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Oct 2008 - Albidon Limited

Albidon Limited (ALB) – Increasing Munali’s Production beyond 10,000tpaNi

  • Albidon’s share price closed at A$0.56 on 10 October 2008, only 6c higher than its 50c listing price in March 2004. During the past 4 ½ years, Albidon discovered one of the world’s lowest cost nickel mines in Zambia, financed, constructed and brought it into stoping production by September 2008. Even at the current nickel price of US$5.2/lb, Albidon has an NPV 3 x its current share price, at A$1.70/share.
  • Albidon has announced an expansion from 0.9mtpa to 1.2mtpa using the available capacity in the circuit, being the flash flotation (expected 16% to 20% recovery) and additional tanks, raising nickel production to ~10,000tpaNi from MQ 2009.
  • Although the initial stoping grades appear likely (as expected) to average ~1%Ni, the southern end of the orebody appears to be much richer (at ~2% to 3%Ni) being different nickel mineralisation (similar to PAN’s Savannah) comprising of small country-rock breccia fragments in massive nickel (that may plunge northwards).
  • ALB is undertaking a number of studies aimed at increasing production, such as DMS of the lower grade 0.3% to 0.5%Ni fraction (doubles the grade before adding it to the main mill feed), sinking a decline into Voyager (and probably linking to Enterprise North for greater flexibility), and examining possible open-cuts at Intrepid and elsewhere on the current northern extremities of the intrusion.
  • There appears to be increasing evidence that the intrusion and the orebody plunges under limestone cover to the north. Recent geophys has identified possible deeper extension targets to the north and a possible faulted block to the south, both of which are expected to be drilled during December Quarter 2008.
  • Written by: Keith Goode
  • Saturday, 11 October 2008