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Following the discovery of significant intersections of nickel at Avebury, Allegiance has taken just 10 years to reach metal extraction stage. Soon Avebury will be producing one of the world’s richest concentrates of nickel.
However, Allegiance’s long experience in the region makes the company believe that Avebury is just the beginning of their Tasmanian success story.
“Our nickel concentrates will be in excess of 20 per cent - probably quite a bit north of that, and this is very unusual,” Allegiance Mining’s chairman Tony Howland-Rose says.
“But another Avebury-type deposit is certainly possible in the ground to the west of Avebury because there’s a lot of ground between there and the coast. So we have a province and although it’s less than 90 sq km in all, it’s very selected ground, of the right rocks, and the right stratographic situation to yield the same sort of thing, and the drilling we’ve done and the work and research we’ve done, demonstrate that there really is pentlandite, or nickel sulphide, I should say, over much of that area.”
Due to the potential of the Avebury tenement alone, Allegiance Mining has factored future increases in production into the design specifications of its processing plant, allowing for future expansion with minimum disruption.
“The processing plant is nearing completion now,” says Mr Howland-Rose.
“It should be completed in this quarter - it will have throughput of ore of about 900,000 tonnes a year, producing about 8,500 to 9000 tonnes of nickel metal in a concentrate.
“We have embedded in the design facilities to increase throughput to a million and a half tonnes in the near future.”
Nickel prices have fallen sharply since their peak in May last year, with some sources blaming a lack of demand for the decline. However deals struck with China’s largest nickel company, and Allegiance’s major shareholder, Jinchuan, will shield the company from market uncertainty.
“We have a long term contract with Jinchuan,” Mr Howland-Rose says. “Jinchuan will pay a price related to the spot LME rate and it is basically for life of mine, and for any other metals that we might find on the west coast.”
Allegiance certainly believes that there are more metals to find in western Tasmania, and it is pursuing aggressively its summer exploration programme.
“There are two groups of claims,” says Mr Howland-Rose. “One group containing the Avebury deposit is west of Zeehan and the other is east of Zeehan. The most prospective one perhaps is Melba Flats that we announced some results for. Godkin, which is an area we acquired by tender after Zinifex dropped in August – we think that’s high potential – we know it contains nickel sulphide and ultra basics. And (there is) East Renison, which as well as being a very highly prospective for nickel, is prospective for other metals like tungsten and copper.”
Allegiance has enjoyed a strong surge in share price in recent months and the company is bullish for its continued rise this year and beyond.
“2008’s going to be an absolutely fabulous year,” says Mr Howland-Rose. “Because in 2008 we’ll get into production, cash flow will start, we’ll be able to then completely finalize our plans for expansion.
“We will keep the exploration going on an accelerating scale. This is a journey which Allegiance began a decade ago almost to the day, but it’s a journey that really has only just started, and the rewards really will flow from it in an increasing way over the months and years ahead.”
However, Allegiance’s long experience in the region makes the company believe that Avebury is just the beginning of their Tasmanian success story.
“Our nickel concentrates will be in excess of 20 per cent - probably quite a bit north of that, and this is very unusual,” Allegiance Mining’s chairman Tony Howland-Rose says.
“But another Avebury-type deposit is certainly possible in the ground to the west of Avebury because there’s a lot of ground between there and the coast. So we have a province and although it’s less than 90 sq km in all, it’s very selected ground, of the right rocks, and the right stratographic situation to yield the same sort of thing, and the drilling we’ve done and the work and research we’ve done, demonstrate that there really is pentlandite, or nickel sulphide, I should say, over much of that area.”
Due to the potential of the Avebury tenement alone, Allegiance Mining has factored future increases in production into the design specifications of its processing plant, allowing for future expansion with minimum disruption.
“The processing plant is nearing completion now,” says Mr Howland-Rose.
“It should be completed in this quarter - it will have throughput of ore of about 900,000 tonnes a year, producing about 8,500 to 9000 tonnes of nickel metal in a concentrate.
“We have embedded in the design facilities to increase throughput to a million and a half tonnes in the near future.”
Nickel prices have fallen sharply since their peak in May last year, with some sources blaming a lack of demand for the decline. However deals struck with China’s largest nickel company, and Allegiance’s major shareholder, Jinchuan, will shield the company from market uncertainty.
“We have a long term contract with Jinchuan,” Mr Howland-Rose says. “Jinchuan will pay a price related to the spot LME rate and it is basically for life of mine, and for any other metals that we might find on the west coast.”
Allegiance certainly believes that there are more metals to find in western Tasmania, and it is pursuing aggressively its summer exploration programme.
“There are two groups of claims,” says Mr Howland-Rose. “One group containing the Avebury deposit is west of Zeehan and the other is east of Zeehan. The most prospective one perhaps is Melba Flats that we announced some results for. Godkin, which is an area we acquired by tender after Zinifex dropped in August – we think that’s high potential – we know it contains nickel sulphide and ultra basics. And (there is) East Renison, which as well as being a very highly prospective for nickel, is prospective for other metals like tungsten and copper.”
Allegiance has enjoyed a strong surge in share price in recent months and the company is bullish for its continued rise this year and beyond.
“2008’s going to be an absolutely fabulous year,” says Mr Howland-Rose. “Because in 2008 we’ll get into production, cash flow will start, we’ll be able to then completely finalize our plans for expansion.
“We will keep the exploration going on an accelerating scale. This is a journey which Allegiance began a decade ago almost to the day, but it’s a journey that really has only just started, and the rewards really will flow from it in an increasing way over the months and years ahead.”
