28th Apr 2006 09:21
Albidon Limited28 April 2006 Suite 1 Hillway House 141 Broadway Nedlands 6009 Western Australia ARBN 107 288 755 ALBIDON LIMITED Tel:(+61(8(9389 6300 Fax:( +61(8(9389 6400 Email: ([email protected] ASX Code: ALB AIM Code: ALD www.albidon.com Market release via electronic lodgement QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 MARCH 2006 Highlights Advanced Exploration • An additional infill drilling program has been completed at the Enterprise Deposit, part of the Munali Nickel Project in Zambia. • Recent drilling has continued to intersect thick, high grade mineralization at both the northern and southern ends of Enterprise. • This program is expected to convert substantial amounts of the previously reported Inferred Resource to the Indicated category (JORC code). • A step-out drill program has commenced with the aim of increasing the Enterprise resource. This resource now has a confirmed strike length of 800m and remains open down dip and along strike to the north. • Substantial progress has been made on the various components of the Bankable Feasibility Study ('BFS') for Enterprise which is scheduled for completion in mid-year. Joint Venture Activity • Drilling resulted in the discovery of high grade platinum-palladium mineralisation at Luwumbu in southwest Tanzania (JV partners Lonmin and Goldstream). • At Selebi-Phikwe in Botswana, the highest priority airborne EM targets were confirmed by follow-up ground geophysics and nickel-copper geochemistry. • Drilling to test the Selebi-Phikwe targets commenced at the end of the quarter (program operated by BHP Billiton). • Energy Ventures Limited finalised planning for an initial drilling program to confirm the status of a number of Albidon's uranium prospects in Zambia. Corporate • 19,482,200 shares and 2,000,000 unlisted options were released from escrow on 26 March 2006. • The cash position at 31 March 2006 was AUD$7,447,979. Outlook • Step-out drilling at Enterprise aimed at expanding the resource. • Exploration drilling will be recommenced to follow up the Voyager discovery at Munali. • The Enterprise BFS will continue, including mine design, metallurgical testwork, hydrological, geotechnical, environmental and social impact studies. • Ongoing discussions will be held with potential offtake customers and banks. • An airborne electromagnetic survey will be undertaken along a 55km length of the Munali Fault system to test for additional conductive targets. This survey will include additional target zones to the south of the Munali region. • A large regional stream sediment sampling program will commence in the Munali region to define areas for follow-up geochemical soil sampling and ground electromagnetic surveying. • Reconnaissance drill testing of combined geochemical and electromagnetic targets will continue at the Selebi-Phikwe nickel project in Botswana. • Follow-up sampling will be undertaken to evaluate the broad nickel and copper anomalies identified in stream sediments at Songea in southwest Tanzania. • Assay results are expected for additional drill holes from the Nkenja Platinum Prospect at Luwumbu in Tanzania. • A program of aircore drilling of Albidon's uranium prospects in southern Zambia will be undertaken by Energy Ventures Limited. 1. Munali Nickel-Copper-Cobalt-Platinum Project, Zambia Albidon Limited 100% Munali (Enterprise Deposit) Feasibility Study Drilling and Resource Definition During the quarter an infill drilling program was undertaken with the aim ofconverting Inferred Resources into the Indicated category, to form thefoundation for the Bankable Feasibility Study for development of the EnterpriseDeposit. A total of 20 holes were completed, with four rigs now on site to accelerate thedrilling program. Some of the better intersections (as previously announced) include: Hole from to Interval (m) Ni % Cu % Co % PGM g/t MAD222 344.95 352.7 7.75 1.88 0.19 0.09 1.15 MAD224 421.81 430.05 8.24 1.91 0.27 0.12 0.92 MAD226 346 362 16 2.53 0.28 0.12 0.94 MAD229 273 296.83 23.83 1.45 0.21 0.08 0.53 inc 7.83 3.09 0.45 0.18 0.90 MAD232 325.75 347 21.25 1.40 0.13 0.07 0.78 inc 7.2 2.33 0.17 0.10 1.11 MAD233 357 386.06 29.06 1.18 0.16 0.06 0.63 inc 10.38 2.01 0.31 0.10 1.10 These results are important as they confirm the presence of extensive zones ofthick, high grade mineralisation at both northern and southern ends ofEnterprise. The Enterprise resource now has a confirmed minimum strike lengthof 800m and is open down dip and along strike to the north. This phase of the drilling program is expected to be completed in April with anupdated resource estimate scheduled for completion by the end of May. Thisresource model will form the basis for the BFS. Metallurgy The metallurgical testwork program continued, with a further 15 tests completedduring the quarter. The program has identified the preferred flow sheet designfor the proposed concentrator, with additional confirmation tests andvariability flotation testwork continuing. This testwork will provide thebaseline data for the sizing of key components of the concentrator. Other BFS Activities Substantial progress was made during the quarter in the following areas: • Engineering and design of concentrator and associated infrastructure, • geotechnical studies, • power supply, • environment impact study, • social impact studies, • negotiation of a Development Agreement with the Government of Zambia, • discussions with potential customers regarding offtake of nickel concentrate, and • review of project finance options with a number of potential lenders to the project. On present indications the BFS will be completed in mid-year. Voyager Prospect and Munali District Exploration Programs Following the arrival of two additional rigs at Munali during the quarter,drilling recommenced to test the poorly understood zone between Enterprise andVoyager. This program will run in parallel with the Enterprise step-outdrilling. District-scale exploration will continue in the next quarter with ahelicopter-borne electromagnetic survey over a 50-km long segment of the MunaliFault Zone. This structure is believed to control the distribution of nickeldeposits in the region. The intention is to test this zone for additionalconductor targets for drill testing. The airborne geophysical program will be accompanied by a very extensive streamsediment geochemical sampling survey designed to identify additional targetsalong major regional fault structures to the south of and parallel to the Munalistructure. 2. Selebi-Phikwe and Tati Nickel-Platinum Projects, Botswana Selebi-Phikwe Project: Albidon Limited 100%, currently funded and operated by BHP Billiton under theExploration Cooperation Agreement (originally operated by WMC) At Selebi-Phikwe, soil geochemical sampling and ground geophysical surveys ledto the confirmation of a number of airborne electromagnetic anomalies as highpriority drill targets in prospective geological settings. Drilling to test these targets commenced at the end of the quarter and willcontinue throughout the coming months. A program, of approximately 3,200m ofreverse circulation drilling will be completed, to provide reconnaissancecoverage of the best targets. Results will be available in the next quarter. Tati Project Joint Venture with Gallery Gold Limited Albidon has exercised the option to enter farm-in agreements in respect ofprojects areas within the Tati Regional tenements. All previous explorationdata from the Tekwane JV and Tati Option to Farm-in areas were re-evaluated inthe light of initial results from limited drilling completed at Tekwane, Kismetand Phoenix South in the third quarter of 2005. A program to evaluate thepotential of remaining targets in the Tati Project has been designed and will beimplemented in the next quarter. 3. Luwumbu Platinum Joint Venture Goldstream Mining NL 90%, Albidon Limited 10% with Lonmin currently earning 70% During the quarter Goldstream announced a significant new high grade PGMdiscovery in a drill intersection 1.5km to the east of the Nkenja PGMmineralisation identified last year. The new high grade zone of PGM mineralisation (drill hole NDH014) returned16.14m @ 5.36g/t Pt+Pd+Au ('2PGE+Au') including 1.67m@ 26.82g/t 2PGE+Au. Thiswas one of eight drill holes completed to test a number of targets. Assayresults from three of the holes are pending. Follow-up drilling is planned for the second quarter. A threefold increase inthe Luwumbu exploration budget for 2006 has previously been announced. This impressive result further demonstrates the potential of the Luwumbu projectand also validates Albidon's commitment to the Songea project area to the south. 4. Songea Nickel-Platinum Project, Tanzania Albidon Limited 100%, currently funded and operated by BHP Billiton under theExploration Co-operation Agreement In late 2005, broad zones of nickel and copper anomalism were identified instream sediment samples and elevated platinum and palladium levels were found insoil geochemical samples. Follow up exploration will focus on those areas ofimmediate interest and consequently three Prospecting Licences have beenrelinquished in the Songea area. A program of fieldwork to evaluate the geochemical anomalies has been plannedfor the next quarter and will include infill sampling and reconnaissancegeological mapping. 5. Zimba Nickel-Copper-Platinum Project, Zambia Albidon Limited 100%, currently funded and operated by BHP Billiton under theExploration Co-operation Agreement Evaluation of geochemical and aeromagnetic data led to the recognition of atarget at the Zimba Project, approximately 200km to the south west of Munali.This target comprises a 15-km long aeromagnetic anomaly which is located along amajor regional fault structure, concealed beneath a thin veneer of post-mineralcover. Broadly spaced geochemical soil sampling identified weak nickel andcopper anomalism where the cover is thinnest or absent. This target will beevaluated with helicopter-borne electromagnetic surveying in the next quarter. 6. Malawi Nickel-Platinum Projects Mpemba Project Albidon Limited 100% Previously acquired geophysical survey data and the results of thereconnaissance drilling program, that confirmed extensive but low gradenickel-copper mineralisation at Mpemba, were re-evaluated during the quarter.This led to the design of a focused program to assess a number of untestedtargets in the next quarter, after which the future of the project will bereviewed. 7. Nefza Zinc-Lead and Copper-Gold Project, Tunisia Albidon Limited 100% Albidon's Nefza tenement covers an area of 4,160 sq km that contains numerousZinc-Lead and Gold-Copper prospects. Work during the quarter included ongoing evaluation of the Zinc-Lead targets,including a number of abandoned zinc mines, some with significant remainingmineralisation. Highlights include the recognition of a near-surface mineralised zone at the BouAouane mine that had not been exploited at the termination of mining activities.This zone contains mineralisation with reported grades up to 5% Zinc. Thestyle of Zinc-Lead mineralisation at Bou Aouane is repeated at many localitiesthroughout the Nefza area and shows similarities to the large Jinding deposit inChina. The compilation and assessment of historical mining data will be completed inthe next quarter and will be used to design the forward exploration program,including drilling. The Company intends to accelerate the pace of the Nefza zincand gold programs and is reviewing a number of options for achieving this,including a possible farm-out or spin-out of the Tunisia projects. 8. Trozza Zinc Project, Tunisia Albidon Limited 100%, subject to a royalty The Trozza Permit is in the process of being transferred to Albidon from BHPBilliton. The Permit has been renewed for a further 3 years. No work was conducted during the period, pending completion of transfer of thetenement. Geophysical targeting and additional drilling are planned at theJebel Touila and Jebel Trozza prospects where zinc mineralization was confirmedin recent drill programs. It is intended that this project will be included inany farm-out or other arrangement covering the Nefza project. 9. Uranium Exploration Agreement, Zambia Exploration Agreement with Energy Ventures Limited Energy Ventures Limited completed planning for a drill program designed toconfirm the status of a number of uranium prospects on Albidon's tenements insouthern Zambia. These prospects have been defined and prioritised on the basisof a review of drilling data and results of other exploration programs completedin the 1970's and early 1980's. The initial program will comprise approximately 120 aircore drillholes for6,500m, and has been designed to test four targets. Dale Rogers Managing Director Full details for all projects including location maps, tenement schedules andtechnical descriptions may be found on the Albidon website at www.albidon.com The Australasian Code for Reporting of Exploration Results, Mineral Resourcesand Ore Reserves (the 'JORC Code') sets out minimum standards, recommendationsand guidelines for Public Reporting in Australasia of Exploration Results,Mineral Resources and Ore Reserves. The information contained in thisannouncement has been presented in accordance with the JORC Code and referencesto "Indicated" and "Inferred Resources" are to those terms as defined in theJORC Code. Information in this report relating to exploration results is based on datacompiled by Mike Dunbar, who is a member of The Australasian Institute of Miningand Metallurgy and acts as a consultant to the Company. Mike Dunbar hassufficient experience, which is relevant to the style of mineralisation and typeof deposit under consideration and to the activity which he is undertaking, toqualify as a Competent Person under the 2004 Edition of the Australasian Codefor reporting of Exploration Results, Mineral Resources and Ore Reserves. MikeDunbar consents to the inclusion of the data in the form and context in which itappears. If you have any queries please contact the Chief Financial Officer and CompanySecretary, Nicholas Day on +61 8 9389 6300 or email [email protected] Appendix 5B Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001. Name of entityALBIDON LTD ARBN Quarter ended ("current quarter")107 288 755 31 March 2006 Consolidated statement of cash flows Cash flows related to operating activities Current quarter Year to date $AUD'000 $AUD'0001.1 Receipts from product sales and related debtors 0 01.2 Payments for: (a) administration (426) (426) (b) development 0 0 (c) production 0 0 (d) exploration and evaluation (2,900) (2,900) 1.3 Dividends received 0 01.4 Interest and other items of a similar nature received 91 911.5 Interest and other costs of finance paid 0 01.6 Income taxes paid 0 01.7 Other (provide details if material) 0 0 (3,235) (3,235) Net Operating Cash Flows Cash flows related to investing activities1.8 Payment for purchases of: (a) prospects 0 0 (b) equity investments 0 0 (c) other fixed assets (109) (109) 1.9 Proceeds from sale of: (a) prospects 0 0 (b) equity investments 0 0 (c) other fixed assets 0 0 1.10 Loans to other entities (40) (40)1.11 Loans repaid by other entities 69 691.12 Recognition of Security Deposits as Cash 0 0 Net investing cash flows (80) (80) 1.13 Total operating and investing cash flows (carried (3,315) (3,315) forward) 1.13 Total operating and investing cash flows (carried (3,315) (3,315) forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 0 01.15 Proceeds from sale of forfeited shares 0 01.16 Proceeds from borrowings 0 01.17 Repayment of borrowings 0 01.18 Dividends paid 0 01.19 Cost of share issue 0 0 Net financing cash flows 0 0 Net increase (decrease) in cash held (3,315) (3,315) 1.20 Cash at beginning of quarter/year to date 10,598 10,5981.21 Exchange rate adjustments to item 1.20 165 1651.22 Cash at end of quarter 7,448 7,448 Payments to directors of the entity and associates of the directorsPayments to related entities of the entity and associates of the relatedentities Current quarter $AUD'0001.23 Aggregate amount of payments to the parties included in item 1.2 441,6231.24 Aggregate amount of loans to the parties included in item 1.10 817,3301.25 Explanation necessary for an understanding of the transactions Salaries and directors fees paid to executive and non-executive directors of the company, for the period aggregated $74,802.82. Administrative and technical services were provided by Mitchell River Group Pty Ltd, a company in which Mr A Cooke, Dr D Windrim and Mr C Burton are directors, for the period aggregated $140,291.19. Executive services and reimbursements of bona fide expenses provided by Hartree Pty Ltd, a company in which Mr A Cooke is a director, for the period aggregated $11,995.11. Directors fees, consultancy fees and reimbursements of bona fide expenses provided by Mineral Commerce Services, a company in which Mr C De Guingand is a director, for the period aggregated $23,060.88. During the quarter Mr Brian Rudd (acting for the Capital Drilling Group) repaid $AUD29,564.72 of a loan for the purchase of a Schramm 685 drilling rig. The aggregate total loan outstanding as of 31/03/06 is $AUD817,329.84. The rig is owned and operated by Brian Rudd and held under trust by Albidon Zambia Limited. Rudd and Capital Drilling is an experienced operator of drilling services in Africa. The rig is to be used at the Company's Munali site in Zambia. The loan bears an interest rate of 7% pa. Until the loan is repaid, Albidon will deduct against the loan 28% of the amounts invoiced by Rudd for rig use. Mr C Burton has a 25% equity interest in the Capital Drilling Group. Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows Nil2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest Nil Financing facilities available Amount available Amount used $AUD $AUD3.1 Loan facilities 0 03.2 Credit standby arrangements 0 0 Estimated cash outflows for next quarter $AUD'0004.1 Exploration and evaluation 3,5184.2 Development - Total 3,518 Reconciliation of cash Reconciliation of cash at the end of the quarter (as Current quarter Previous quartershown in the consolidated statement of cash flows) tothe related items in the accounts is as follows. $AUD'000 $AUD'000 5.1 Cash on hand and at bank 7,448 10,5985.2 Deposits at call 0 05.3 Bank overdraft 0 05.4 Term deposits 0 0 Total: cash at end of quarter (item 1.22) 7,448 10,598 Changes in interests in mining tenements Tenement reference Nature of interest Interest at Interest at beginning of end of (note (2) quarter quarter6.1 Interests in mining tenements relinquished, PL2436/04(Tanzania) 100% subsidiary 100% 0% reduced or lapsed PL3143/2005 (Tanzania) 100% subsidiary 100% 0% PL3144/2005 (Tanzania) 100% subsidiary 100% 0% EPL110/2002R1 (Malawi) 100%subsidiary 100% 0% EPL139/2003 (Malawi) 100% subsidiary 100% 0% EPL148/2004 (Malawi) 100% subsidiary 100% 0% 6.2 Interests in mining tenements acquired or increased Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rightstogether with prices and dates. Total Number Issue price per security (see note 3) Amount paid up per number quoted security (see note 3)7.1 Preference +securities (description)7.2 Changes during quarter (a)Increases through issues (b)Decreases through returns of capital, buy-backs, redemptions 7.3 +Ordinary 89,368,000 89,368,000 securities 7.4 Changes during quarter (a)Increases through issues (b)Decreases through returns of capital, buy-backs 7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a)Increases through issues (b)Decreases through securities matured, converted 7.7 Options 9,100,000 Number Exercise Expiry (description 5.0m USD 0.20 30/06/06 and 2.6m AUD 0.60 30/06/07 conversion 0.3m AUD 0.60 30/04/08 factor) 0.8m AUD 0.60 30/06/08 0.4m AUD 0.75 30/06/087.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter 7.11 Debentures (totals only) 7.12 Unsecured notes (totals only) Compliance statement 1 This statement has been prepared under accounting policies whichcomply with accounting standards as defined in the Corporations Act or otherstandards acceptable to ASX (see note 4). 2 This statement does give a true and fair view of the mattersdisclosed. Sign here: Company secretary Print name: Nicholas Day Date: 28/04/2006 Notes 1 The quarterly report provides a basis for informing the market howthe entity's activities have been financed for the past quarter and the effecton its cash position. An entity wanting to disclose additional information isencouraged to do so, in a note or notes attached to this report. 2 The "Nature of interest" (items 6.1 and 6.2) includes options inrespect of interests in mining tenements acquired, exercised or lapsed duringthe reporting period. If the entity is involved in a joint venture agreementand there are conditions precedent which will change its percentage interest ina mining tenement, it should disclose the change of percentage interest andconditions precedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities The issue price and amount paid up isnot required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting forExtractive Industries and AASB 1026: Statement of Cash Flows apply to thisreport. 5 Accounting Standards ASX will accept, for example, the use ofInternational Accounting Standards for foreign entities. If the standards useddo not address a topic, the Australian standard on that topic (if any) must becomplied with. == == == == == This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ALD.L