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Bellzone drops like a rock

SHARE TIP UPDATE: Iron ore miner Bellzone has sharply cut production guidance amid rising costs, leading us to finally exit our heavily underwater buy tip
March 29, 2013

Shares in Bellzone Mining (BZM) plummeted 45 per cent in intraday trading after the iron ore miner cut its export target at its Forecariah joint venture in Guinea from 3m-4m tonnes of iron ore per year (mpta) in 2014 and 2015 to just 1mtpa. Bellzone blamed "the limited quantity of…resources" for the change in plan.

IC TIP: Sell at 6.25p

High costs of about $90 a tonne including shipping fees suggest the project will only be marginally economic if iron-ore prices drop to the low levels experienced last year.

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