25th Oct 2005 10:08
Albidon Limited25 October 2005 Suite 1 Hillway House 141 Broadwayalbidon Limited Nedlands 6009 Western Australia ARBN 107 288 755 Tel: +61 8 9389 6300 Fax: +61 8 9389 6400 Email: [email protected] ASX Code: ALB AIM Code: ALD via electronic lodgement Paste the following link into your web browser to download the PDF document related to this announcement: http://www.rns-pdf.londonstockexchange.com/rns/1120t_-2005-10-25.pdf Exploration Agreement on Albidon's Uranium Prospects OVERVIEW • Albidon Limited and Energy Ventures Limited (EVE) have entered into an agreement for the exploration and development of a number of uranium and coal prospects that have been identified on Albidon's tenements in Zambia. • Under the Agreement major exploration programs will commence immediately with A$500,000 to be spent by EVE within two years to maintain an option to enter a Joint Venture on one or more project areas. • Following these programmes EVE may earn a 30% interest in each project area selected by it for farm-in by expending A$1 million on the selected project area, and may then proceed to earn a 70% interest by drilling up a JORC Indicated Resource and completing a Prefeasibility Study. • The Agreement enables Albidon to remain focused on developing its nickel projects in southern Africa while adding value to its tenements through the funding and expertise provided by a specialist energy exploration company. BACKGROUND Albidon is principally engaged in the exploration and development of nickelprojects in southern Africa. These projects are located within the Company'slarge tenement portfolio that spans the countries of Zambia, Botswana, Tanzaniaand Malawi. Whilst these licences were taken up on the basis of their nickelpotential, a recent review of the prospectivity of the tenements for othermetals indicates there is potential for discovery of uranium in a portion ofAlbidon's extensive land holdings in Zambia. Albidon's uranium prospects comprise a number of occurrences of mineralisationwithin sediments of the Karoo Basin which is the host sequence for severaluranium deposits in southern Africa. The prospects were identified duringuranium exploration of the Kariba Valley in the 1970's and 1980's howeverdocumentation is sparse and there has been no follow up exploration the past 20years. The areas of interest for uranium and other energy minerals are adjacent to butgeologically separate from those that are the focus of Albidon's ongoing nickelexploration activities (refer to attached Map). The Company has decided to farm out these uranium prospects to a specialist,Africa-focused energy exploration company upon terms considered attractive forAlbidon. This approach has the benefit of bringing focussed exploration activityto the early stage uranium prospects whilst not diverting funds or managementresources from Albidon's nickel activities. ENERGY VENTURES LIMITED Energy Ventures Limited is an ASX-listed company specialising in the explorationof uranium, coal and coal-bed methane projects in Mozambique, Zambia, Botswana,Zimbabwe and Malawi. The company is run by experienced Africa-based explorationmanagement and chaired by Dr Ian Duncan who, through a number of previously heldsenior management positions at WMC's Olympic Dam Operations, has extensiveexperience of all technical and commercial aspects of the development of energyminerals projects. DETAILS OF THE AGREEMENT • EVE must expend a minimum of A$500,000 on exploration of the specified projects during an Evaluation Phase that expires in two years. • This expenditure will secure for EVE the exclusive right to enter farm-in agreements on one or more projects under pre-agreed terms as set out below. • EVE may select the areas it wishes to farm-into within two years. Each project area selected requires a separate farm-in agreement. The following terms apply to each farm-in agreement: - EVE must expend at least A$300,000 per annum. - EVE may sole-fund A$1 million of project expenditure to earn a 30% interest in the project. EVE's expenditure during the Evaluation Phase on the areas the subject of the farm-in will be credited towards this. - EVE may earn a 70% project interest by sole-funding exploration and development expenditure by drilling up an Indicated Mineral Resource as defined in the JORC Code and completing a Prefeasibility Study. - Thereafter Albidon may elect to contribute 30% of project funding. - In the event Albidon elects not to participate at a 30% interest, EVE's interest will increase to 80% in return for committing to a Bankable Feasibility Study and sole-funding the first A$10 million of the study. - Albidon may then elect to fund its 20% share of further project costs; or may require EVE to fund Albidon's share of project costs in return for an additional 5% interest (leaving Albidon with 15% carried into production); or alternatively Albidon may elect to convert its interest to an agreed Net Smelter Return ('NSR') (for example 1 to 3% sliding scale in the case of uranium). DISCLOSURE Three of Albidon's directors have a declared interest in EVE. These directorshave not been involved in the negotiations with EVE. All discussions betweenAlbidon and EVE have been conducted by the Company's independent directorsacting under external legal and technical guidance in accordance with thehighest standards of corporate governance. The Company is looking forward to working closely with EVE to realise thediscovery potential for uranium on these projects. If you have any queries please contact the Chief Financial Officer, Nicholas Dayon +61 8 9389 6300. Additional information may also be viewed on Albidon'swebsite at www.albidon.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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