Australia’s Albidon awards contract to develop Zambia’s Munali project

GRD Minproc will construct a green fields nickel concentrator as part of the $100 million Albidon Munali nickel project now under development in southern Zambia.

WINDHOEK - 

Australian nickel miner Albidon Limited (ASX:ALB; AIM:ALD) has awarded GRD Minproc, a unit of GRD Ltd, the procurement and construction management contract for 100 percent Munali nickel project in southern Zambia.

As part of the contract, GRD Minproc will deliver a greenfields nickel concentrator with associated infrastructure, the Africa-focused miner said Tuesday in a Regulatory News Services statement to the LSE.

GRD Minproc, an independent engineering construction company, has developed copper, gold and nickel projects for BHP Billiton, Newcrest, Anglo American, CVRD, and Gold Fields.

The US$100 million Munali project will process 900,000 tonnes per year ore to produce an estimated 8,500 tonnes of nickel in concentrate per year, 1,400 tonnes of copper, 400 tonnes of cobalt and 15,000 ounces of PGM over an initial life of mine of 10 years.

The project, based solely on the Enterprise nickel deposit, is located approximately 60 kilometres south of Lusaka in southern Zambia. Construction of the project commenced in September 2006, following a positive bankable feasibility study that indicated that Munali would be low on the cost curve of nickel producers, with a direct cash operating cost of US$2 per pound of nickel in concentrate, before by-product credits and smelting and refining charges.

Albidon has already signed a US$25 million off-take agreement for nickel, copper and PGM with Chinese company Jinchuan Group.

The agreement that provides a framework for the purchase of all nickel concentrate derived from the Munali Project over the life of the mine, a subordinated project financing facility under which the Chinese company will provide funds totalling US$20 million for development of the Munali Project and the subscription by Jinchuan for shares in Albidon with a value of US$5 million.

"Our return to Zambia following the award-winning Kansanshi project comes as we also undertake work on copper/cobalt, uranium and gold projects in the Democratic Republic of Congo, Namibia and Mali," Cliff Lawrenson, GRD Chief Executive, said.

He added, "Through the Munali Nickel Project we will help Albidon make the transition from explorer to miner."

As of May 2006 Munali mineral resources were at 8.0 million tonnes at 1.4 percent nickel and 0.9 grams per tonne PGM, containing 109,000 tons nickel and 223,000 ounces of PGM, at a 0.7 percent nickel cut-off of which 6.9 million tons at 1.4 percent nickel is classified as the indicated mineral resource.

 The Enterprise mine will be an underground operation accessed via a 25 metre deep ‘box-cut' excavation. It is being designed to utilise highly mechanised up-hole benching and long-hole, open-stope mining methods, with the goal of achieving efficient ore extraction and lowering mining costs.

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