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Monday, January 02, 2006

Allegiance nears offtake arrangements

Allegiance nears offtake arrangements

ALLEGIANCE Mining expects to have an offtake agreement for its $77 million Avebury nickel project in Tasmania in place in the next six weeks, and has unveiled a $7.2 million placement to push forward the project's development.

The company's chairman Tony Howland-Rose told MiningNews.net Allegiance had been in discussions with every possible offtake partners.

"Everyone has come to us, mainly because of the quality of the concentrate, which is 20-22% (nickel), one of the best in the world," he said.

He confirmed China's largest nickel producer – the Jinchuan Group – had been speaking with Allegiance.

"As you know Jinchuan is expanding faster and more dynamically and into a better sales market for their products, sophisticated and otherwise, than anybody else," Howland-Rose said.

"So cutting a long story short, they're one of the prime contenders."

Allegiance will produce 5700 tonnes of nickel from Avebury from the end of 2006 before ramping up production to more than 10,000t.

Howland-Rose said the oversubscribed placement, of $7.2 million (priced at 15c per share), would allow the company to advance infrastructure, pre-mill preparation, mine preparation and long lead time ordering during the "good weather months" in Tasmania.

"Tasmania rains all the time except it rains less for three months of the year," Howland-Rose said.

The placement was completed to four funds, three overseas entities and a small number of investors – all undisclosed.

Shares in Allegiance were up 0.5c or 3.33% to 15.5c in midday trade.

Click here to read the rest of today's news stories.


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