Shares in nickel miner Albidon have slumped over 41 per cent as it posts "disappointing" production figures and suspends some development work at its Zambian mine.
Shares in nickel miner Albidon have slumped over 41 per cent as it posts "disappointing" production figures and suspends some development work at its Zambian mine.
Ore production at the company's Munali nickel mine for the December quarter reached 85,562 tonnes at a nickel grade of 0.72 per cent, down from the forecast of 115,000t at a grade of 0.7 per cent.
The miner said the lower production result was largely attributable to breakdowns in underground equipment and a lack of critical spares on a timely basis.
The company is aiming for a production rate of 675,000t at 1 per cent nickel in 2009 before ramping up to 950,000t at 1 per cent nickel from 2010 onwards.
Albidon had previously been aiming to increase the production rate to 1.2 million tonnes per annum.
The company today said it hopes to augment future production by developing and mining the lower grade north area when nickel prices make it economically viable.
The price of nickel has declined from around $US15,000 per tonne from the end of September to around $US10,000/t at the end of December.
In the meantime, Albidon said it will halt development work on the northern decline but accelerate development of the southern decline at the Enterprise deposit.
As a result of the changes, the company has revised its production figures to 5000t nickel in concentrate in 2009 and 7000t from 2010.
Cash costs over the quarter were around $US7 per pound of equivalent payable nickel. The company is aiming to reduce cash costs to $US4/lb in the final quarter of 2009.
"Further restructuring of the Munali Nickel Project operations targeting significant cost reductions must be undertaken in order to render the project a viable concern at current nickel prices," the company said.
"The higher costs in the early part of 2009 reflect the need to rapidly develop the Southern section and open the mine to achieve a production rate of [over] 900ktpa."
Last month, the miner cut its Munali workforce from 260 to 150 employees and closed down in Cape Town and Lusaka offices, while it relocated the Perth office to share premises.
Shares in Albidon slumped from 18 cents to a low of 10.5c before rallying slightly to last trade at 12c at 15:10 AEDT.