Jinchuan Group is conducting a feasibility study for the construction of a nickel smelter to treat concentrates from Albidon"s Munali nickel project in Zambia.

The study will examine a number of alternatives with regard to location and will also examine the possibility of developing related industrial infrastructure. It is anticipated that the feasibility study will be completed in the second half of 2007.

Albidon is working closely with Jinchuan and the Government of Zambia to evaluate the possible smelter development which, if it proceeds, would significantly benefit all stakeholders in the Munali nickel project.

The Munali project is about 60km south of Zambia's capital city Lusaka. The project area comprises the Enterprise Deposit and a number of other nickel prospects in the Munali Intrusion. Construction of the Enterprise Mine is under way.

An offtake agreement will enable Jinchuan Group to buy nickel concentrates from Albidon over the life of the Munali project. Jinchuan will provide a subordinated debt facility of US$20 million in addition to a US$5 million equity investment in Albidon.

Jinchuan Group Ltd is the largest nickel producer in China and one of the largest producers in the world.