14th Dec 2005 09:12
Albidon Limited14 December 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 via electronic lodgement Decision to Proceed with Final Stage of Bankable Feasibility Study on EnterpriseNickel Deposit HIGHLIGHTS • Albidon's Board has approved the final stage of the BankableFeasibility Study on the Enterprise nickel deposit at Munali in Zambia. • The decision to complete the full BFS is based on targets beingexceeded on the Mineral Resource Estimate and Metallurgical Performance. • Other major components of the BFS are proceeding on schedule, includingpreparation of a draft Project Development Agreement, completion of a MiningLease Application and Environmental Impact Assessment. • The Bankable Feasibility Study is due for completion in the first halfof 2006. • A successful outcome for the BFS would lead to completion of ProjectFinancing arrangements in mid-2006 with commencement of project construction assoon as possible thereafter, and first nickel production in 2007. Approval of Final Stage of Bankable Feasibility Study on Enterprise NickelDeposit Albidon's Board announced in April 2005 the approval of the first stage of aphased Bankable Feasibility Study ('BFS') on the Enterprise nickel deposit atMunali in Zambia. Approval of the second, final stage of the BFS was conditionalon the success of the first phase which was focused on two key areas, namely:improving the resource classification from 'Inferred' to 'Indicated'; andconfirming satisfactory metallurgical performance. The Company has now formally decided to proceed with the final stage of the BFSbased on the initial targets being achieved for both Mineral Resource andMetallurgical Performance. These targets have in most respects been exceeded. Mineral Resource for Enterprise Deposit The mineral resource estimate is now 6.93Mt @ 1.4% Ni, 0.2% Cu, 0.08% Co and 1g/t PGM (JORC Indicated and Inferred Resource). This represents an inventory of97,000 tonnes of contained nickel, an increase of 75% over the resource estimatepublished in the Munali Scoping Study (April 2005). All of the April 2005Inferred Resource has now been converted to the Indicated category. It is expected that ongoing drilling will further increase the size of theEnterprise deposit which remains open along strike to the north and down dip.Drilling is also continuing to follow-up the Voyager discovery to the north ofthe Enterprise deposit, with the objective of further increasing the nickelinventory of the overall project. Metallurgical Performance Conventional sulphide flotation testwork has successfully produced high qualityNi-Cu-Co-PGM concentrates with satisfactory metal recoveries. Representativeconcentrate specifications are as follows: 12% Ni, 1.5% Cu, 0.7% Co and 8.6g/tPGM. These results indicate that a commercially attractive concentrate can beproduced in a straightforward processing plant at Munali. In addition to the high nickel grade and substantial by-product credits forcopper, cobalt, platinum and palladium, the high Fe/MgO ratio (typically 10 to12) is a feature of Enterprise concentrates that is expected to be ofconsiderable interest to flash smelters, particularly those with high-MgO feed.It is anticipated that ongoing optimisation will further improve themetallurgical performance of Enterprise concentrates. Other Components of the Bankable Feasibility Study Substantial progress has also been made in a number of additional key componentsof the BFS, as follows: • Mine Design: the improved resource estimate is being used to update theMine Design and Mining Schedule. This forms part of an assessment of the optimalsizing of the project, in view of the recent near-doubling of the Enterpriseresource. • Process Plant Design: tenders have been received for the engineeringdesign of a suitable processing plant and a contractor will be appointed in thecoming weeks. • Geotechnical Studies: core drilling is under way to provide largevolume samples for grindability and comminution testwork, and a consultant hasbeen appointed. • Hydrology: a hydrological consultant has been appointed and fieldworkhas commenced. In addition to the technical work, a number of other programs essential to thesuccess of the BFS have been initiated, as follows: • Project Development Agreement ('PDA'): a draft PDA has been preparedand submitted to the Mines and Minerals Development Department of the Governmentof Zambia for review. • Mining Lease Application: an application for a Large Scale MiningLicence has been prepared and is expected to be lodged before the end of thismonth. • Power Supply Agreement: a Memorandum of Understanding has been signedwith Zesco, the Zambian power utility, regarding the negotiation of an agreementfor the supply of electricity to the Munali Nickel Project. • Environmental Impact Assessment ('EIA'): the Terms of Reference andStudy Team for the Enterprise EIA have been approved by the EnvironmentalCouncil of Zambia. • Social Impact Study: this has been initiated by holding a series ofcommunity Consultation Meetings, and these will be continued in the comingmonths. Discussions with Nickel Smelting Companies Expressions of interest have been received from a number of nickel smeltingcompanies. Several of these groups have now completed site visits to theproject. Discussions are continuing with a number of companies to identify theconcentrate offtake arrangement that will be most beneficial to Albidon. Project Financing It is likely that development of the Enterprise deposit and any expansions oradditional deposits at Munali will be funded by a mixture of debt and equity.Expressions of interest have been received from a number of resource bankinggroups regarding provision of debt finance and other financial instruments todevelop the project. Representatives of a number of banks have completed sitevisits and additional field reviews are planned. Timetable for the Bankable Feasibility Study The second and final stage of the BFS has commenced and is scheduled forcompletion in the first half of 2006. It is intended that project financingdiscussions will continue in parallel with the other components of the BFS, andin the event of a successful outcome for the latter it is anticipated thatproject construction would commence in mid 2006, with first production of nickelconcentrate in mid 2007. Staffing Albidon is currently finalising a number of key appointments designed tostrengthen the management and Board of the Company as it works towards makingthe transition from exploration company to mining company. These appointmentswill be announced in the near future. If you have any queries please contact the Company Secretary, Nicholas Day on+61 8 9389 6300 or email [email protected]. Additional information may also be viewed on Albidon's website atwww.albidon.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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