31st Jul 2006 09:26
Albidon Limited31 July 2006 Level 1 62 Colin StAlbidon limited West Perth 6005 Western Australia ARBN 107 288 755 Tel:x+61.8.9221 4600 Fax:x +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 30 June 2006 HIGHLIGHTS Munali Nickel Project • Improved resource estimate completed for the Enterprise Deposit: 8Mt @ 1.4% Ni, 0.2% Cu, 0.07% Co and 0.9g/t PGM for a total of 109,000 tonnes of contained nickel and 222,000 ounces of PGM. • 87% of the Enterprise Resource is classified as Indicated under the JORC code. • High quality concentrate produced as a result of substantial improvements in both grade and recovery for all payable metals in metallurgical testwork. • Indicative concentrate specifications are approx 14% Ni, 2.4% Cu, 0.8% Co and 10g/t PGM, with recoveries of 80% Ni, 92.5% Cu, 72% Co, 60% Pt and 72% Pd. • Development Agreement signed with the Government of Zambia for the Munali Nickel Project, locking in key incentives over a five-year stability period. • Step-out drilling intersected significant mineralisation to the north of the Enterprise Deposit and further north again at Voyager indicating that additional increases in resources are likely. • Substantial progress has been made on the various components of the Bankable Feasibility Study ('BFS') for Enterprise which is scheduled for completion at the end of July, with results available in August. Munali District Exploration • An airborne electromagnetic survey completed over the Munali district has identified a number of targets and ground follow-up is underway. • Regional-scale geochemical stream sediment sampling programme has commenced with the aim of identifying new nickel targets along structures similar to the Munali Fault Zone. Joint Venture Activity • Drilling has confirmed and extended the high grade platinum-palladium mineralisation at Luwumbu in southwest Tanzania (JV partners Lonmin and Goldstream). • Reconnaissance percussion drill programme completed on the highest priority airborne electromagnetic targets at Selebi-Phikwe in northeast Botswana (programme operated by BHP Billiton). Several multi-element anomalies have been identified. • Drilling confirmed significant thicknesses of uranium mineralisation at the Njame North prospect in southern Zambia (operated by JV partner Energy Ventures Limited). Corporate • 14,100,000 new ordinary shares were issued to institutional investors to raise $13.4 million before expenses. The funds will be used to accelerate expansion drilling at Munali and commence pre-production activities. • 5,000,000 options were exercised during the period at USD$0.2 for proceeds of AUD$1.3 million. • The cash position at 30 June 2006 was AUD$12.2 million. Outlook • Completion of the Bankable Feasibility Study for the Munali Nickel Project. • Continued step-out drilling at Enterprise and Voyager aimed at expanding the resource base at Munali. • Commencement of pre-production site works at Munali. • Ongoing discussions will be held with potential offtake customers and banks. • Drill testing of any targets identified in the airborne electromagnetic survey along the Munali Fault and confirmed with geochemical soil sampling. • Regional stream sediment sampling will continue in the Munali region to define new target areas for follow-up. • Geological mapping and ground geophysics at Mpemba Hill in Malawi to define and prioritise targets for drill testing. • Detailed review of drilling results from the Selebi-Phikwe programme undertaken by BHP Billiton and planning of follow-up. • Drilling of Albidon's additional uranium prospects in southern Zambia by Energy Ventures Limited. 1. Munali Nickel-Copper-Cobalt-Platinum Project, Zambia Albidon Limited 100% Munali Feasibility Study (Enterprise Deposit) Resource Upgrade A new resource has been estimated on the basis of the infill and extensionaldrilling completed since the previous resource estimate in December 2005. Thecurrent estimate for Indicated and Inferred Resources is 8Mt @ 1.4% Ni, 0.2% Cu,0.07% Co, 0.3g/t Pt and 0.6 g/t Pd for a total of 109,000 tonnes of containednickel and 222,000 ounces of PGM. The infill drilling has been successful in converting 87% of the resource intothe Indicated category. In addition there was also a 10% increase in the amountof contained nickel in the overall resource. The Indicated Resource at Enterprise is now 6.9Mt @ 1.4% Ni. A cut-off grade of0.7% Ni has been used for all resource calculations. This resource will form the basis of the Mining Reserve that will be used tounderpin the Munali BFS. Metallurgy Improvements Bulk flotation testwork has led to substantial improvements in both grade andrecovery for all payable metals in concentrates produced from Enterprisemineralisation. Indicative concentrate specifications are: 14% Ni, 2.4% Cu,0.8% Co, 8g/t Pd, 2g/t Pt with respective recoveries of 80%, 92.5%, 72%, 72% and60%. These results are exceptional and demonstrate that a commercially attractiveconcentrate can be produced by straightforward sulphide flotation in aconventional processing plant. Process plant design and revenue models for theBFS will be based on the results listed above. It is notable that Munali concentrates have a high ratio of iron (Fe) tomagnesium oxide (MgO) of greater than 15. This makes the concentrate attractiveto operators of flash furnace-type smelters, particularly those whose feed isdominated by high-MgO concentrates. The ongoing metallurgical programme will include variability testwork andfurther optimisation of flotation parameters. Development Agreement with the Zambian Government Albidon and the Government of the Republic of Zambia ('GRZ') have signed aDevelopment Agreement ('DA') for the Munali Nickel Project. The DA defines thefiscal and regulatory framework for the project and locks in key incentives overa five year stability period. Signing of the Development Agreement achieves an important milestone in the BFSand satisfies a key condition required for debt financing of the project. The DA applies to the Enterprise Deposit and any other nickel projects developedwithin the 813 square kilometre Munali Mining Licence. Other BFS Activities Substantial progress was made during the quarter in the following areas: • Engineering and design of concentrator and associated infrastructure. • Geotechnical studies. • Power supply. • Environmental impact studies. • Social impact studies. • Discussions with potential customers regarding offtake of nickel concentrate. • Review of project finance options with a number of banks. The BFS is scheduled for completion at the end of July with results to beannounced in August. Voyager Prospect and Munali Intrusion Drill Programme Ongoing drilling has been successful in intersecting additional mineralisationdown dip at the Voyager prospect, as well as in the zone between Enterprise andVoyager, and to the north of Voyager. The drill intersections have been reported previously and are all relativelynear-surface (within 120m). The objective of this drill programme is to assesswhether Voyager and the adjacent prospects comprise portions of resources thatcould be developed within a relatively short time frame. Mineralisation to the north of Voyager exhibits relatively high contents of PGMsin comparison with the Enterprise area. The significance of this metal patternis still being evaluated. Munali District Exploration District-scale exploration commenced during the quarter with a helicopter-borneelectromagnetic survey over a 55-km long segment of the Munali Fault Zone. Thisstructure is believed to control the distribution of nickel in the region. The survey identified a number of conductive anomalies and a programme of fieldchecking has confirmed several high priority targets for soil geochemicalsampling follow-up. Results are expected in the next quarter. A regional-scale stream sediment geochemical sampling survey also commencedduring the quarter. This is designed to identify additional targets along majorfault structures to the south of and parallel to the Munali Fault Zone.Sampling has now been completed in the first of four major survey areas, thesouthern extension of the Munali Fault corridor. Assay results are expected inthe next quarter. 2. Uranium Exploration Agreement, Zambia Albidon Limited 100%, currently funded and operated by Energy Ventures Limitedunder the Exploration Agreement Energy Ventures Limited completed an initial drill programme designed to confirmthe status of a number of uranium prospects on Albidon's tenements in southernZambia. Reconnaissance aircore drilling was completed at the Njame North, NjameSouth and Munyumbwe 'A' prospects in the Kariba Valley. Infill aircore drillingwas also completed at Njame North. Assay results for the reconnaissance drilling at Njame North and Njame Southhave confirmed the presence of extensive, near-surface uranium mineralisation.Significant results are listed in the table below: Njame North:NJN015: 10m @ 1320ppm U3O8 from 34m, inc. 1m @ 3170 ppm U3O8 from 35m and 2m @ 2638 ppm U3O8 from 40mNJN007: 3m @ 1026 ppm U3O8 from 30mNJN013: 2m @ 1106 ppm U3O8 from 34mNJN011: 2m @ 708 ppm U3O8 from 17mNJN023: 8m @ 322 ppm U3O8 from 44mNJN025: 9m @ 318 ppm U3O8 from 4m Njame South:NJS013: 1m @ 696 ppm U3O8 from 25mNJS010: 1m @ 515 ppm U3O8 from 23mNJS024: 3m @ 473 ppm U3O8 from 19m These results confirm the prospectivity of the Kariba Valley for sandstonehosted uranium mineralisation. The mineralisation at Njame North is open alongstrike and down dip. Assay results for the infill drilling at this prospectwill be available in the next quarter. Drilling will commence at the Chisebuka Prospect in the Kariba Valley nextquarter. 3. Luwumbu Platinum Joint Venture Goldstream Mining NL 90%, Albidon Limited 10% with Lonmin currently earning 70% During the quarter Goldstream announced further drill results from the recenthigh grade PGM discovery located 1.5km to the east of the Nkenja PGMmineralisation identified last year. Seven new drillholes were completed, with four intersecting mineralisationvisually similar to that observed in the discovery drillhole, NDH014 (16.14m @5.36g/t Pt+Pd+Au ('2PGE+Au') including 1.67m@ 26.82g/t 2PGE+Au). Of the sevenholes drilled, only partial assay results for hole NDH018 were available thisquarter. This drillhole, sited approximately 50m up-dip from NDH014, returned17.1m @ 2.34 g/t Pt+Pd+Au (2PGE+Au). Assay results for all drill samples areexpected in the next quarter. 4. Songea Nickel-Platinum Project, Tanzania Albidon Limited 100%, currently funded and operated by BHP Billiton under theExploration Co-operation Agreement In late 2005, broad zones of nickel and copper anomalies were identified instream sediment samples and elevated platinum and palladium levels were found insoil geochemical samples. During the quarter, geological evaluation of thesebroad anomalies was undertaken by a joint BHP Billiton - Albidon Limited fieldteam with the objective of prioritising targets for follow-up. The forwardprogramme for Songea will be determined on receipt of assay results for rocksamples collected during the field programme. 5. Selebi-Phikwe and Tati Nickel-Platinum Projects, Botswana Selebi-Phikwe Project Albidon Limited 100%, currently funded and operated by BHP Billiton under theExploration Cooperation Agreement (originally operated by WMC) In the previous quarter, soil geochemical sampling and ground geophysicalsurveys led to the confirmation of a number of airborne electromagneticanomalies as priority drill targets in prospective geological settings atSelebi-Phikwe in northeast Botswana. A program of 13 reverse circulation drill holes for a total of 2,282m wasundertaken to provide reconnaissance testing of these targets. Preliminaryreview of available drill assays has identified several zones of multi-elementanomalism, with further work required to determine the significance of theseresults. Tati Project Joint Venture with Gallery Gold Limited (now Iamgold) Albidon has exercised the option to enter farm-in agreements in respect ofproject areas within the Tati Regional tenements. During the quarter,geological reconnaissance was conducted on all farm-in properties and focussedexploration programmes were implemented for Borolong and Mooke. At Borolong, a programme of geochemical stream sediment sampling was completedto evaluate a series of mafic and ultramafic intrusive rocks. Assay results areexpected next quarter. At Mooke, the reconnaissance geological evaluation indicated the presence ofultramafic rocks that had not been adequately sampled by previous explorers. Asmall programme to evaluate this area with geochemical soil sampling will beconducted in the next quarter. 6. Zimba Nickel-Copper-Platinum Project, Zambia Albidon Limited 100%, currently funded and operated by BHP Billiton under theExploration Co-operation Agreement Evaluation of geochemical and aeromagnetic data last quarter led to therecognition of a target at the Zimba Project, approximately 200km to the southwest of Munali. This target comprises a 15-km long aeromagnetic anomaly locatedalong a major fault structure, concealed beneath a thin veneer of coversediments. The target was evaluated with a helicopter-borne electromagneticsurvey during the quarter. The results indicate that suitable targets are notpresent at explorable depths. 7. Malawi Nickel-Platinum Projects Mpemba Project Albidon Limited 100% A focused geological and geophysical exploration programme to assess a number ofuntested targets at the Mpemba Hill Project was refined to utilise ahigh-resolution induced polarisation geophysical technique. This will be usedto assess targets for disseminated and massive nickel sulphide mineralisation.The programme will commence in the next quarter, with any priority targets to bedrilled later in the year. 1. Nefza Zinc-Lead and Copper-Gold Project, Tunisia Albidon Limited 100% Albidon's Nefza tenement covers an area of 4,160 sq km that contains numerouszinc-lead and gold-copper prospects. Work during the quarter included ongoing evaluation of the zinc-lead targets,including a number of abandoned zinc mines, some with significant remainingmineralisation. The style of zinc-lead mineralisation at Bou Aouane is repeatedat many localities throughout the Nefza area and shows similarities to the largeJinding deposit in China. The Company's intention is to accelerate the pace of the Nefza zinc and goldprogrammes and is reviewing a number of options for achieving this, including apossible farm-out or spin-out of the Tunisia projects. A number of proposalswere received from zinc mining groups during the quarter and these are presentlybeing evaluated. 2. Trozza Zinc Project, Tunisia Albidon Limited 100%, subject to a royalty The Trozza Permit is in the process of being transferred to Albidon from BHPBilliton. The Permit has been renewed for a further 3 years. No work was conducted during the period, pending completion of transfer of thetenement. It is intended that this project will be included in any farm-out orother arrangement covering the Nefza project. 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 and Frazer Tabeart, who are members of The AustralasianInstitute of Mining and Metallurgy and the Australian Insitute of Geoscientistsrespectively, and act as consultants to the Company. Mike Dunbar and FrazerTabeart have sufficient experience, which is relevant to the style ofmineralisation and type of deposit under consideration and to the activity whichhe is undertaking, to qualify as a Competent Person under the 2004 Edition ofthe Australasian Code for reporting of Exploration Results, Mineral Resourcesand Ore Reserves. Mike Dunbar and Frazer Tabeart consent to the inclusion of thedata in the form and context in which it appears. If you have any queries please contact the Company Secretary, 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 2006 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 (870) (1,297) (b) development 0 0 (c) production 0 0 (d) exploration and evaluation (3,913) (6,813)1.3 Dividends received 0 01.4 Interest and other items of a similar nature received 73 1651.5 Interest and other costs of finance paid 0 01.6 Income taxes paid 0 01.7 Other (provide details if material) 0 0 Net Operating Cash Flows (4,710) (7,945) Cash flows related to investing activities1.8 Payment for purchases of: (a) prospects 0 0 (b) equity investments 0 0 (c) other fixed assets (27) (136) 1.9 Proceeds from sale of: (a) prospects 0 0 (b) equity investments 0 0 (c) other fixed assets 0 0 1.10 Loans to other entities 0 (40)1.11 Loans repaid by other entities 183 2521.12 Recognition of Security Deposits as Cash (140) (140) Net investing cash flows 16 (64) 1.13 Total operating and investing cash flows (carried (4,694) (8,009) forward) 1.13 Total operating and investing cash flows (carried (4,694) (8,009) forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 9,712 9,7121.15 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 (47) (47) Net financing cash flows 9,665 9,665 Net increase (decrease) in cash held 4,970 1,656 1.20 Cash at beginning of quarter/year to date 7,448 10,5981.21 Exchange rate adjustments to item 1.20 (190) (26)1.22 Cash at end of quarter 12,228 12,228 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'0001.23 Aggregate amount of payments to the parties included in item 1.2 1,6691.24 Aggregate amount of loans to the parties included in item 1.10 613 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 $126,460.68. Administrative and technical 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 $243,840.02. Executive services and reimbursements of bona fide expenses provided by Hartree Pty Ltd, a company in which Mr A Cooke is a director, for the period aggregated $13,600.70. 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 $58,098.74. During the quarter Mr Brian Rudd (acting for the Capital Drilling Group) repaid $AUD182,539.45 of a loan for the purchase of a Schramm 685 drilling rig. The aggregate total loan outstanding as of 30/06/06 is $AUD613,140.11. The rig is owned and operated by Brian Rudd and held under trust by Albidon Zambia Limited. Rudd and Capital Drilling 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% pa. Until the loan is repaid, Albidon will deduct against the loan 28% of the amounts invoiced by Rudd for rig use. Mr C Burton has a 25% equity interest in the Capital Drilling Group 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 03.2 Credit standby arrangements 0 0 Estimated cash outflows for next quarter $AUD'0004.1 Exploration and evaluation 5,9834.2 Development - Total 5,983 Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in Current quarter Previous quarterthe consolidated statement of cash flows) to the related itemsin the accounts is as follows. $AUD'000 $AUD'0005.1 Cash on hand and at bank 12,228 7,4485.2 Deposits at call 0 05.3 Bank overdraft 0 05.4 Term deposits 0 0 Total: cash at end of quarter (item 1.22) 12,228 7,448 Changes in interests in mining tenements Tenement reference Nature of interest Interest at Interest at end beginning of of quarter (note (2) quarter6.1 Interests in mining tenements relinquished, reduced or lapsed6.2 Interests in mining LML.54 (Zambia) 100% Subsidiary 0% 100% 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 3) security (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 securities 108,518,000 108,518,000 7.4 Changes during quarter 24,100,000 24,100,000 (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 (description and 5,300,000 Number Exercise Expiry conversion factor) 2.6m AUD 0.60 30/06/07 0.3m AUD 0.60 30/04/08 0.8m AUD 0.60 30/06/08 0.4m AUD 0.75 30/06/08 1.2m AUD 0.75 1/12/087.8 Issued during quarter 1,200,000 Number Exercise Expiry 1.2m AUD 0.75 1/12/087.9 Exercised during quarter 5,000,000 Number Exercise Expiry 5.0m USD 0.20 30/06/067.10 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 Day Date: 31/07/2006 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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