Positive Signs For Junior Nickel Miner

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By Greg Peel

Austock reports Albidon Ltd (ALB) is in the process of completing a bankable feasibility study on its Enterprise deposit in Zambia, which it fully owns. The study should be completed soon, and first nickel production is expected in early 2008.

The drilling program implemented over the last six months has led to a perceived increase in the overall size of the resource and a 10% increase in contained nickel. Austock expects resource upgrades to continue as the project is developed.

Further promising results come in the form of concentrate grade of nickel – now 14% compared to 12% previously – and recovery estimates – now 80% compared to 75%.

There will be offsets, notes Austock, as capital and operating costs will no doubt have to be revised upward, however Austock still sees upside based on where it currently pitches the nickel price (US$4.00/lb) compared to spot (around US$8.70/lb).

Austock values Albidon’s Munali project at $1.44ps but this would rise to $5.50 if nickel was priced at spot. This valuation includes no addition for Zambia or any of Albidon’s other exploration assets. Albidon closed at $1.00 yesterday.

Austock rates Albidion as a Speculative Buy.

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