31st Jan 2008 07:00
Albidon Limited31 January 2008 LEVEL 1 62 COLIN ST WEST PERTH 6005 WESTERN AUSTRALIA ARBN 107 288 755ALBIDON LIMITED TEL: +61 8 9211 4600 FAX: +61 8 9211 4699 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 December 2007 HIGHLIGHTS: • The main ore zone at the Munali Nickel Project was interceptedin the underground development in late January 2008 two months ahead ofschedule. • Following a review of the construction schedule for the Munaliconcentrator the forecast date for first ore into the mill has been broughtforward to mid-April 2008. • An initial Inferred Resource estimate for the Voyager Depositwas completed. The deposit is 1.2Mt @ 0.9% Ni and 1.1g/t of platinum groupmetals ('PGM') containing 11,500 tonnes of Ni and 43,800 ounces of PGM. • The Enterprise resource has been upgraded with the inclusion ofinfill drilling of the early stoping levels and additional deep drilling. TheIndicated and Inferred Resource for the Enterprise Deposit is now 9.12Mt @ 1.23%Ni and 0.9g/t of PGM at a revised cutoff grade of 0.6% Nickel. • Byrnecut Mining International Limited was engaged as the miningcontractor for the Munali Nickel Project. Byrnecut will expedite undergroundmine development at Munali to reach initial concentrate production in April2008. • The Company has executed placement agreements with JinchuanGroup Limited and ZCCM Investments Holdings Plc to raise US$25 million at aprice of A$3.35 (US$2.95 / £1.45) per share. • The Company has also secured a further US$20 million infinancing from Barclays Capital which has been provided on the same terms astheir initial debt finance. • Following a detailed review of the Munali Project, coststhrough to positive cash flow are forecast at US$ 124m. The Project is fullyfunded. • Semi-massive sulphides have been intersected at the SelibePhikwe Project in drilling on the Sunnyside EM conductor and geochemical target.Assay results are awaited. • A 4,300 line-kilometre regional airborne EM survey hascommenced over major structures in the Sunnyside region. Joint Venture Highlights Chirundu and Kariba Valley Uranium Projects, Zambia (African Energy Resources) • An initial inferred resource estimate has been completed forthe Gwabe uranium deposit in the Chirundu joint venture project, Zambia (4.2million tonnes @ 267ppm U3O8). Songea Nickel Project, Tanzania (BHP Billiton) • Anomalous nickel and platinum assays have been received fromthe initial soil sampling programme at the Liparamba target in southwestTanzania. Nefza Zinc Project, Tunisia (Zinifex) • Drilling at the Nefza zinc project intersected 8.1m @ 11.7% Zn,confirming some of the historically reported drill intersections from the BouAouane prospect. Corporate • The cash position at 31 December 2007 was US$16 million. • 1,545,000 unlisted incentive options were issued during thequarter to employees as follows: Number of Options Exercise Price Exercisable on or Before 295,000 A$3.22 01/11/2009 400,000 A$3.22 01/12/2011 350,000 A$2.88 30/12/2010 100,000 A$2.97 30/12/2010 400,000 A$2.81 01/02/2011 • 508,900 options were exercised during the quarter. • 100,000 options expired during the quarter due to employeesleaving the company. Outlook • Continuing progress on the implementation of safety systems atMunali. • Commence introduction of ISO 9000, 1400, and 08 SAS 1801standards. • Plant construction and support systems such as power supply,water supply to be completed in line with targets. • First ore to the mill in mid-April 2008. • Recommence Resettlement Action Programme. • Continued recruitment and training of mining/processingpersonnel. • Continuation of drilling on the Sunnyside Ni target, Botswana. • Complete ground EM geophysics at the Lipadi nickel target inBotswana and commence drilling, as warranted. • Commence drilling on the Kgwedi nickel target, Botswana. • Complete the regional airborne EM geophysical survey over theSunnyside region of the Selebi-Phikwe Project, Botswana. • Finalise the analysis and interpretation of airborne EM datafor the Songea JV with the aim of defining targets for follow up on the ground. • Complete a Pre-Feasibility Study on the Gwabe and Njame uraniumresources on the Chirundu JV, Zambia. 1. Munali Nickel Project, Zambia Albidon Limited 100% Project Implementation Activities on Site at Munali • Following the introduction of updated policies, procedures andsystems, mine safety showed positive trends during the last quarter of 2007leading to a better than industry average performance. • The Company has contracted an external consulting business(IRCA) to develop an integrated electronic business management system incompliance with ISO 9001, ISO 14001 and OHSAS 18001 during the first half of2008. • Production from drilling and mining operations has beenencouraging with results for the quarter of 540 development metres versus atarget of 380 metres. The main ore zone was intersected for the first time inlate January 2008. • Heavy rains were experienced at the construction site inDecember, however this is not expected to affect the target dates for 'first oreto the mill'. Support systems in and around the concentrator such as powersupply, water supply and other infrastructure projects are progressing to plan. • Recruitment is progressing well and the key positions tosupport the plant production build-up are in place. Preparation for training wasa focus point during this quarter and training materials are planned to becompleted during the first quarter of 2008. • The Resettlement Action Programme was curtailed in December dueto the rainy season. It will recommence in March 2008. All formal agreementswith the community on the relocation of affected families are now in place. • The Enterprise resource was re-estimated during the quarter.The Enterprise resource has been upgraded with the inclusion of infill drillingof the early stoping levels and additional deep drilling. The Indicated andInferred Resource for the Enterprise Deposit is now 9.12Mt @ 1.23% Ni and 0.9g/tof PGM at a revised cutoff grade of 0.6% Nickel. 7.5Mt @ 1.28% Ni and 0.9g/tPGM has been classified as Indicated. • An initial Inferred Resource estimate for the Voyager Depositwas completed. The deposit contains 1.2Mt @ 0.9% Ni and 1.1g/t of platinum groupmetals ('PGM') containing 11,500 tonnes of Ni and 43,800 ounces of PGM at a 0.6%Ni cutoff. Munali District Exploration • Compilation of the regional stream sediment targets and soilsampling results in the Chikani area, 25km south of Munali is ongoing andwaiting on assay results for completion. An additional 257 stream sedimentsamples were collected during the quarter. 2. Uranium Exploration, Zambia Albidon Limited 100% diluting to 30%, currently funded and operated by AfricanEnergy Resources Limited under an Exploration Agreement Albidon's joint venture partner African Energy Resources ('AFR') carried out anumber of sampling and drilling programmes on the Chirundu and Kariba Valley JVprojects, as follows: • An initial resource estimate has been completed for the Gwabeuranium deposit in the Chirundu joint venture project, Zambia (4.2 milliontonnes @ 267ppm U3O8). • Initial assay results from RC drilling at the Chisebuka UraniumProject have confirmed the presence of near-surface sandstone-type uraniummineralisation, with significant grades and thicknesses that may be amenable toopen pit extraction. This discovery is located approximately 75km to thesouth-west of the Njame uranium deposit which African Energy is currentlyevaluating through a Pre-Feasibility Study, due for completion in the nextquarter. • Assay results from reverse circulation drilling at the NjameEast Prospect have confirmed the presence of a new zone of sandstone-hosteduranium mineralisation which is adjacent to the existing Inferred Resource atNjame North (5.5Mt @ 400ppm U3O8). 3. Songea Nickel Project, Tanzania Albidon Limited 100% diluting to 30%, currently funded and operated by BHPBilliton under the Exploration Co-operation Agreement • Joint Venture partner BHP Billiton is currently analyzing the airborneEM geophysical data with a view to identifying conductor targets. • Partial results have been received for the soil geochemical surveysover the Liparamba and Mbinga targets. From these results it is possible tointerpret areas of ultramafics (high Ni, Cr) and areas with a "mineralizationsignature" based on zones of high Ni/Co ratios and high Cu. The nickel mineralpentlandite has been identified at Kitai, however the significance of this hasyet to be established The soil sampling programme at Liparamba has returnedanomalous nickel results, and the best values (in the range of 308-3580ppm Ni)are associated with copper and platinum group metals. 4. Nickel Projects in Botswana Selebi-Phikwe Nickel-Copper Project Albidon Limited 100% Two drill holes of a 14-hole programme have been completed on the Sunnysidenickel target. Visual examination of drill core from drill hole ALB-002identified semi-massive sulfide from 60m to 65m containing visible pyrrhotiteand the nickel mineral pentlandite. Assay results are pending. This confirmsthat sulphides are the source of the conductor anomaly at Sunnyside. A seconddrill rig has been mobilised to site. Ground EM has commenced at the Lipadi nickel prospect, and 4 drill targets havebeen identified at the Kgwedi nickel prospect to the southwest. The airborne EMprogramme covering 4,300 line km over the major Sunnyside structure hascommenced and will be completed in the next quarter. 5. Malawi Nickel-Platinum Projects Mpemba Project Albidon Limited 100% diluting to 25%, currently funded and operated by MM Miningplc Following a detailed project review it was decided to farm-out the Mpemba Hillnickel project in Malawi. A joint venture agreement was signed with MM Miningplc ('MM') whereby MM may earn a 75% interest by sole funding US$1.4 million onexploration within four years. During the quarter MM commenced an initial fieldassessment designed to guide the forward exploration programme. 6. Luwumbu Platinum Project Goldstream Mining NL 90%, Albidon Limited 10% with operator Lonmin currentlyearning 70% During the 2007 field season, a total of 26 core holes were drilled at Nkenjafor 10,204m out of a planned 15,500m core programme. The shortfall in drillmeters was due to a combination of factors including equipment and accessissues. Core assays have been received for 17 drill holes with results pending for theremaining 9 holes drilled in 2007. Best results from 2007 include: Hole From To Width Au Pd ppm Pt ppm Pt+Pd+Au ppm (m) (m) (m) ppmNDH047 301 302 1 0.02 0.56 0.23 0.81NDH049 366 367 1 0.05 0.90 0.05 0.99NDH051 123 124 1 0.04 0.34 0.15 0.53 151 153 2 0.03 0.61 0.17 0.81 199 203 4 0.03 0.61 0.22 0.86including 200 201 1 0.04 1.23 0.03 1.29 205 208 3 0.01 0.14 0.61 0.76including 206 207 1 0.01 0.20 0.90 1.11NDH053 206 208 2 0.05 0.85 0.19 1.09including 206 207 1 0.05 0.95 0.17 1.17 209 210 1 0.01 0.34 0.20 0.55NDH055 131 132 1 0.02 0.33 0.19 0.54NDH058 60 61 1 0.01 0.11 0.13 1.44 116 117 1 0.11 0.36 0.13 0.60 During the quarter, reconnaissance sampling and mapping commenced on regionalprospecting licenses identified as potentially containing ultramaficlithologies. A total of 134 samples (59 soil and 65 rock chip samples) werecollected by season's end, for which assay results are pending. 7. Tunisian Zinc Projects Fernana-Nefza Zinc-Lead and Copper-Gold Project Albidon Limited 100% diluting to 30%, funded and operated by Zinifex Limitedunder an option and earn-in agreement The Bou Aouane prospect includes an area of historical zinc mine workings,closed in 1986. Reports from 1988 describe remnant mineralisation remainingafter the mine closed. The mineralisation at Khatkhadha is one such remnantdeposit. Drill hole BADD003 was drilled within the Khatkhadha mineralisationand had a best intersection of 8.1m @ 11.7% Zn, using a 1.5% Zn cut-off. These drill results support the reports of remnant mineralization at Khatkhadha,close to surface. Lower grade zinc mineralisation has been identified indrilling of adjacent areas and assays for these are pending. Additional drillingis planned. Haffouz Zinc Project Albidon Limited 100% diluting to 30%, subject to a royalty (funded and operatedby Zinifex under an option and earn-in agreement) Work continues on the Haffouz permit (formerly Trozza) with orientation IPgeophysical surveys being completed at the Touila and Trozza prospects. Followup programmes will be decided when interpretation of the orientation survey datahas been completed. 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 (a full time employee of the Mitchell River Group) andJohn Schloderer (a full time employee of Albidon), who are members of TheAustralasian Institute of Mining and Metallurgy. Mr Dunbar and Mr Schlodererhave sufficient experience, which is relevant to the style of mineralisation andtype 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 Codefor reporting of Exploration Results, Mineral Resources and Ore Reserves. MrDunbar and Mr Schloderer consent to the inclusion of the data in the form andcontext in which it appears. If you have any queries please contact the Chief Financial Officer, Nicholas Dayor Managing Director, Dale Rogers on +61 8 9211 4600 or email [email protected]. Albidon's nominated adviser is RFC Corporate Finance Ltd, contact Steve Allen+61 8 9480 2500. 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 LIMITED ARBN Quarter ended ("current quarter") 107 288 755 31 December 2007 Consolidated statement of cash flows Cash flows related to operating activities Current quarter Year to date US$'000s US$'000s1.1 Receipts from product sales and related debtors1.2 Payments for: (a) administration (2,262) (5,312) (b) development (9,076) (20,239) (c) production (d) exploration and evaluation (1,217) (5,330)1.3 Dividends received1.4 Interest and other items of a similar nature 445 1,664 received1.5 Interest and other costs of finance paid (640) (640)1.6 Income taxes paid (80) (80)1.7 Other (provide details if material) Net Operating Cash Flows (12,830) (29,937) Cash flows related to investing activities1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets (20,843) (41,945)1.9 Proceeds from sale of: (a) prospects 250 (b) equity investments (c) other fixed assets1.10 Loans to other entities1.11 Loans repaid by other entities1.12 Recognition of Security Deposits as Cash Net investing cash flows (20,843) (41,695)1.13 Total operating and investing cash flows (carried forward) (33,673) (71,632) 1.13 Total operating and investing cash flows (carried forward) (33,673) (71,632) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 4,971 11,9371.15 Proceeds from sale of forfeited shares1.16 Proceeds from borrowings 26,000 36,0001.17 Repayment of borrowings1.18 Dividends paid1.19 Cost of share issue (41) (41) Net financing cash flows 30,930 47,896 Net increase (decrease) in cash held (2,743) (23,736) 1.20 Cash at beginning of quarter/year to date 17,991 38,4691.21 Exchange rate adjustments to item 1.20 1,366 1,8811.22 Cash at end of quarter 16,614 16,614 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities Current quarter US$'000s1.23 Aggregate amount of payments to the parties included in item 1.2 4361.24 Aggregate amount of loans to the parties included in item 1.10 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 US$241,657. Administrative and technical services provided by Mitchell River Group Pty Ltd, a company in which Mr A Cooke, and Dr D Windrim are directors, for the period aggregated US$170,627. Executive services provided by Hartree Pty Ltd, a company in which Mr A Cooke is a director, for the period aggregated US$4,898. 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 US$18,500. 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 Negotiated a US$20 million increase in debt funding from Barclays Capital.2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest Nil Financing facilities available Amount available Amount used US$'000s US$'000s3.1 Loan facilities 100,000 36,0003.2 Credit standby arrangements Estimated cash outflows for next quarter US$'000s4.1 Exploration and evaluation 6004.2 Development 30,600 Total 31,200 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. US$'000s US$'000s5.1 Cash on hand and at bank 3,163 8285.2 Deposits at call 12,751 17,1635.3 Bank overdraft5.4 Term deposits 700 Total: cash at end of quarter (item 1.22) 16,614 17,991 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, reduced or lapsed6.2 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 quoted Issue price Amount paid up per security number per security (see note 3) (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, redemptions7.3 +Ordinary 156,065,892 156,065,892 securities 7.4 Changes during quarter (a) Increases through issues 258,900 258,900 A$0.60 A$0.60 250,000 250,500 A$0.75 A$0.75 (b) Decreases through returns of capital, buy-backs7.5 +Convertible debt securities (description)7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted7.7 Options 7,003,100 Number Exercise Expiry (description and 158,100 A$0.60 30/06/08 conversion 150,000 A$0.75 30/06/08 factor) 1,200,000 A$0.75 01/12/08 500,000 A$1.05 30/06/09 150,000 A$1.70 01/12/09 1,200,000 A$2.10 27/02/10 750,000 A$2.60 20/05/10 250,000 A$3.14 12/07/10 200,000 A$2.80 12/07/10 300,000 A$2.97 12/07/10 600,000 A$2.23 01/09/10 295,000 A$3.22 01/11/09 400,000 A$3.22 01/12/11 350,000 A$2.88 30/12/10 100,000 A$2.97 30/12/10 400,000 A$2.81 01/02/117.8 Issued during 295,000 Exercisable at A$3.22 expire 01/11/09 quarter 400,000 Exercisable at A$3.22 expire 01/12/11 350,000 Exercisable at A$2.88 expire 30/12/10 100,000 Exercisable at A$2.97 expire 30/12/10 400,000 Exercisable at A$2.81 expire 01/02/117.9 Exercised during 258,900 Exercised at A$0.60 each quarter 250,000 Exercised at A$0.75 each7.10 Expired during 50,000 Exercisable at A$1.05 due to expire 30/06/09 quarter 50,000 Exercisable at A$2.60 due to expire 20/05/107.11 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: 31/1/2008 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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