31st Oct 2007 07:01
Albidon Limited31 October 2007 ALBIDON LTD 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 31 October 2007 Market release via electronic lodgement QUARTERLY ACTIVITIES REPORT For the period ended 30 September 2007 HIGHLIGHTS: Munali Nickel Project • The Company has satisfied all material conditions precedentrequired by Senior Lenders for initial drawdown under the facility agreement forthe Munali Nickel Project. • Byrnecut Mining International Limited has been engaged as themining contractor for Munali. • Infill drilling was continued at the Enterprise deposit toprovide detailed mine planning and metallurgical information for the first yearof mine production, results are pending. • The hydrological drilling programme was successfully completed,which demonstrated the existing bore field was capable of providing all watersupply needed for the project. • Construction of the concentrator continued with activitiesfocused on earthworks and the commencement of civils during the quarter. Munali District Exploration • Geochemical soil sampling programmes and geological mappinghave been completed over several structural targets in the Chikani Prospectarea, 25km south of Munali, results expected in the next quarter. Nickel Exploration in Southern Africa Selebi-Phikwe Project, Botswana • IP geophysics was completed at the Sunnyside prospect where astrong 2km-long IP conductor was identified coincident with Ni-Cu soilgeochemistry. Follow-up drilling is planned. • IP geophysics was also completed on the Kgwedi nickel targetand a 1km-long conductivity anomaly has been identified. Soil geochemistryresults are pending. Joint Venture Activity Chirundu and Kariba Valley Uranium Projects, Zambia (African Energy Resources) • A new discovery of sandstone type uranium mineralisation wasmade by drilling at the Gwabe prospect in Zambia. • Additional drilling has extended the uranium mineralisationpreviously reported at the Njame deposit. • Drilling commenced at the Chisebuka prospect in the KaribaValley JV to test the high grade uranium mineralisation previously reported fromsurface outcrops. • Formal JV documents were signed for Chirundu and Kariba Valleyjoint ventures. • African Energy has met its expenditure commitment to earn aninitial 30% equity in the Chirundu JV. • The Board of African Energy approved commencement of aPre-Feasibility Study to evaluate the viability of mining at Njame and Gwabe inthe Chirundu JV. Songea Nickel Project, Tanzania (BHP Billiton) • An airborne electromagnetic survey carried out by BHP Billitonhas identified a number of strong conductor responses associated with favorablegeology. Results are awaited from detailed data interpretation and follow upsampling. Nefza-Haffouz Zinc Project, Tunisia (Zinifex) • IP geophysical surveys were completed at Nefza and commenced atHaffouz (formerly Trozza) with the aim of defining drill targets. • Drilling is underway at Nefza, with seven drillholes completedto date. Assay results are pending. Corporate The cash position at 30 September 2007 was US$18 million. • 1,400,000 unlisted incentive options were issued during thequarter to employees as follows: Number of Options Exercise Price Exercisable on or Before 50,000 A$2.60 20/05/2010 250,000 A$3.14 12/07/2010 200,000 A$2.80 12/07/2010 300,000 A$2.97 12/07/2010 600,000 A$2.23 01/09/2010 Outlook • Establishment of safety systems to support the Munali Project. • Continued development of the underground decline to access orewith mechanized equipment. • Mining contractor fully mobilized and establishment of surfaceand underground infrastructure. • Continue sinking ventilation shafts in advance of the declinedevelopment. • Site preparation, earthworks and civils will continue tocompletion followed by focused construction of the process circuit, includingcrusher installation and commencement of steel erection. • GRD Minproc, the construction management contractor on site,will continue to engage and mobilize subcontractors to meet constructionschedule. • Ongoing recruitment of mining personnel and contractors remainsa priority. • Completion of the geochemical soil sampling programmes atChikani to evaluate the base metal potential. • Completion of the regional geochemical stream sediment surveyand soil sampling programmes in the region to the south of Munali. • Plan drilling programmes for the Sunnyside and Kgwedi nickelprospects in Botswana. • Continued drill testing of the Njame uranium deposit, Gwabemineralisation and Chisebuka target in Zambia. • Completion of ground follow-up assessment and interpretation ofthe airborne geophysical targets at Songea in Tanzania. • Ongoing drilling at the Nefza zinc project in Tunisia. Munali Nickel Project, Zambia Albidon Limited 100% Project Implementation Activities on Site at Munali • Systems, standards and policies are being implemented toestablish a safe and healthy operating environment in all areas of the project. • The underground mining activities are now fully converted tomechanical drilling and cleaning. This enables more rapid progress of thedecline. • The concentrator construction activities continued withearthworks nearing completion and civils commencing in the plant area to allowfor the steelwork construction phase to start on schedule. • The main contractors are established on site and resources arebecoming available in support of the mining operation and construction of theplant. • The procurement process is progressing to plan; all criticallong lead items, such as the crushers and ball mills, are expected to bedelivered on schedule. • To date construction costs have tracked budget closely,however, cost pressures, particularly associated with skilled constructionlabour are evident in Southern Africa. An infill drilling programme, within the early production levels of theEnterprise deposit, was completed during the quarter. Although results arestill pending, the drilling has intersected mineralisation consistent with thecurrent resource model. Results for this infill drilling programme are expectedduring the next quarter. This additional data will be included within the nextresource model. During the quarter a deep drilling programme commenced and tested the Munaliintrusion at depths of 700-750m. This is part of a 3-D modeling programme todetermine the geometry of the Munali Intrusion for drill targeting purposes. Additional drilling in the northwest portion of the intrusion has demonstratedthat the intrusion is plunging off to the northwest opening up potentialexploration targets at depth in that direction. In addition to the resource, exploration and metallurgical drilling programmes,a substantial water exploration programme has been completed during the quarter. This programme included drilling additional water bores, pump testing thebores and analysis of the long term extraction rates from the bores. Theanalysis has indicated that the 10 water bores drilled and tested to date willprovide an adequate long term water supply for the project. Byrnecut Mining International Limited has been engaged as the mining contractorfor Munali. Byrnecut commenced mobilization to Munali with the first mobilemining fleet arriving during the quarter. This enabled the change from handheld to mechanized development in the mine and a corresponding acceleration indevelopment rates. The Byrnecut tendered rates are approximately 8% higher thancosts forecast in the Bankable Feasibility Study for the Munali Project andreflect the current state of the market. Munali District Exploration Field assessment of the regional stream sediment targets and soil samplingresults in the Chikani area, 25km south of Munali commenced during the quarter.An additional 1,000 stream sediment and soil samples were collected and resultsare pending. 1. Uranium Exploration, Zambia Albidon Limited 100% diluting to 30%, currently funded and operated by AfricanEnergy Resources Limited under an Exploration Agreement Albidon's joint venture partner African Energy Resources ('AFR') carried out anumber of sampling and drilling programmes on the Chirundu and Kariba Valley JVprojects, as follows: • A new discovery of sandstone-type uranium mineralisation wasmade by drilling at the Gwabe prospect in the Chirundu JV. This is similar instyle to the Njame deposit which is located within approximately 20km. Aninitial mineral resource estimate will be prepared on receipt of all remainingassays from the drill programme; • Fieldwork at Njame included extensional drilling around theknown Njame North resource (4,288m RC/aircore) as well as initial drill testingbetween this deposit and the Njame South prospect. The drilling has beensuccessful in increasing the extent of the known uranium mineralisation and anupdated JORC resource estimate will be prepared for Njame in the next quarter; • High-grade surface uranium mineralisation was identifiedthrough a rock-chip sampling programme at Chisebuka Prospect (Kariba Valley JV),with a peak assay result of 4,823 ppm U3O8 in one sample. The mineralisation islocated in a similar geological environment to Njame and Gwabe and drilling hascommenced to test the surface indications at depth; • Based on the positive drill results, AFR has approved aPre-Feasibility Study ('PFS') to evaluate the commercial development of uraniummineralisation at the Njame deposit and Gwabe prospect. The PFS is scheduled forcompletion in the first quarter of 2008; and • The formal joint venture documentation has now been finalizedbetween Albidon and African Energy. AFR has earned a 30% interest in theChirundu JV and is now also funding the Kariba JV to earn an initial 30%interest. 2. Songea Nickel Project, Tanzania Albidon Limited 100% diluting to 30%, currently funded and operated by BHPBilliton under the Exploration Co-operation Agreement During the quarter BHP Billiton completed an airborne electromagnetic ('EM')survey over three target areas in the Songea JV tenements in southwest Tanzania. Preliminary analysis of the data has identified strong conductivity responsesalong the southern margin of the mafic intrusion at the Liparamba target.Results are pending from the detailed data interpretation as are assays fromsulphide samples collected from outcrop during follow up fieldwork. 3. Nickel Projects in Botswana Selebi-Phikwe Nickel-Copper Project Albidon Limited 100% IP geophysical surveying was completed at the Sunnyside nickel target, asulphide prospect located on the extensive Sunnyside Shear Zone in the southernpart of the Selebi-Phikwe tenement package. A strong 2km-long IP conductor wasidentified coincident with Ni-Cu soil geochemical anomalies. Follow-up drillingis planned. IP geophysics was also completed at the Kgwedi nickel target and a 1kmconductivity anomaly has been identified. Soil geochemical sampling was alsocompleted at Kgwedi and results are pending. A geochemical soil sampling programme has been completed over five additionalnickel targets in the Selebi-Phikwe Project. Ground geophysics is scheduled forthe next quarter at the Lipadi nickel prospect in the eastern part of thetenement package. 4. Malawi Nickel-Platinum Projects Mpemba Project Albidon Limited 100% Following a detailed project review it was decided to farm-out the Mpemba Hillnickel project in Malawi. A joint venture agreement was signed with MM Miningplc ('MM') whereby MM may earn a 75% interest by sole funding US$1.4 million onexploration within four years. During the quarter MM commenced an initial fieldassessment designed to guide the forward exploration programme. 5. Luwumbu Platinum Project Goldstream Mining NL 90%, Albidon Limited 10% with operator Lonmin currentlyearning 70% A total of 22 diamond drillholes for 6,930m were drilled during the quarter Thebest intersection was in drillhole NDH 053 which had 4m (206-210m) assaying 0.79g/tonne (Pt+Pd+Au). Drilling is continuing. 6. 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 During the quarter Induced Polarisation ('IP') surveys were completed at theSidi Driss and El Haouaria prospects and yielded several targets that requiredrill testing. Drilling commenced with two rigs at the Bou Aouane prospect in mid August andfive drillholes for 789m have been completed to date. Assay results are expectedin the next quarter. Haffouz Zinc Project Albidon Limited 100% diluting to 30%, subject to a royalty (funded and operatedby Zinifex under an option and earn-in agreement) Work commenced on the Haffouz permit (formerly Trozza) with orientation IPgeophysical surveys being completed at the Touila and Trozza prospects. Followup programmes will be decided when interpretation of the orientation survey datahas been completed. 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 members of TheAustralasian Institute of Mining and Metallurgy. Mr Dunbar and John 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. MrDunbar and John 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 Stephen 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 30 September 2007 Consolidated statement of cash flows Cash flows related to operating activities Current quarter Year to date US$'000s US$'000s1.1 Receipts from product sales and related debtors1.2 Payments for: (a) administration (202) (3,050) (b) development (6,767) (11,163) (c) production (d) exploration and evaluation (1,943) (4,113) 1.3 Dividends received1.4 Interest and other items of a similar nature 261 1,219 received1.5 Interest and other costs of finance paid1.6 Income taxes paid1.7 Other (provide details if material) Net Operating Cash Flows (8,651) (17,107) Cash flows related to investing activities1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets (8,199) (21,103) 1.9 Proceeds from sale of: (a) prospects 250 (b) equity investments (c) other fixed assets1.10 Loans to other entities1.11 Loans repaid by other entities1.12 Recognition of Security Deposits as Cash Net investing cash flows (8,199) (20,853) 1.13 Total operating and investing cash flows (carried forward) (16,850) (37,960) 1.13 Total operating and investing cash flows (carried forward) (16,850) (37,960) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 330 6,9661.15 Proceeds from sale of forfeited shares1.16 Proceeds from borrowings 10,000 10,0001.17 Repayment of borrowings1.18 Dividends paid1.19 Cost of share issue Net financing cash flows 10,330 16,966 Net increase (decrease) in cash held (6,520) (20,994) 1.20 Cash at beginning of quarter/year to date 25,317 38,4691.21 Exchange rate adjustments to item 1.20 (806) 5161.22 Cash at end of quarter 17,991 17,991 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities Current quarter US$'000s1.23 Aggregate amount of payments to the parties included in item 1.2 4231.24 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 US$240,333. Administrative and technical services provided by Mitchell River Group Pty Ltd, a company in which Mr A Cooke, and Dr D Windrim are directors, for the period aggregated US$166,982. 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 US$4,654. 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 US$10,887. Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows Nil2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest Nil Financing facilities available Amount available Amount used US$'000s US$'000s3.1 Loan facilities 80,000 10,0003.2 Credit standby arrangements Estimated cash outflows for next quarter US$'000s4.1 Exploration and evaluation 2,0004.2 Development 31,500 Total 33,500 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 828 2875.2 Deposits at call 17,163 11,4135.3 Bank overdraft5.4 Term deposits 13,617 Total: cash at end of quarter (item 1.22) 17,991 25,317 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 quoted Issue price per security (see note 3) Amount paid up per security (see note 3) number7.1 Preference +securities (description)7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions7.3 +Ordinary 155,556,992 155,556,992 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, converted 7.7 Options 6,067,000 Number Exercise Expiry (description and 0.15m A$0.60 30/04/08 conversion 0.267m A$0.60 30/06/08 factor) 0.4m A$0.75 30/06/08 1.2m A$0.75 01/12/08 0.55m A$1.05 30/06/09 0.15m A$1.70 01/12/09 1.2m A$2.10 27/02/10 0.8m A$2.60 20/05/10 0.25m A$3.14 12/07/10 0.2m A$2.80 12/07/10 0.3m A$2.97 12/07/10 0.6m A$2.23 01/09/10 7.8 Issued during 50,000 Exercisable at A$2.60 expire 20/05/10 quarter 250,000 Exercisable at A$3.14 expire 12/07/10 200,000 Exercisable at A$2.80 expire 12/07/10 300,000 Exercisable at A$2.97 expire 12/07/10 600,000 Exercisable at A$2.23 expire 01/09/107.9 Exercised during quarter7.10 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: 31/10/2007 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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