Australian nickel miner, Albidon, is set to resume exploration under its Selebi- Phikwe prospecting licence after a six-month hiatus caused by the fall in global nickel prices.
Albidon collapsed in March, following a slump in world nickel prices, which were among minerals and commodities negatively affected by the global recession. Prior to the recession's onset, Albidon had been operating the Munali Nickel Mine in Zambia for less than a year, while prospecting for the same mineral in Botswana, Tanzania and Tunisia.
Outside Zambia, Albidon had hoped to progress the Selebi-Phikwe exploration to resource estimation and further development, using the mine development experience gained at Munali and benefiting from the geological similarities between the countries.
Prior to the company's collapse in March, it had been targeting nickel sulphide mineralisation near Selebi-Phikwe and also in Tati. This area borders the resource already being mined by BCL Mine (Selebi Phikwe) and Tati Nickel Mining Company's Phoenix and Selkirk Mines. Albidon owns 21 prospecting licences covering 11 262 square kilometres around this area and had recorded some positive results through a drilling programme covering four nickel prospects.
Last week, it emerged that the Australian miner could soon be back in Botswana, should its shareholders approve a debt settlement and recapitalisation deal. Albidon shareholders will meet next month to accept or reject a Deed of Company Arrangement (DOCA) through which Chinese company, Jinchuan, aims to rescue and control the troubled nickel miner.
Jinchuan has offered to acquire Albidon's secured debt from Barclays Bank and the European Bank, while also shouldering the costs payable to Albidon's lenders. Albidon would also receive P161.6 million from the issue of its shares and convertible notes to Jinchuan, enabling it to restart Munali and exploration programmes such as those in Botswana.
"We have experienced unforeseen delays in meeting certain conditions of settlement under the DOCA were outside the control of the Deed Administrators. These delays were primarily attributable to finalising an agreement with Barclays Bank Zambia Plc on the repayment terms under an equipment finance facility, along with finalising the documentation associated with the transfer of the secured debt facilities to Jinchuan and the secured convertible note facility.
"The Barclays Bank Zambia agreement has now been executed. The Jinchuan facility agreement and convertible note deed are expected to be executed in the coming days, and at this stage, we anticipate issuing a notice of shareholders' meeting within one or two weeks, with the meeting to be held in the second half of October 2009.
"Settlement under the DOCA is to occur within two business days of shareholder approval (if obtained)," an Albidon board statement said.
Once Albidon's shareholders approve the DOCA, enabling it to apply to the Australian Securities Exchange (ASX) and the London's Alternative Investment Market (AIM) for re-quotation of its shares.
Albidon is among a handful of companies either exploring or exploiting Botswana's considerable nickel resource. The others include Tati Nickel with two mines, BCL Mine and Discovery Metals Limited, which is primarily pursuing a copper project in Maun, but is also developing a nickel project near the Albidon concession area.