BSG Resources (Guinea) Limited ("BSGR Guinea"), is a natural resources company focusing on iron ore as well as bauxite in the Republic of Guinea. Its two main projects are the iron ore deposits in Simandou South called Zogota and Fouama, and the iron ore deposits in Simandou Blocks 1 and 2. The latter deposits were awarded to BSGR Guinea in December 2008 and ratified by the Government of the Republic of Guinea in February 2009. Definitive confirmation has been received from the Ministry of Mines and Energy and the President of the Republic of Guinea that BSGR Guinea's exploration licenses for Simandou Blocks 1 and 2 are valid and have been ratified.
BSGR Guinea has been conducting exploration activities, which include airborne geophysical surveys, field mapping and a first drilling phase, in Simandou South since 2007. It is now in Phase 2 of its exploration programme and a feasibility study for Simandou South is scheduled for completion early in 2010. Initial indications are that Simandou South could contain up to 500 million tonnes of good quality hematite at an average of 60% Fe. The feasibility study will determine the mining and processing capacity of these deposits but targeted production of Direct Shipping Ore ("DSO") is between 20 and 40 million tonnes per annum. BSGR Guinea envisages first production of DSO from Simandou South in 2012.
Exploration activities in Simandou Blocks 1 and 2 started in March 2009. As well as the two drilling companies used in Simandou South, BSGR Guinea has engaged a third drilling company to expedite its goal of completing a feasibility study by the end of 2010 or latest Q1 of 2011. BSGR Guinea's initial estimates based on field mapping carried out by its geologists, indicate some 5 billion tonnes of high quality hematite (60 to 67% Fe). In addition, indications are that a large deposit of magnetite of between 10 and 15 billion tonnes (+-40% Fe) is present in the concessions. BSGR Guinea envisages first production of DSO from Simandou Blocks 1 & 2 in 2013.
BSGR Guinea has engaged reputable independent consultants to assist with various aspects of the feasibility studies, in particular rail transport, port design and social and environmental studies. Final scoping study reports were received in May 2009, which will form the basis of the feasibility studies.
