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Nov 2006 - Albidon Limited

Albidon Limited (ALB) – Bringing Munali Into Production at 9,000tpa Ni and ~US$2/lb Cash Operating Costs

  • In the 2.5 years since its IPO in March 2004, Albidon has significantly advanced its main project of Munali Nickel (with Copper, Cobalt and PGE credits) in Zambia. Recently completing the BFS and receiving all the required Zambian approvals for construction and production from the mine at an estimated 900,000tpa to produce 9,000tpa Ni for at least 10 years from mid-2008 at cash operating costs of ~US$2/lb (ERA’s cost estimates are : Operating ~US$1.80/lb,C1~US$1.65/lb,C3~US$2.35/lb).
  • Albidon is currently cutting the box-cut for the portal to develop the underground mine at Munali, and expected to finalise its offtake agreements and financing of the ~US$65m project capex during the current quarter to December 2006.
  • The discovery at Munali is still being extended and has almost reached 110,000t of contained nickel. Due to nearby exploration similarities and potential extensions to the existing mineralisation, Munali may become a Tier 1 discovery (the most sought after by the major companies with a potential profit of >US$1bn).
  • Albidon’s next most advanced project appears to be Njame Uranium, also located in Zambia and immediately SW of Munali. Already a resource of 2,200t U3O8 has been delineated at Njame North, and it appears to have a similar style of banded mineralisation in sandstones to Paladin’s Kayelekera Project further northeast.
  • Although the next most likely mine after Njame at this stage appears to be its Luwumbu Platinum JV with Goldstream and Lonplats, Albidon’s holding is being gradually diluted down to effectively a 3% royalty. However, Albidon does have a number of other exploration prospects that are showing potential in the East African S-shaped nickel belt that passes from Tanzania through to Botswana.
  • Written by: Keith Goode
  • Friday, 03 November 2006