30th Apr 2008 09:42
Albidon Limited30 April 2008 ALBIDON LIMITED Level 1 62 Colin St West Perth 6005 Western Australia ARBN 107 288 755 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 March 2008 HIGHLIGHTS: • The main ore zone at the Munali Nickel Project was intersectedin 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 early May 2008. • In January, as part of the funding arrangements negotiated inDecember 2007, the Company received a second instalment of US$5 million tocomplete the $10 million share placement to ZCCM Investments Holdings plc. • Mr. Richard Potts announced in February that he intends to stepdown as Chairman at the AGM in May 2008 after four years of service with theCompany. The Company is pleased to announce the appointment of Mr. John Shaw asDeputy Chairman of Albidon Limited. • In February, as part of the funding arrangements announced inDecember 2007, the Company forward hedged 2,274 tonnes of nickel in addition toits original 9,020 tonnes hedged in April 2007. • In February, as part of the funding arrangements negotiated inDecember 2007, the Company completed the final issue of 5,084,746 shares atAU$3.35/US$2.95 cents each to the Jinchuan Group to raise US$15 million. • On 8th April the Board approved an upgrade to the Munaliconcentrator to increase nickel production from the project by 20% toapproximately 10,500tpa, at an estimated capital cost of US$2.5 million. • Massive, semi-massive and disseminated nickel-copper sulphideshave been intersected at the Sunnyside nickel project south of Selbei-Phikwe inBotswana. • A 4,300 line-kilometre regional airborne EM survey has beencompleted over major structures aimed at defining additional nickel prospects inthe Sunnyside region. Joint Venture Highlights Chirundu and Kariba Valley Uranium Projects, Zambia (African Energy Resources) • Pre-Feasibility Studies on the Njame and Gwabe deposits in theChirundu JV have been completed. Songea Nickel Project, Tanzania (BHP Billiton) • High priority nickel geochemical and EM conductor targets havebeen confirmed at Mbinga and Liparamba. Nickel sulphide mineralisation has beenidentified in outcrop, and JV partner BHP Billiton is undertaking a follow upprogramme of detailed soil geochemical sampling to prioritise drill targets. Nefza Zinc Project, Tunisia (Zinifex) • Drilling commenced to test geochemical targets on the SidiDriss prospect at Nefza. Maitengwe Nickel Project (IAMGOLD) • In April 2008 Albidon signed a Joint Venture Agreement withIAMGOLD under which the Company may earn up to 80% interest in nickelexploration projects at Maitengwe in eastern Botswana, thereby expandingAlbidon's nickel tenements following our recent discovery at Sunnyside. Corporate • The cash position at 31 March 2008 was US$19.2 million. • 100,000 unlisted incentive options were issued during thequarter as follows: Number of Options Exercise Price Exercisable on or Before 100,000 A$3.25 01/02/2011 • 102,000 options were exercised during the quarter. Outlook • First ore expected to be delivered to the Munali mill in earlyMay 2008. • Work will immediately commence on the recently announcedconcentrator expansion at Munali, to take advantage of the constructionpersonnel already on site. • Completion of initial project commissioning, includingconstruction of plant and support systems such as power supply, water supply,office and accommodation buildings. • Continuing progress on the implementation of safety systems atMunali, along with continued roll out of ISO 9000, 1400 and 08 SAS 1801Standards. • Drilling will be continued at the Sunnyside Nickel prospect inBotswana, and assay results will be reported as they become available. • Drilling has commenced at the Kgwedi Ni target to the west ofSunnyside in Botswana. • Detailed soil geochemical sampling will be undertaken toprioritise targets at the Songea nickel prospects in Tanzania, with drillingexpected in mid-year. • African Energy Resources have completed a Pre-Feasibility Studyon the Gwabe and Njame uranium resources in the Chirundu JV, Zambia. Furtherdetails on the key results from the Pre-Feasibility Study and a summary of theBankable Feasibility Study will be released in due course. 1. Munali Nickel Project, Zambia Albidon Limited 100% Project Implementation Activities on Site at Munali • The orebody intersection at the first level was made at the endof January 2008 - two months earlier than budgeted. Total development ore at theRom pad as at 31st March 2008 was 23,380 tonnes. • The total decline and lateral development meters advancedduring the quarter amounted to 1,054m compared to the budget of 908m. • Safety performance remained on a positive trend indicatinganother 44% improvement over the 1st quarter of 2008. No LTI's were reportedduring this period. • Mining production is progressing to plan with results exceedingbudget by 7%. Sustaining this trend would allow stoping production to ramp upfaster than budgeted. The inclusion of hanging wall stripping on 1040 level inthe stope plan also allows production flexibility in support of the recentlyapproved expansion of production infrastucture. • Establishment of ventilation shafts is progressing to plan, asis the underground infrastructure, which is currently adequate to support thehigher production rate. • The process plant construction is progressing to plan, withinstallation of the temporary laboratory, change houses and offices completedwhile awaiting the permanent installation. • All recruitment is nearing completion and all criticalpositions have been filled. The project technical training is progressing welland will be completed by project start up. • The Relocation Action Plan is progressing on budget and as perthe construction schedule. The contractors on site were replaced by skilledlocal community, in support of Albidon's local employment policy. Munali District Exploration • Compilation of the regional stream sediment targets and soilsampling results in the Chikani area, 25km south of Munali was completed and theresults are being evaluated. A follow-up soil sampling programme for theSimwambwa area has been initiated. 2. Uranium Exploration, Zambia Albidon Limited 100%, diluting to 30%, currently funded and operated by AfricanEnergy Resources Limited under an Exploration Agreement • Pre-Feasibility studies on Njame and Gwabe deposits in theChirundu joint venture have been completed. • The Pre-Feasibility Study has confirmed that commerciallyviable mining of uranium from the Chirundu Project is possible under projecteduranium price, capital cost and operating cost scenarios. • African Energy has resolved to commit to a Bankable FeasibilityStudy to further evaluate the Chirundu Uranium JV Project for its futurefinancing. A detailed scope and budget for the BFS is currently in preparation. • Assay results have been received for all remaining resourcedelineation drilling at the Njame Deposit. Njame contains Inferred Resources of8.8Mt @ 340 ppm U3O8 for 6.6 Mlb U3O8 at a 100ppm lower cut-off grade. The totalInferred Resource for Njame and Gwabe is currently 4,120 tonnes of U3O8 (9.1Mlbof U3O8). • Highly anomalous uranium assays of up to 1,150ppm U3O8 wereidentified in several target areas at the Namakande Prospect. Widely-spaced RCdrilling at Chisebuka confirmed near surface mineralisation likely to beamenable to open pit extraction. 3. Songea Nickel Project, Tanzania Albidon Limited 100%, diluting to 30%, currently funded and operated by BHPBilliton under the Africa Exploration Co-operation Agreement • The airborne geophysical survey flown towards the end of lastyear identified a number of high priority targets, several of which coincidewith Ni-Cu geochemical anomalies. • Nickel sulphide mineralisation has been identified in outcropsamples in a geological setting similar to the host rocks at the large Voisey'sBay nickel mine operated by Vale Inco in eastern Canada. JV partner BHP Billiton is undertaking a follow up programme of detailed soilgeochemical sampling to generate a priority ranking of the EM targets with theintention of drilling in mid-year. 4. Nickel Projects in Botswana Selebi-Phikwe Nickel-Copper Project Albidon Limited 100% • Drilling has confirmed the discovery of massive sulphide nickelmineralisation at the Sunnyside prospect south of Selebi-Phikwe in Botswana.Fifteen drillholes out of a 21-hole programme have been completed, with assayspending for most drillholes. Results received to date grade up to 1.3% Ni. • A regional airborne EM geophysical survey covering 4,300 linekm over major fault structures has been completed with the aim of identifyingadditional nickel prospects in the Sunnyside district. Preliminary results willbe available by the end of May 2008. • Ground EM and IP geophysical surveys were completed at theLipadi nickel prospect between Sunnyside and Selebi-Phikwe to the north. Resultsare awaited. • The first of four drillholes at the Kgwedi nickel target westof Sunnyside have commenced. 5. Malawi Nickel-Platinum Projects Mpemba Project Albidon Limited 100% diluting to 25%, currently funded and operated by MM Miningplc • Field work is due to commence in May following the rainyseason. 6. Luwumbu Platinum Project IMX Resources NL 90%, Albidon Limited 10% • The previous project operator Lonmin advised of its withdrawalfrom the JV, without earning an interest in the Luwumbu tenements. IMX andAlbidon are currently reviewing the previous work by Lonmin in preparation forthe 2008 field season on a more nickel-focused program as compared to thehistorical platinum and palladium focus of Lonmin. 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 • A program of 3,000 metres of diamond drilling within the 3,140square kilometres Nefza licence is planned for 2008 to test the Sidi Driss,Gantra, and El Haouaria prospects. • A new drill contractor was brought to the project in March anddrilling has commenced at the Sidi Driss zinc prospect. 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 both 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. Mr.Dunbar 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 March 2008 Consolidated statement of cash flows Cash flows related to operating activities Current quarter Year to date US$'000s US$'000s1.1 Receipts from product sales and related debtors1.2 Payments for: (a) administration (1,817) (1,817) (b) development (9,264) (9,264) (c) production (d) exploration and evaluation (429) (429)1.3 Dividends received1.4 Interest and other items of a similar nature 143 143 received1.5 Interest and other costs of finance paid (1,269) (1,269)1.6 Income taxes paid1.7 Other (provide details if material) Net Operating Cash Flows (12,636) (12,636) Cash flows related to investing activities1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets (11,997) (11,997)1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets1.10 Loans to other entities1.11 Loans repaid by other entities1.12 Recognition of Security Deposits as Cash Net investing cash flows (11,997) (11,997)1.13 Total operating and investing cash flows (carried forward) (24,633) (24,633) 1.13 Total operating and investing cash flows (carried forward) (24,633) (24,633) Cash flows related to financing activities1.14 Proceeds from issues of shares, options, etc. 20,054 20,0541.15 Proceeds from sale of forfeited shares1.16 Proceeds from borrowings 8,000 8,0001.17 Repayment of borrowings1.18 Dividends paid1.19 Cost of share issue (34) (34) Net financing cash flows 28,020 28,020 Net increase (decrease) in cash held 3,387 3,387 1.20 Cash at beginning of quarter/year to date 16,614 16,6141.21 Exchange rate adjustments to item 1.20 (805) (805)1.22 Cash at end of quarter 19,196 19,196 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities Current quarter US$'000s1.23 Aggregate amount of payments to the parties included in item 1.2 3431.24 Aggregate amount of loans to the parties included in item 1.101.25 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$205,508. Administrative and technical services provided by Mitchell River Group Pty Ltd, a company in which Mr. A Cooke is a director, for the period aggregated US$132,139. Executive services provided by Hartree Pty Ltd, a company in which Mr. A Cooke is a director, for the period aggregated US$4,972. Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest Nil Financing facilities available Amount available Amount used US$'000s US$'000s3.1 Loan facilities 100,000 44,0003.2 Credit standby arrangements Estimated cash outflows for next quarter US$'000s4.1 Exploration and evaluation 1,4504.2 Development 22,900 Total 24,350 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 4,331 3,1635.2 Deposits at call 14,160 12,7515.3 Bank overdraft5.4 Term deposits 705 700 Total: cash at end of quarter (item 1.22) 19,196 16,614 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 Number quoted Issue price per Amount paid up per security (see note security (see note 3) 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 securities 164,642,649 164,642,469 7.4 Changes during quarter (a) Increases through issues 102,000 102,000 A$0.60 A$0.60 3,389,831 3,389,831 A$3.35 A$3.35 (b) Decreases through 5,084,746 5,084,746 A$3.35 A$0.75 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 (description and 7,001,100 Number Exercise Expiry conversion factor) 56,100 A$0.60 30/06/08 150,000 A$0.75 30/06/08 1,200,000 A$0.75 01/12/08 500,000 A$1.05 30/06/09 295,000 A$3.22 01/11/09 150,000 A$1.70 01/12/09 1,200,000 A$2.10 27/02/10 750,000 A$2.60 20/05/10 200,000 A$2.80 12/07/10 300,000 A$2.97 27/07/10 250,000 A$3.14 27/07/10 600,000 A$2.23 01/09/10 350,000 A$2.88 31/12/10 100,000 A$2.97 31/12/10 400,000 A$2.81 01/02/11 100,000 A$3.25 01/02/11 400,000 A$3.22 01/12/11 7.8 Issued during quarter 102,000 Exercisable at A$3.25 expire 01/02/20117.9 Exercised during quarter 102,000 Exercised at A$0.60 each7.10 Expired during quarter7.11 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 DayDate: 30/4/2008 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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