Message Ven 15 Avr 2011 06:52

Albidon projects US$412m cash surplus after study on Enterpr

Friday, April 15, 2011
Albidon projects US$412m cash surplus after study on Enterprise Deposit in Zambia

Albidon (ASX: ALB) has confirmed the potential for increased company cash flows and a projected cash surplus of up to $US412 million after a revised Life of Mine (LOM) study at the Enterprise Deposit at the company’s wholly owned Munali Nickel Project in Zambia.

The company consulted Mining Plus and Southern Mining Consultants to prepare the revised LOM including recent updates and assessments for production and costs at the deposit.

The net present value of the project with a discount rate of 12% is in the range of US$203 – US$274 million.

The projected cash surplus of the project has estimation in the range of US$291 – US$412 million.

Using the current nickel spot price in net present value calculations and final cash position, the company has targeted the higher projections made by the consultants.

The LOM did not include current operating costs or the potential for resource upgrades from exploration at the site.

Albidon remains in negotiations with the company’s lender, the Jinchuan Group, to restructure current debt facilities so that repayment terms are manageable within the LOM.

Munali is well served by road, rail and power infrastructure as well as water supplies, and comprises the two deposits of Enterprise and Voyager.

Development of the Enterprise nickel deposit commenced in September 2006 following a positive Bankable Feasibility Study and receipt of the necessary government permits and approvals.

The Enterprise project produces 5900 tonnes annually of nickel in concentrate from a 950,000 tonne annual underground mining operation involving straightforward extraction methods and conventional processing technology.