25th Jul 2005 07:01
Albidon Limited25 July 2005 Suite 1 Hillway House 141 BroadwayALBIDON LIMITED Nedlands 6009 Western Australia ARBN 107 288 755 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 30 June 2005 Highlights Focused Exploration • Feasibility Study commenced on Munali nickel project; • A drill rig has been secured for the term of the Munali Feasibility Study to ensure drilling is completed on schedule; • 65% of Munali resource infill drilling completed, assay results pending; • Metallurgical testwork commenced, extensive sulphide flotation tests ongoing; • Priority exploration targets confirmed throughout Munali district, 2 new licences granted; • Reconnaissance drilling completed at Mpemba in Malawi, results pending; and • Kef El Agueb prospect extended, with up to 1.7g/t Au and 2.4% Cu in rock samples. Joint Venture Activity • Drill targets confirmed at Tati in Botswana, drilling scheduled for August; • Target zones delineated for airborne electromagnetic surveying adjacent to the Selebi-Phikwe nickel mining district; and • High grade zinc sulphide mineralization drilled at Touila in Tunisia. Corporate • BHP Billiton has confirmed it will continue the planned exploration program and budget commitment under the Exploration Cooperation Agreement operated by WMC prior to the takeover by BHPB. • Issued 1,000,000 unlisted options (exercisable at AUD$0.60 on or before 30 June 2008) • Cash position at 30 June 2005 was A$5.4m. Outlook • Assay results for 40 drillholes from Munali due in the next few weeks; • Completion of Munali resource infill drilling; • Resource extension and exploration drilling at Munali; • Drilling of geophysical targets at Tati nickel prospects in Botswana; • Extensive airborne electromagnetic survey at Selebi-Phikwe; • Drilling to extend Nkenja platinum zone in Tanzania; • Airborne geophysics to test for nickel conductor targets at Nkenja; and • Follow-up sampling and target definition at Kef El Agueb gold prospect. 1. Munali Nickel-Copper-Cobalt-Platinum Deposit, Zambia Albidon Limited 100% Munali Feasibility Study Based on the positive Scoping Study announced last quarter, a phased FeasibilityStudy has commenced with the objective of providing a definitive assessment ofthe technical and commercial aspects of developing an underground miningoperation at Munali. The Study envisages a mine production rate between500,000tpa and 750,000tpa feeding a simple sulphide flotation concentrator toproduce a bulk Ni-Cu-Co-PGM concentrate on site. Drilling The first phase of the Feasibility Study is an infill and extensional drillingprogram designed to improve the resource classification from Inferred toIndicated and to define the limits to mineralization which remains open at depthand along strike. The Company secured a reverse circulation (RC) drilling rigduring the quarter to ensure the drill program will be completed on schedule,given the current scarcity of suitable drilling equipment across Africa. A total of 17 diamond drillholes (for 3,243m) and 26 reverse circulationdrillholes (for 3,226m) were completed during the quarter. This constitutesapproximately 65% of the resource infill drilling program. Drill intersectiondepths, thicknesses and visual estimates of nickel grade for mineralisation arein line with expectations. Assays are pending for a total of 2,400 samples fromthis program, and results are expected to be available in the next few weeks,following extensive backlogs at the analytical laboratory. Metallurgy A comprehensive metallurgical testwork program is under way in conjunction withthe drill program. The testwork is focused on nickel sulphide flotation based ondetailed mineralogical studies of the major mineralized domains within theMunali deposit. Results of this program will be announced on an ongoing basis askey milestones are achieved. Taken together, the resource definition drilling and metallurgical testwork willenable a decision in the next quarter to proceed with detailed mine design andscheduling, engineering studies, concentrate marketing and financial analysis. Project Development Approvals Process To ensure timely completion of the Feasibility Study, work has also commenced ona number of longer lead-time but low-cost activities essential to development ofthe project. These include: the initiation of discussions with severalMinistries of the Government of Zambia for a Development Agreement which fixesthe broad royalty and taxation arrangements for a mining operation; preliminarywork on an Environmental Impact Study; and discussions with the Zambianelectricity utility regarding power supply. Key Zambia Appointment The Company is pleased to announce the appointment of Mr Valentine Chitalu asChairman of Albidon Zambia Limited. Mr Chitalu has wide experience ininternational banking and an extensive background in business development insouthern and eastern Africa. He is based in Lusaka and will initially be focusedon facilitating the completion of the Munali Feasibility Study and ensuringeffective liaison with the Government of Zambia. Munali Exploration Three diamond drillholes were completed as an initial test of a very extensivedeep geophysical target (NSAMT conductor) near the eastern contact of the MunaliIntrusion. This program encountered very extensive zones of the iron oxidemineral magnetite, in addition to nickel sulphide mineralization similar to thatpreviously drilled on the eastern side of the Intrusion. Assays are pendinghowever it is likely that the magnetite accounts for the bulk of the NSAMTresponse. A better understanding of the significance of this target will requirefurther deep drilling. Ongoing geological investigations and ground geophysical surveys have continuedto highlight a number of priority exploration targets located along the majorfault structure that contains the Munali Intrusion. Together these targetswarrant a substantial district-scale exploration effort, over and above theongoing Feasibility Study activities. Planning is under way for a majorgeophysics and drilling campaign in 2006, designed to significantly increase theresource base. Two new Prospecting Licences have been granted to Albidon and these cover inexcess of 20,000 square kilometres surrounding the Munali Prospecting Licence.The new tenements are designed to secure the eastern and western extensions ofthe Munali fault structure that is interpreted to control the distribution ofnickel mineralization in the district. 2. Regional Nickel-Platinum Projects, Zambia Albidon Limited 100% Masuku Project Follow-up soil and rock chip sampling has confirmed the presence of nickelsulphide mineralisation and anomalous levels of platinum group metals associatedwith mafic intrusions at Masuku. Infill sampling is required to define adiscrete target for more detailed exploration. Kamoto Project This new project comprises three granted Prospecting Licences over an additional32,500 square kilometres of ground prospective for Ni-Cu and Cu-Aumineralisation in eastern Zambia. 3. 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 Interpretation of ground geophysical surveys undertaken in the Tekwane areaduring the last quarter has been completed and targets selected for drilltesting in the next quarter. A drilling contract is currently being finalizedand drill sites prepared for this program that is expected to commence in thefirst half of August. The Tekwane area covers part of the same intrusive complexthat contains the Phoenix and Selkirk nickel-copper mines, situated 9km northand 5km west respectively. Additional ground geophysical surveys are planned for target areas highlightedby further interpretation of previous geophysical and geochemical surveys in theKismet area some 15km west of Tekwane, and to the north, between Tekwane andPhoenix. At least two of these target areas will be drill tested as part of thedrill program mentioned above. Selebi-Phikwe Project: Albidon Limited 100%, currently funded and operated by BHPBilliton under theExploration Co-operation Agreement (originally operated by WMC) Based on a detailed area selection process, an airborne electromagnetic (AEM)survey will commence in August with the objective of defining conductor targetsassociated with nickel sulphide mineralistion. The AEM survey will cover an areain excess of 1,800 square kilometers of highly prospective ground to the eastand southeast of the Selebi-Phikwe nickel mining district. 4. Luwumbu Platinum-Nickel Project, Tanzania Albidon Limited 10%, project operated by Goldstream Mining NL and funded byLonmin plc Location: Livingstone Mountains of southwestern Tanzania. Access tracks and drill pads have been constructed in preparation for a 3000mdiamond drilling program scheduled to commence in August. This program willfocus initially on locating extensions of the platinum-nickel mineralizationdiscovered at Nkenja in 2004. An airborne electromagnetic survey utilizing the VTEM system will be undertakenover the Nkenja intrusion in August in order to locate nickel conductor targetsassociated with the zone that contains the known platinum mineralization. 5. Songea Nickel-Platinum Project, Tanzania Albidon Limited 100%, currently funded and operated by BHPBilliton under theExploration Co-operation Agreement Location: southern Livingstone Mountains, southwest Tanzania. Based on the positive results obtained from the heavy mineral sampling andgeochemical sampling carried out in 2004, a systematic evaluation of Ni-PGManomalous areas is being planned for the 2005 field season. High density infillgeochemical sampling including airborne or ground geophysics is planned for theremainder of the field season. An additional two licenses totalling 951 square kilometres were granted toAlbidon during the period. This ground was acquired over prospective areasidentified as a result of the reconnaissance fieldwork carried out during 2004on existing tenements and subsequent correlation of results and interpretationwith adjacent areas. The initial focus will be on evaluating Cu-Pt prospectsreferred to in historical reports. 6. Malawi Nickel-Platinum Projects Location: adjacent to the cities of Blantyre and Lilongwe in central andsouthern Malawi. Mpemba Project Albidon Limited 100% A total of 18 reverse circulation (RC) drill holes have been completed in awidely-spaced reconnaissance drilling program over Mpemba Mountain for 1,763m.The aim of the program is to test the potential for a bulk-mineable low gradenickel-copper deposit beneath the extensive soil geochemical anomaly reportedpreviously. Detailed geological logging and assay results for the RC drill cuttings arepending. Katakwi and Bua River Projects Albidon 100% The Katakwi tenement was reduced in size by 50% this quarter to 1,818 Km(2).This reduced licence area covers all the priority magnetic anomalies identifiedduring the airborne survey conducted during 2004. Linthipe Project Following a data review the low priority Linthipe tenement has been relinquishedin the absence of any compelling exploration targets for follow-up. 7. Nefza Copper-Gold Project, Tunisia Albidon Limited 100% Location: northwestern Tunisia, about 80km to the west of the capital city,Tunis. Extensive fieldwork during the quarter included additional regional-scale streamsediment geochemical sampling over broad geological target areas, and follow-upsoil and rock sampling at the Kef El Agueb and Oued Belif gold prospects. At Kef El Agueb, the soil geochemical grid was extended a further 2km alongstrike to the northeast and assays have now confirmed a strike length of 7km forgold mineralization in this area. Detailed geological mapping and structuralstudies have been used to design an infill soil and rock sampling campaign thatyielded up to 1.7g/t Au over 3m of outcrop at one locality. The prospect is alsomarked by locally strong copper mineralization, with up to 2.4% Cu in outcrop.Detailed mineralogical and structural studies will be undertaken to guide futureexploration at Kef El Agueb. At Oued Belif, additional soil sampling has defined a coherent Au-As-Cu-Zn-Pbanomaly over a strike length of 1.6km, thereby significantly extending the knownmineralization within the Oued Belif Breccia Complex. The regional-scale reconnaissance sampling program was continued during thequarter and was successful in identifying two new gold anomalies, at Sedjane andBou Salem. Follow-up sampling is under way. 8. Trozza Zinc Project, Tunisia Joint Venture with BHP World Exploration Inc (BHP Billiton) Location: north-central Tunisia about 120km south of Tunis. The Jebel Trozza and Jebel Touila zinc prospects were drill tested during thequarter. Five drillholes were completed at Trozza for a total of 432m. Two holeswere completed at Touila for 564m, and two holes had to be abandoned due todifficult ground conditions. Significant mineralised intersections and drill collar coordinates are listed inthe following tables: Drill Intersections and Assay Results Project Hole ID From To Interval Zn (%) Pb (%) Touila TOD002 171.6 175.6 4.00 6.49 1.05 including TOD002 171.6 173.4 1.80 13.62 2.25 Trozza JTD006 59.90 62.55 1.90 7.74 0.18 JTD006 66.00 69.25 3.25 2.47 0.01 JTD007 50.80 57.00 5.95 1.59 0.06 Collar Project Hole_ID Easting Northing Total Depth (m) Dip Azimuth Trozza JTD005 552,890 3,935,951 96.5 -60 136 JTD006 553,179 3,936,504 77.2 -60 114 JTD007 553,189 3,936,335 68.0 -60 96 JTD008 552,850 3,935,989 121.0 -58 133 JTD009 552,986 3,936,172 69.5 -58 105 Touila TOD001 562,440 3,919,606 215.2 -71 356 TOD002 562,329 3,919,643 213.5 -69 62 The drilling at Jebel Touila was successful in confirming the presence ofstratabound high grade zinc sulphide mineralisation down-plunge from thehistoric zinc oxide mine workings (3.05m @ 8.2% Zn, 1.3% Pb, including 0.8m @26% Zn, 5% Pb). The mineralised zones encountered to date are relatively thin,however as the base of the target geological horizon is faulted in bothdrillholes it is as yet unclear whether the thickness is limited by structure orsome other control. At Jebel Trozza, the drilling was designed to test the northerly extension of azone of zinc oxide mineralisation drilled by Albidon in 2002. The program wasagain successful in locating significant zinc oxide mineralisation (2.65m @ 7.7%Zn, with 1.9m of core recovery). This drilling has confirmed the target modeland also intersected primary zinc sulphide for the first time at Trozza,suggesting the potential for a deeper sulphide target. The mineralised zone isopen to the north and down-dip. A review of all data for Trozza and Touila will be undertaken with the aim ofidentifying the optimal forward exploration program. Albidon intends to focusits efforts on the Company's nickel projects so a farm-out or spin-out will beconsidered for these zinc projects, as well as the Nefza copper-gold property. 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 Donal Windrim who is employed by the Company. Donal Windrim hassufficient relevant experience to qualify as a Competent Person under the 2004Edition of the Australasian Code for reporting of Exploration Results, MineralResources and Ore Reserves. Donal Windrim consents to the inclusion of the datain the form and context in which it appears. 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 entity ALBIDON LTD ARBN Quarter ended ("current quarter") 107 288 755 30 June 2005 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 (214) (822) (b) development (c) production (d) exploration and evaluation (1,692) (2,691)1.3 Dividends received 0 01.4 Interest and other items of a similar nature 55 132 received1.5 Interest and other costs of finance paid 0 01.6 Income taxes paid 0 01.7 Other (provide details if material) 0 0 (1,851) (3,381) 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 (30) (41)1.9 Proceeds from sale of: (a) prospects 0 0 (b) equity 0 0 investments (c) other fixed 0 0 assets1.10 Loans to other entities (128) (1,153)1.11 Loans repaid by other entities 0 01.12 Recognition of Security Deposits as Cash 0 0 Net investing cash flows (158) (1,194)1.13 Total operating and investing cash flows (2,009) (4,575) (carried forward) 1.13 Total operating and investing cash flows (2,009) (4,575) (carried 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 (2,009) (4,575) 1.20 Cash at beginning of quarter/year to date 7,390 9,8831.21 Exchange rate adjustments to item 1.20 26 991.22 Cash at end of quarter 5,407 5,407 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 $AUD'000 1,607 1.23 Aggregate amount of payments to the parties included in item 1.2 1,285 1.24 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 $127,544.94 Executive and geotechnical services provided by Hartree Pty Ltd, a company in which Mr A Cooke is a director, for the period aggregated $11,075.86 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 $79,483.36 Reimbursements of bona fide expenses provided by Lion Manager Pty Ltd, a company in which Mr M Brook is a director, for the period aggregated $8,152.30 Administrative services provided by Verona Capital Pty Ltd, a company in which Mr C Burton is a director, for the period aggregated $16,500.00 During the quarter the Company has lent Mr Brian Rudd $AUD 154,282.96 as part of the purchase of a Schramm 685 drilling rig. The aggregate total loan outstanding is $AUD1,285,273.09. 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 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 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 0 3.2 Credit standby arrangements 0 0 Estimated cash outflows for next quarter $AUD'0004.1 Exploration and evaluation 800 4.2 Development 0 Total 800 Reconciliation of cash Reconciliation of cash at the end of the quarter Current quarter Previous quarter(as shown in the consolidated statement of cashflows) to the related items in the accounts is as $AUD'000 $AUD'000follows.5.1 Cash on hand and at bank 3,437 4,7685.2 Deposits at call 0 05.3 Bank overdraft 0 05.4 Term deposits 1,970 2,622 Total: cash at end of quarter (item 1.22) 5,407 7,390 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 EPL109/2002 - relinquished 100% subsidiary 100% 0% tenements relinquished, (Malawi) reduced or lapsed 6.2 Interests in mining PLLS245 (Zambia) 100% subsidiary 0% 100% tenements acquired or increased PLLS246 (Zambia) 100% subsidiary 0% 100% PLLS247 (Zambia) 100% subsidiary 0% 100% PLLS248 (Zambia) 100% subsidiary 0% 100% PLLS250 (Zambia) 100% subsidiary 0% 100% PLR 3144/2005 (Tanzania) 100% subsidiary 0% 100% PLR 3143/2005 (Tanzania) 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 security (see note 3) Amount paid up per security (see note 3) number quoted7.1 Preference +securities (description)7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions7.3 +Ordinary 68,368,000 48,885,800 securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs7.5 +Convertible debt securities (description)7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted7.7 Options 8,800,000 Number Exercise $ Expiry (description 2.8m AUD$0.60 30/06/07 and 1.0m AUD$0.60 30/06/08 conversion 5.0m USD$0.20 30/06/06 factor)7.8 Issued during Number Exercise $ Expiry quarter 1.0m AUD$0.60 30/06/087.9 Exercised during quarter7.10 Expired during quarter7.11 Debentures 0 (totals only)7.12 Unsecured 0 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: Date: 21/07/2004 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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