innovative and practical consultancy company located in Perth, Melbourne and Kalgoorlie with affiliates overseas. It provides technical consulting services to Australian and International mining and exploration companies with experience of similar conceptual mining studies for a range of clients and commodities throughout the world (www.miningplus.com.au).

Glossary of technical terms: