27th Jan 2006 09:38
Albidon Limited27 January 2006 SUITE 1 HILLWAY HOUSE 141 BROADWAY NEDLANDS 6009 WESTERN AUSTRALIA ARBN 107 288 755ALBIDON LIMITED 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 31 DECEMBER 2005 Highlights Focused Exploration • The infill drilling programme was completed at the Enterprise Deposit, part of the Munali Nickel Project in Zambia. • Based on that drill programme the resource was re-estimated, resulting in a 75% increase in the total contained nickel. The updated Indicated and Inferred Resource is now 6.93Mt at 1.4% Ni and 1.0g/t PGM, for 97,000 tonnes of contained nickel and 223,000 ounces of PGMs (platinum group metals). • The Indicated portion of the resource is 4.5Mt at 1.4% Ni, for 63,000 tonnes of contained nickel metal (the previous resource has been fully converted from the Inferrred to the Indicated category). • Metallurgical testwork on Enterprise mineralization has generated high quality Ni-Co-Cu-PGM concentrates at attractive nickel recoveries. • A decision was made to proceed with completion of the second stage of the Bankable Feasibility Study for development of the Enterprise deposit. • Extensional drilling to further increase the resource has commenced, with the first drillholes to the south intersecting significant mineralisation. Drilling will recommence in the first quarter of 2006. • A geological mapping and sampling programme at the Chikani Prospect, 20km along-strike from Munali, has confirmed the presence of similar mafic to ultramafic intrusive rocks. Joint Venture Activity • Drilling resulted in the discovery of high grade platinum-palladium mineralisation 1.5km east of the known Nkenja PGM prospect at Luwumbu in southwest Tanzania (program carried out by JV partners Lonmin and Goldstream). • At Selebi-Phikwe in Botswana a number of conductor targets were identified in an extensive airborne electromagnetic (AEM) survey undertaken by JV partner BHP Billiton. • Geochemical sampling and limited geological mapping were completed over the Selebi-Phikwe airborne AEM conductors, and ground EM surveying has commenced over the highest priority targets. • A large-scale stream sediment geochemical survey led to the identification of broad anomalous zones of Ni and Cu at the Songea project in southwest Tanzania. • Energy Ventures Limited commenced a programme to explore Albidon's uranium and coal prospects in Zambia. Corporate • A$13 million was raised in October 2005 through a placement of shares to institutional investors in UK, Canada and Australia for the purpose of accelerating the development and exploration programs at Munali and elsewhere. • Issued 300,000 unlisted options (exercisable at AUD$0.60 on or before 30 April 2008). • Issued 400,000 unlisted options (exercisable at AUD$0.75 on or before 30 June 2008). • Cash position at 31 December 2005 was A$10.6 million. Outlook • Extensional drilling at Enterprise will recommence in the first quarter. • Exploration drilling at the Voyager prospect will continue. • Metallurgical testwork will continue, including an assessment of variability throughout the deposit. • Design of the proposed processing plant and associated infrastructure will commence in the first quarter of 2006, with JR Roche being appointed as the project engineers. • Interpretation and follow-up of the results of the ground electromagnetic surveys will be completed at Selebi-Phikwe with the aim of defining drill targets. • Follow-up programmes will be undertaken to evaluate the significance of the broad nickel and copper anomalies identified in stream sediments at Songea. • Assay results are expected for three drill holes from the Nkenja Platinum Prospect at Luwumbu. • Continued exploration operations on Albidon's uranium prospects by Energy Ventures Limited. 1. Munali Nickel-Copper-Cobalt-Platinum Project, Zambia Albidon Limited 100% Munali (Enterprise Deposit) Feasibility Study Drilling The resource infill drilling programme at Enterprise was completed during thequarter and the results from this were used to update the resource estimate.The current estimate (Indicated and Inferred) is 6.93Mt @ 1.4% Ni and 1.0g/tPGM, this includes an Indicated Resource of 4.5Mt @ 1.4% Ni and 1.0 g/t PGMs (aspreviously reported). On completion of the infill drill programme an extensional drilling campaigncommenced towards the end of the quarter. This had immediate success with 5 ofthe first 7 holes intersecting significant mineralization (assays previouslyreported). Drilling will recommence as soon as possible in the next quarter, following thewet season, to continue the extensional programme to 'step-out' along thedeposit, which remains open to the north and down dip. Metallurgy Twenty six sulphide flotation tests have now been completed under a range oflaboratory conditions. Results indicate that a high quality concentrate can beproduced using conventional flotation. The tests have shown that a concentratewith 12% Ni, 0.7% Co, 1.5% Cu and 8.6g/t combined Pd and Pt can be produced withnickel recovery of over 75%. The high Fe/MgO ratio (>7.5) makes the concentrate amenable to smelting throughconventional smelters. Bankable Feasibility Study Based on the improved resource estimate and the positive metallurgical results,it was decided to proceed with the second (final) stage of the BankableFeasibility Study (BFS) for the development of the Enterprise deposit. The BFSis scheduled for completion in mid-2006. Voyager Prospect and Exploration Activities Drilling continued during the quarter at the recently discovered Voyagerprospect located some 800m to the north of the Enterprise deposit. A further 12drillholes were completed during the quarter, results have been received for 5of these holes (results published previously). Late in the quarter an aggressive exploration programme commenced to defineadditional shallow (near-surface) mineralization within the Munali Intrusion. Atotal of 12 holes were drilled, results are pending. Drilling will recommence in January with the objective of outlining the overallextent of nickel mineralisation within the Munali Intrusion. Regional exploration recommenced on the Munali Project tenements during thequarter. A programme of detailed geological mapping was completed at theChikani Prospect, approximately 20km from Munali along the southernstrike-continuation of the Munali Fault structure. Mapping confirmed the presence of mafic and ultramafic rocks similar to theMunali Intrusion. A programme of soil sampling was completed along 11km ofstrike, with almost 900 soil samples and over 40 rock-chip samples collected.Assay results are expected next quarter. 2. 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) Airborne electromagnetic (AEM) surveys over two extensive areas to the southwestand southeast of Selebi-Phikwe resulted in the identification of a number ofconductor targets in prospective geological settings. Soil geochemical samplingwas completed over all priority airborne AEM targets. Over 2,900 samples werecollected and assay results were used to rank the targets. Geological mapping and field validation were completed on the highest ranked AEMtargets, and follow-up ground electromagnetic surveys were initiated on the highpriority targets. These priority targets comprise AEM conductors coincidentwith surface geochemical anomalism and hence are attractive prospects given thatthey are located within 50km of Africa's largest Ni-Cu mines at Selebi-Phikwe. The ground EM surveys will be completed next quarter. Drill targets will bedefined on the basis of the soil sampling results and the ground electromagneticsurvey data, with drilling also scheduled to commence next quarter. Tati Project Joint Venture with Gallery Gold Limited Assays were received for the reconnaissance drilling programme aimed at testinggeophysical targets in the Tekwane and Kismet prospect areas. Disseminated tomassive sulphides were encountered in a number of drillholes however these donot contain significant amounts of either base metals or precious metals. A programme to evaluate the potential of other targets in the Tati Project willbe designed in the next quarter. 3. Luwumbu Platinum Joint Venture Goldstream Mining NL 90%, Albidon Limited 10% with Lonmin currently earning 70% Goldstream announced a significant new high grade PGM discovery in a drillintersection 1.5km to the east of the established Nkenja PGM mineralisation. The new high grade zone of PGM mineralisation (drill hole NDH014) returned16.14m @ 5.36g/t Pt+Pd+Au 2PGE+Au) including 1.67m@ 26.82g/t 2PGE+Au. This wasone of eight drill holes completed to test a number of stratigraphic andgeochemical targets. Assay from three of the holes have not been received todate. This impressive result further demonstrates the potential of the Luwumbu projectand also validates Albidon's commitment to the Songea project area to the south. 4. Songea Nickel-Platinum Project, Tanzania Albidon Limited 100%, currently funded and operated by BHP Billiton under theExploration Co-operation Agreement An extensive stream sediment and soil geochemical sampling programme wascompleted over several tenements at Songea to assess the nickel and platinumpotential of areas containing prospective mafic intrusions that show evidencefor the development of magmatic nickel sulphides. Broad zones of nickel and copper anomalism were identified in the streamsediment samples and moderately elevated platinum and palladium levels werefound in soils. Results from these programmes have been used to guide theconversion of several Reconnaissance Licences to Prospecting Licences inreadiness for follow-up exploration programs in the coming months. 5. Malawi Nickel-Platinum Projects Mpemba Project Albidon Limited 100% Previously acquired geophysical survey data are being re-evaluated in light ofthe results of the reconnaissance drilling program that confirmed extensive butlow grade nickel-copper mineralisation at Mpemba. A decision on whether furtherdrilling is warranted will be made next quarter. 6. Nefza Copper-Gold and Zinc-Lead Project, Tunisia Albidon Limited 100% Albidon's Nefza Exploration Permit (EP) covers an area of 4,160 sq km betweenthe Atlas Mountains and the Mediterranean Sea, with advanced targets for Au-Cuand Zn-Pb mineralization. Evaluation of the many Zn-Pb targets within the permit was the main focus ofactivity during the quarter. These include a number of abandoned Zn-Pb mines,some with significant remaining mineralisation. Work completed included theassessment of old mining and exploration data and field evaluation of the maintargets. Highlights include the recognition of a near-surface mineralised zone at the BouAouane mine that had not been exploited at the termination of mining activities.This is termed the Khatkhadra zone which contains mineralisation with reportedgrades up to 5% Zn. The significance of this will be evaluated in the comingmonths. The style of Zn-Pb mineralisation at Bou Aouane is repeated at many localitiesthroughout the Nefza Permit and shows similarities to the large Jinding depositin Yunnan, China. The significance of this target type in North Africa has notpreviously been recognised and the extensive Nefza area is under-explored.Targets have also been identified at Nefza that occur in geological settingssimilar to Breakwater Resource's Bougrine zinc mine in northern Tunisia. In the next quarter, it is planned to complete the evaluation of the historicalZn-Pb mine production data, compile exploration data, plan drilling programs onunexploited mineralisation at the abandoned Zn-Pb mines, and finalise theplanning of geophysical surveys to define drill targets in the Au-Cu projectareas as well as the Zn-Pb prospects. 7. Trozza Zinc Project, Tunisia Joint Venture with BHP World Exploration Inc (BHP Billiton) 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 completed during the period, pending official confirmation of therenewal. Geophysical targeting and additional drilling are planned at the JebelTouila and Jebel Trozza prospects where zinc mineralization was confirmed inrecent drill programs. 8. Uranium Exploration Agreement, Zambia Exploration Agreement with Energy Ventures Limited Energy Ventures Limited commenced a work program on the Company's tenements thatfall within the Agreement. Access has been secured to an exploration databasecompiled by AGIP in the 1970's and early 1980's pertaining to uraniumexploration in the Kariba Valley of southern Zambia. Synthesis and analysis ofthis database is expected to lead to the identification of several uraniumtargets for drill testing in the next quarter. 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 Information in this report relating to exploration results is based on datacompiled by Mike Dunbar, who is a member of The Australasian Institute of Miningand Metallurgy and acts as a consultant to the Company. Mike Dunbar hassufficient experience, which is relevant to the style of mineralisation and typeof deposit under consideration and to the activity which he is undertaking, toqualify as a Competent Person under the 2004 Edition of the Australasian Codefor reporting of Exploration Results, Mineral Resources and Ore Reserves. MikeDunbar consents to the inclusion of the data in the form and context in which itappears. 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 31 December 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 (560) (1,558) (b) development (c) production (d) exploration and evaluation (3,250) (9,400)1.3 Dividends received 0 01.4 Interest and other items of a similar nature 90 262 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 (3,720) (10,696) 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 (48) (91)1.9 Proceeds from sale of: (a) prospects 0 0 (b) equity investments 0 0 (c) other fixed assets1.10 Loans to other entities 0 (1,153)1.11 Loans repaid by other entities 176 3721.12 Recognition of Security Deposits as Cash 0 0 Net investing cash flows 128 (872)1.13 Total operating and investing cash flows (3,592) (11,568) (carried forward) 1.13 Total operating and investing cash flows (3,592) (11,568) (carried forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 12,777 12,7771.15 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 (599) (671) Net financing cash flows 12,178 12,106 Net increase (decrease) in cash held 8,586 538 1.20 Cash at beginning of quarter/year to date 1,968 9,8831.21 Exchange rate adjustments to item 1.20 44 1771.22 Cash at end of quarter 10,598 10,598 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'000 785 1.23 Aggregate amount of payments to the parties included in item 1.2 7821.24 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 $138,708.60. 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 $89,018.45. 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 $12,647.67. Directors fees and 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 $23,412.09. Directors 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 $22,817.37. During the quarter Mr Brian Rudd repaid $AUD175,626.06 as part of the purchase of a Schramm 685 drilling rig. The aggregate total loan outstanding is $AUD781,522.15. 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 3,380 4.2 Development - Total 3,380 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 10,598 1,9685.2 Deposits at call 0 05.3 Bank overdraft 0 05.4 Term deposits 0 0 Total: cash at end of quarter (item 1.22) 10,598 1,968 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 PLR2766/05 (Tanzania) 100% subsidiary 100% 0% 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 Issue price per security Amount paid up per security number quoted (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 89,368,000 69,885,800 securities 7.4 Changes during quarter (a) 21,000,000 21,000,000 AUD0.62/GBP0.26 AUD0.62/GBP0.26 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 9,100,000 Number Exercise $ Expiry (description 5.0m USD 0.20 30/06/06 and 2.6m AUD 0.60 30/06/07 conversion 0.3m AUD 0.60 30/04/08 factor) 0.8m AUD 0.60 30/06/08 0.4m AUD 0.75 30/06/087.8 Issued during Number Exercise $ Expiry quarter 0.4m AUD$0.75 30/06/087.9 Exercised during quarter7.10 Expired Number Exercise $ Expiry during 0.2m AUD$0.60 30/06/07 quarter 0.2m AUD$0.60 30/06/087.11 Debentures (totals only)7.12 Unsecured notes (totals only) Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4). 2 This statement does give a true and fair view of the matters disclosed. Sign here: Company secretary Print name: Nicholas Day Date: 28/01/2006 Notes 1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged 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 in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. == == == == == This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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