29th Apr 2005 07:47
Albidon Limited29 April 2005 Suite 1 Hillway House 141 BroadwayALBIDON LIMITED Nedlands 6009 Western Australia ARBN 107 288 755 Tel:x+61x8x9389 6300 Fax:x +61x8x9389 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 2005 HIGHLIGHTS Focused Exploration • A new resource estimate has been calculated for the Munali nickel deposit in Zambia: 4.1Mt @ 1.35% Ni, 0.17% Cu, 0.07% Co and 0.95g/t Pt+Pd; • The updated resource represents a doubling of nickel grade and an increase of 25% in contained metal over the previous resource estimate; • Based on the new resource a Scoping Study was successfully completed and a Feasibility Study has commenced on the project; • New geophysical targets have been defined within the Munali Intrusion, exploration drilling is planned for the next quarter; • Soil geochemical sampling has confirmed drill targets at the Mpemba nickel sulphide prospect in Malawi, drilling is scheduled to commence in May; • Geological mapping and rock sampling have identified drill targets at the Jebel Touila zinc sulphide project in Tunisia, drill start-up scheduled for early May; and • Additional geochemical sampling has confirmed the discovery of an extensive area of gold mineralization at Kef El Agueb in Tunisia. Joint Venture Activity • Ground geophysical surveys have refined a number of targets for drilling at Tati in Botswana; • Compilation and analysis of geology, geophysics and nickel geochemistry has identified high priority areas for follow up with airborne geophysical surveys at Selebi-Phikwe; and • Heavy mineral sampling and nickel-copper geochemistry have led to the recognition of a highly prospective zone requiring additional sampling at Songea in southwest Tanzania. CORPORATE • 800,000 unlisted options (exercisable at AUD$0.60 on or before 30 June 2007), which were subject to escrow on the Australian Stock Exchange, were released from escrow on the 12th of February 2005. Of these options 66% are still to vest with 33% vesting 1 January 2006 and the balance vesting 1 January 2007. • Cash position at 31 March 2005 was A$7.4m. OUTLOOK • Drilling will be continued at Munali to infill the current Inferred Resource to Indicated status and to define the limits to mineralization which is still open down dip and along strike; • Mineralogical analysis and metallurgical testwork will be undertaken in parallel with the drill program to underpin the first phase of the Feasibility Study; • Drilling will commence at Mpemba when definition of the soil nickel geochemical target has been completed; • Drilling to test geophysical targets and nickel geochemical anomalies at Tati is scheduled for late next quarter; • Drilling of the Touila zinc sulphide and Trozza zinc projects in Tunisia will commence in May; and • Rock and soil geochemical sampling will be continued to follow up the Kef El Agueb gold discovery and several other areas of anomalous geochemistry at Nefza. 1. Munali Nickel-Copper-Cobalt-Platinum Deposit, Zambia Albidon Limited 100% Munali Mineral Resource Estimate A revised resource estimate has been compiled for Munali based on the pre-2004drill database and an additional 10,978 m of drilling completed by Albidonduring 2004. The new resource is based on a 0.7% Ni cutoff and a new geological model ofhigher grade massive to semi-massive sulphide mineralisation over a 700m-longzone within the south-eastern sector of the Munali Intrusion. The Inferred Resource estimate of 4.11Mt @ 1.35% Ni, 0.17% Cu, 0.07% Co and0.95g/t Pd+Pt for 55,500 tonnes of contained nickel is a 25% increase over theprevious resource estimate published in 2003 (44,000t Ni), though derived fromless than half the previous resource tonnage, which currently remains as lowergrade unclassified hanging-wall mineralisation. The recent drilling program hasextended the resource at depth and has focussed on thicker and higher grademineralisation within the broader sulphide zone. Mineralisation is open at depthand along strike. Scoping Study and Feasibility Study Based on the updated resource estimate, a Scoping Study was undertaken in thefirst quarter of 2005 with the objective of evaluating Munali as an undergroundmining operation with production rates between 500,000tpa and 750,000tpa,feeding a simple sulphide flotation plant to produce a bulk Ni-Cu-Co-PGEconcentrate on site. Concentrate grades are expected to be in the range of10-15% Ni. The Scoping Study indicates Munali is economically viable for the mining,processing and concentrate offtake options considered. Based on the results of the Scoping Study a phased Feasibility Study has beenapproved by the Board to provide a definitive assessment of the technical andcommercial aspects of the project required for development. The Feasibility Study will consider: 1. Infill drilling to improve resource classification from JORC Inferred to Indicated status. 2. Detailed mine design and scheduling. 3. Geotechnical studies. 4. Hydrological studies. 5. Metallurgical testwork to enable detailed process flowsheet and plant design. 6. Infrastructure studies, including power supply from the nearby hydroelectric grid. 7. Commercial discussions with potential customers to finalise concentrate offtake terms and therefore transport requirements. 8. Environmental impact studies. 9. Social impact and community benefit studies. 10. Project financing requirements. 11. Statutory approvals and Project Development Agreement with the Government of Zambia. Timetable 2nd Quarter 2005 - Infill drilling and additional metallurgical work.3rd Quarter 2005 - Project review and decision to proceed with engineeringstudies and concentrate marketing negotiations.4th Quarter 2005 - Project financing discussions.2nd Quarter 2006 - Start up of project construction. Planned Drilling and Exploration Program The main objective of the forward program is to complete the ongoing infill andstep out drilling at the Munali resource. This drilling is designed to providesufficient data to improve the resource classification from JORC Inferred toIndicated and also to define the limits to mineralization, which is currentlyopen at depth and along strike. A more broadly-based exploration drilling program will be continued with theobjective of testing geophysical and other targets elsewhere in the Munali hostrock Intrusion and in the surrounding district. In particular the explorationdrilling will test an extensive conductor target recently defined within theIntrusion by a survey utilising the NSAMT technique. 2. Tati and Selebi-Phikwe Nickel-Platinum Projects, Botswana Location: adjacent to the towns of Francistown and Selebi-Phikwe in easternBotswana. Tati Project: Joint Venture with Gallery Gold Limited Gravity and ground magnetic surveys were undertaken to confirm and prioritise anumber of Induced Polarisation ('IP') geophysical targets and soil nickel orcopper geochemical anomalies at Tekwane and adjacent areas between the Selkirkand Phoenix nickel mines. Several targets have been selected for drilling whichis expected to commence at the end of the next quarter. One high priority target was identified in the airborne electromagnetic surveycompleted over the northwestern portion of the option area at the end of 2004.Ground follow up is planned for next quarter. Selebi-Phikwe Project: Albidon Limited 100%, currently funded and operated by WMC under the ExplorationCo-operation Agreement Compilation and detailed analysis of all available geological, geophysical andgeochemical data was completed for the Selebi-Phikwe project area. This includedan assessment of the exploration maturity as documented by historical records ofexploration activity. Based on this work and the results of reconnaissance fieldwork, several targetzones have been identified and the highest priority of these will be covered byan airborne electromagnetic survey. This program will be undertaken in the nextquarter, with the objective of defining conductor targets for ground follow-upand drilling. Nine additional prospecting licences have been awarded to Albidon, which furtherconsolidates the Company's ground position in this nickel district. The newtenements cover an area of 7,926 sq km, bringing the total land position to over17,000 sq km. 3. Luwumbu Platinum-Nickel Project, Tanzania Albidon Limited 10%, project operated by Goldstream Mining NL and funded byLonmin plc Location: Livingstone Mountains of southwestern Tanzania. The program and budget for the Luwumbu 2005 field season has been set atUS$0.85M. The program will include 3,000m of diamond drilling and groundgeophysical surveys to follow-up PGM intersections and to explore for massivenickel sulphide mineralisation. In 2004 the Goldstream/Lonmin Joint Venturediscovered PGM in the Nkenja intrusive with intersections of; Hole Depth (m) Interval (m) Ni % PGE g/t (2E+Au)NDH03 201.00 9.00 0.33 1.56includes 207.00 1.00 0.38 3.27NDH09 23.60 1.00 0.28 3.55 Clearing of geophysical survey grid lines and preparation of drill pads isplanned to commence in May. 4. Songea Nickel-Platinum Project, Tanzania Albidon Limited 100%, currently funded and operated by WMC under the ExplorationCo-operation Agreement Location: southern Livingstone Mountains, southwest Tanzania. Results have now been received for the first phase of a program of Heavy MineralSampling ("HMS") completed over Albidon's exploration licences covering an areaof over 4,100 sq km south and east of Luwumbu. The heavy mineral assemblages andgeochemical data confirm the widespread presence of ultramafic and mafic rockswith abundant chrome-rich corundum possibly indicating widespread contaminationof intrusions with sediments, a prerequisite for the formation of large nickelsulphide deposits. Reconnaissance stream sediment sampling has identified a zone of elevated Ni,Cu, Co, Cr, Fe, Ti, and V stream sediment geochemistry associated with strongmagnetic anomalies along a major fault structure. The highest values of Ni, Cuand Co in the dataset are coincident. Infill geochemical sampling and geologicaltraversing will be undertaken to evaluate the significance of these results. 5. Malawi Nickel-Platinum Projects Location: adjacent to the cities of Blantyre and Lilongwe in central andsouthern Malawi. Mpemba Project Albidon Limited 100% Soil geochemical sampling and geological mapping were completed to confirmhistorical exploration data that define a 3km x 1km nickel anomaly (up to 0.3%Ni, 0.25% Cu) associated with sulphides in mafic intrusion host rocks at MpembaMountain. The position of the geochemical anomaly has been refined and a ReverseCirculation drilling program is scheduled to commence next month. The objectiveis to complete an initial program of 2000m to test the potential for a large,bulk mineable disseminated nickel-copper deposit. Kabeswa and Bua River Projects: Albidon 100%, currently funded and operated by WMC under the ExplorationCo-operation Agreement Detailed interpretation of recently acquired aeromagnetic data led to theidentification of 18 mafic and ultramafic intrusives and soil sampling wascompleted to provide orientation geochemical data over a selection of these.Results from the geochemical sampling will be used to guide future explorationon the project. 6. Nefza Copper-Gold Project, Tunisia Albidon Limited 100% Location: northwestern Tunisia, about 80km to the west of the capital city,Tunis. A reconnaissance geochemical sampling program was completed over a number ofhigh priority broad target zones, mainly in the western and northern portions ofthe tenement. The program was designed to test the gold geochemical response ofmajor NNE and EW-trending fault structures associated with gravity anomalies andappear to control the distribution of volcanic rocks and zones of alteration.Approximately 20% of the area of interest has been covered to date. About 460 stream sediment samples were collected along the prospectivestructures and these were analysed using the BLEG technique ('Bulk LeachExtractable Gold'). Follow-up samples of soils and rocks collected fromanomalous areas were analysed by the fire assay technique. The results identified several zones of anomalous gold values, the mostprominent being at Kef El Agueb in the southwestern part of the Nefza tenement.These results represent a new discovery of gold mineralisation, none waspreviously known in this area. Limited rock chip sampling returned values up to1g/t Au, with soils yielding values up to 0.5g/t (see Figure 2). A number ofsoil samples also have highly anomalous copper contents, up to 1.1% Cu, andfurther work is required to establish whether there is a relationship betweenthe gold mineralisation and historic base metal workings in the region. Several other BLEG anomalies were defined in the initial sampling program andadditional assays are pending for these zones. Additional rock chip sampling and geological mapping is being undertaken toassess the significance of the gold mineralisation at Kef El Agueb. This workhas the objective of defining the overall extent of the mineralised zone andidentifying drill targets. 7. Trozza Zinc Project, Tunisia Joint Venture with BHP World Exploration Inc (BHP Billiton) Location: north-central Tunisia about 120km south of Tunis. At Jebel Touila 3-D modelling has confirmed the drill targets defined bygeological mapping and evaluation of historical mining records. A drill rig hasbeen mobilised to Tunisia and drilling is scheduled to commence early in thenext quarter with the objective of testing for zinc sulphide mineralisationalong a favourable structural position below the transition from zinc oxide tosulphide down-plunge from the old mine workings at Touila. Similarly, geological modelling has confirmed drill targets at Jebel Trozza,north of the zone of high grade zinc oxide mineralisation previously drilled bythe Company. This northern target area will be drilled on completion of thedrill program at Touila. Donal Windrim 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 Information in this report relating to exploration results is based on datacompiled by David Chapman a consultant to the Company, who is a member of TheAustralasian Institute of Mining and Metallurgy and Donal Windrim who isemployed by the Company. David Chapman and Donal Windrim have sufficientrelevant experience to qualify as Competent Persons under the 2004 Edition ofthe Australasian Code for reporting of Exploration Results, Mineral Resourcesand Ore Reserves. David Chapman and Donal Windrim consent to the inclusion ofthe data in the form and context in which it appears. Information in this report relating to Mineral Resources has been reviewed byPaul Payne of Resource Evaluations Ltd. who is a member of The AustralasianInstitute of Mining and Metallurgy. Paul Payne has sufficient experience whichis relevant to the style of mineralisation and type of deposit underconsideration and to the activity which he is undertaking to qualify as aCompetent Person under the 2004 Edition of the Australasian Code for reportingof Exploration Results, Mineral Resources and Ore Reserves. Paul Payne consentsto the inclusion of the data in the form and context in which it appears. If you have any queries please contact the Company Secretary, 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 entity ALBIDON LTD ARBN Quarter ended ("current quarter") 107 288 755 31 March 2005 Consolidated statement of cash flows Current quarter Year to dateCash flows related to operating activities $AUD'000 $AUD'000 1.1 Receipts from product sales and related 0 0 debtors 1.2 Payments for: (a) administration (608) (608) (b) development (c) production (d) exploration and evaluation (999) (999) 1.3 Dividends received 0 0 1.4 Interest and other items of a similar nature 77 77 received 1.5 Interest and other costs of finance paid 0 0 1.6 Income taxes paid 0 0 1.7 Other (provide details if material) 0 0 (1,530) (1,530) Net Operating Cash Flows Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects 0 0 (b) equity investments 0 0 (c) other fixed assets (11) (11) 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 (1,025) (1,025) 1.11 Loans repaid by other entities 0 0 1.12 Recognition of Security Deposits as Cash 0 0 Net investing cash flows (1,036) (1,036) 1.13 Total operating and investing cash flows (2,566) (2,566) (carried forward) 1.13 Total operating and investing cash flows (carried (2,566) (2,566) forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 0 0 1.15 Proceeds from sale of forfeited shares 0 0 1.16 Proceeds from borrowings 0 0 1.17 Repayment of borrowings 0 0 1.18 Dividends paid 0 0 1.19 Cost of share issue 0 0 Net financing cash flows 0 0 Net increase (decrease) in cash held (2,566) (2,566) 1.20 Cash at beginning of quarter/year to date 9,883 9,883 1.21 Exchange rate adjustments to item 1.20 73 73 1.22 Cash at end of quarter 7,390 7,390 Payments to directors of the entity and associates of the directorsPayments to related entities of the entity and associates of the related entities Current quarter $AUD'000 1.23 Aggregate amount of payments to the parties included in item 1.2 1,607 1.24 Aggregate amount of loans to the parties included in item 1.10 1,051 1.25 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 $45,072.75 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 $12,644.36 Administrative 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 $46,869.72 Reimbursements of bona fide expenses provided by Exco Resources Ltd, a company in which Mr A Cooke and Mr C Burton are directors, for the period aggregated $2,024.08 The Company has lent Mr Brian Rudd $AUD1,025,000 for the purchase of a Schramm 685 drilling rig. The rig is to be owned and operated by Brian Rudd and held under trust by Albidon Zambia Limited. Rudd is an experienced operator of drilling services in Africa. The rig is to be transported and used at the Company's Munali site in Zambia. The loan bears an interest rate of 7%. Until the loan is repaid, Albidon will deduct against the loan 28% of the amounts payable for Rudd's drilling services using the Rig. The intention of all parties is to move the loan into a company called Capital Drilling Zambia Ltd in which Mr C Burton will have a 25% indirect interest. Mr C Burton is a director of the parent company of Capital Drilling Zambia Ltd. 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 Nil 2.2 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 0 3.2 Credit standby arrangements 0 0 Estimated cash outflows for next quarter $AUD'0004.1 Exploration and evaluation 2,288 4.2 Development 0 Total 2,288 Reconciliation of cash Reconciliation of cash at the end of the quarter Current quarter Previous quarter(as shown in the consolidated statement of cash $AUD'000 $AUD'000flows) to the related items in the accounts is as follows. 5.1 Cash on hand and at bank 4,768 3,459 5.2 Deposits at call 0 0 5.3 Bank overdraft 0 0 5.4 Term deposits 2,622 6,424 Total: cash at end of quarter (item 1.22) 7,390 9,883 Changes in interests in mining tenements Tenement reference Nature of interest Interest at Interest at beginning of end of (note (2) quarter quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining PL20/2005 100% subsidiary 0% 100% tenements acquired or PL21/2005 100% subsidiary 0% 100% increased PL22/2005 100% subsidiary 0% 100% PL23/2005 100% subsidiary 0% 100% PL24/2005 100% subsidiary 0% 100% PL25/2005 100% subsidiary 0% 100% PL26/2005 100% subsidiary 0% 100% PL27/2005 100% subsidiary 0% 100% PL28/2005 100% subsidiary 0% 100% 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 Amount paid up per number quoted security (see note 3) 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 68,368,000 48,885,800 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 7,800,000 0 Number Exercise $ Expiry (description 2.8m AUD$0.60 30/06/07 and 5m USD$0.20 30/06/06 conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter 7.11 Debentures 0 (totals only) 7.12 Unsecured notes 0 (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: Date: 29/4/2005 Company secretary Print name: Nicholas Day 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:
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