9th Jul 2008 07:00
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ALBIDON LIMITED |
Level 1 |
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62 Colin St |
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West Perth 6005 Western Australia ARBN 107 288 755 Tel:+6189211 4600 Fax: +6189211 4699 Email:[email protected] ASX Code: ALB AIM Code: ALD |
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9th July 2008
Via electronic lodgement
ALBIDON COMMITS TO BANKABLE FEASIBILITY STUDY ON THE CHIRUNDU URANIUM PROJECT, ZAMBIA
HIGHLIGHTS:
The Albidon Board has resolved to maintain its 30% interest in the Chirundu Uranium Joint Venture and commit to funding its share of the Bankable Feasibility Study (BFS) for the Chirundu Uranium Project.
Albidon's joint venture partner African Energy Resources (AFR) completed a Pre-Feasibility Study (PFS) on the Chirundu Uranium Project on the 9 May 2008.
The PFS demonstrates that commercially viable mining of uranium from the Chirundu Uranium Project is possible under the projected uranium price, capital cost and operating cost scenarios used by AFR.
Key points from the successful PFS:
Production of 1.3 Mlb U3O8 per annum over a 5-6 year project life
Open pit mining
Acid heap-leach processing and ion-exchange precipitation
Estimated capital costs US $68 million for pre-production costs with an additional US $21 million deferred costs
Uranium recovery estimated at 85-90% for Njame ores, and over 70% for Gwabe ores.
INTRODUCTION
Albidon's joint venture partner, AFR, completed a PFS on the Chirundu Uranium Project and concluded that it demonstrates commercially viable mining of uranium under the projected uranium price, capital cost and operating cost scenarios examined by AFR. The Board of AFR has approved the commencement of a BFS for the Project. Based on a detailed review of the PFS, Albidon has decided to maintain its 30% interest in the Chirundu Uranium Joint Venture and will contribute to the BFS costs in proportion to that interest. Albidon's share of BFS costs is expected to be in the order of $US2 million.
URANIUM RESOURCES
AFR completed infill and extensional drilling at the Njame and Gwabe uranium deposits in late 2007. Data from these drilling programmes have been used to estimate the following Indicated and Inferred resources, using a 100 ppm U3O8 cut-off grade:
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Resource Class |
Million Tonnes |
Grade ppm U3O8 |
Contained U3O8 Mlbs |
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Resource Class |
Million Tonnes |
Grade ppm U3O8 |
Contained U3O8 Mlbs |
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NJAME |
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| Indicated Resource |
3.9 |
388 |
3.4 |
| Inferred Resource |
5.2 |
275 |
3.1 |
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GWABE |
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| Indicated Resource |
0.9 |
196 |
0.4 |
| Inferred Resource |
4.0 |
303 |
2.6 |
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CHIRUNDU JV PROJECT |
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| Total Uranium |
14.0 |
309 |
9.5 |
Additional infill drilling to convert the resources to Measured and Indicated Resource category will commence for both deposits in the third quarter of 2009 as part of the Bankable Feasibility Study. The joint venture believes there is good potential for locating additional uranium resources that could be processed at the Njame facility through extensions to know mineralisation and from exploration in the Chirundu JV Project and the nearby Kariba Valley JV Project. The latter JV is currently owned 100% by Albidon, with AFR sole-funding expenditure to earn an initial 30% interest. The resources quoted above are on a 100% basis for the Project.
CAPITAL AND OPERATING COSTS
Capital cost estimates have been prepared by AFR and GRD Minproc. The projected capital costs are as follows:
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Area Description |
Bare Cost USD ($m) |
Accuracy Provisions |
Total Cost USD ($m) |
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(%) |
($) |
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Area Description |
Bare Cost USD ($m) |
Accuracy Provisions |
Total Cost USD ($m) |
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(%) |
($) |
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NJAME SITE |
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| Direct Costs |
53.8 |
11.9% |
6.4 |
60.2 |
| Indirect Costs |
6.9 |
10.0% |
0.7 |
7.6 |
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Njame Totals |
60.7 |
11.7% |
7.1 |
67.8 |
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GWABE SITE |
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| Direct Costs |
16.0 |
14.3% |
2.3 |
18.3 |
| Indirect Costs |
2.1 |
10.0% |
0.2 |
2.3 |
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Gwabe Totals |
18.1 |
13.8% |
2.5 |
20.6 |
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CHIRUNDU JV PROJECT |
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| Direct Costs |
69.8 |
12.5% |
8.7 |
78.5 |
| Indirect Costs |
9.0 |
10.0% |
0.9 |
9.9 |
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TOTALS |
78.8 |
12.2% |
9.6 |
88.4 |
Direct costs include construction of the leach pads, leach ponds, processing plant, packaging plant, first fills, power supply, mining equipment and owner's costs. Indirect costs are largely EPCM costs. These capital estimates do not include closure costs or contingency provisions. The Njame site includes the Central Processing Facility, and will be built and operated for three years prior to the commencement of mining and Remote Ion-Exchange operations at Gwabe. The Gwabe capital costs are thus deferred.
AFR has estimated that operating costs will be in the range of US$30 to $40 per pound recovered U3O8. Based on these operating cost estimates, the project yields an acceptable return at the study price of US$65/lb of uranium. Updated operating costs will be estimated after further column leach test work has been completed to determine absolute acid and oxidant consumption. Sensitivity analysis indicates that the project is sensitive to realised uranium price, uranium recovery, mining costs, reagent consumption and reagent costs (largely sulphuric acid). Optimisation programmes to address these sensitivities will be conducted as part of the Bankable Feasibility Study.
Marketing discussions with interested parties have commenced for uranium sales contracts, and discussions with potential sulphuric acid suppliers in Zambia have been initiated.
BACKGROUND
Albidon holds a 30% interest in the Chirundu Uranium Joint Venture, with AFR having earned a 70% interest in the project by delivering the Board-approved Pre-Feasibility Study Report and the Indicated Resource Report. Albidon owns 100% interest in the nearby Kariba Valley and Luano Valley joint ventures, with AFR earning an initial 30% interest by sole-funding exploration programmes on a number of uranium prospects.
The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the 'JORC Code') sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The information contained in this announcement has been presented in accordance with the JORC Code.
Information in this report relating to Mineral Resources has been compiled by Dr Frazer Tabeart (a full-time employee and Managing Director of African Energy) and Mr Lauritz Barnes (who is a consultant to African Energy). Dr Tabeart and Mr Barnes are both members of The Australian Institute of Geoscientists. Dr Tabeart has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person under the 2004 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Barnes has sufficient experience which is relevant to the modelling and resource estimation and to the activity which he is undertaking to qualify as Competent Persons under the 2004 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Tabeart and Mr Barnes consent to the inclusion of the data in the form and context in which it appears.
If you have any queries please contact the Chief Financial Officer, Nicholas Day or Managing Director, Dale Rogers on +61 8 9211 4600 or email [email protected].
Albidon's nominated adviser is RFC Corporate Finance Ltd, contact Stephen Allen +61 8 9480 2500.
Additional information may also be viewed on Albidon's website at www.albidon.com
Related Shares:
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