08/11/2012 - 15:49

Albidon backs up at Munali after resource downgrade

08/11/2012 - 15:49

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Nickel miner Albidon is reviewing its Munali development in southern Zambia after announcing a 42 per cent plunge in  the project's nickel resource.

Albidon said today that a resource report prepared by Snowdon Mining Industry Consultants showed a 25 per cent drop to the indicated resource tonnage and a 42 per cent decrease in indicated nickel metal contained in the deposit.

The company said it no longer had the required level of confidence in the project's original technical and economic modelling to go ahead with development at Munali.

Albidon said any further progress at Munali would have to be preceded by cost estimates, mine planning and geotechnical work, which would require considerable time and resources to undertake.

“The board will continue to work closely with majority shareholder Jinchuan Group to determine a strategy that is appropriate for Albidon at this time,” the company said in a statement.

Albidon said it would continue to work with independent technical experts and further studies to determine the technical and economic viability of the Munali project were also continuing.

“The downgrade of the Munali project ore reserves will result in a material impairment to the carrying value of Albidon's assets,” Albidon said.

“The final extent of the impairment is still being determined an will be included in Albidon's 2011 financial results, which will be released to the ASX in due course.”

At close of trade today, Albidon stocks were trading at 7.5 cents.

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