Albidon Limited - Quarterly activities report

Albidon Limited

QUARTERLY ACTIVITIES REPORT
For the period ended 31 December 2007

HIGHLIGHTS:

. The main ore zone at the Munali Nickel Project was intercepted in the underground development in late January 2008 two months ahead of schedule.

. Following a review of the construction schedule for the Munali concentrator the forecast date for first ore into the mill has been brought forward to mid-April 2008.

. An initial Inferred Resource estimate for the Voyager Deposit was completed. The deposit is 1.2Mt @ 0.9% Ni and 1.1g/t of platinum group metals ('PGM') containing 11,500 tonnes of Ni and 43,800 ounces of PGM.

. The Enterprise resource has been upgraded with the inclusion of infill drilling of the early stoping levels and additional deep drilling. The Indicated and Inferred Resource for the Enterprise Deposit is now 9.12Mt @ 1.23% Ni and 0.9g/t of PGM at a revised cutoff grade of 0.6% Nickel.

. Byrnecut Mining International Limited was engaged as the mining contractor for the Munali Nickel Project. Byrnecut will expedite underground mine development at Munali to reach initial concentrate production in April 2008.

. The Company has executed placement agreements with Jinchuan Group Limited and ZCCM Investments Holdings Plc to raise US$25 million at a price of A$3.35 (US$2.95 / lb1.45) per share.

. The Company has also secured a further US$20 million in financing from Barclays Capital which has been provided on the same terms as their initial debt finance.

. Following a detailed review of the Munali Project, costs through to positive cash flow are forecast at US$ 124m. The Project is fully funded.

. Semi-massive sulphides have been intersected at the Selibe Phikwe Project in drilling on the Sunnyside EM conductor and geochemical target. Assay results are awaited.

. A 4,300 line-kilometre regional airborne EM survey has commenced over major structures in the Sunnyside region.

Joint Venture Highlights

Chirundu and Kariba Valley Uranium Projects, Zambia (African Energy Resources)

An initial inferred resource estimate has been completed for the Gwabe uranium deposit in the Chirundu joint venture project, Zambia (4.2 million tonnes @ 267ppm U3O8).

Songea Nickel Project, Tanzania (BHP Billiton)

Anomalous nickel and platinum assays have been received from the initial soil sampling programme at the Liparamba target in southwest Tanzania.

Nefza Zinc Project, Tunisia (Zinifex)

Drilling at the Nefza zinc project intersected 8.1m @ 11.7% Zn, confirming some of the historically reported drill intersections from the Bou Aouane prospect.

Corporate

. The cash position at 31 December 2007 was US$16 million.

. 1,545,000 unlisted incentive options were issued during the quarter to employees as follows:

. 508,900 options were exercised during the quarter.

. 100,000 options expired during the quarter due to employees leaving the company.

Outlook

. Continuing progress on the implementation of safety systems at Munali.

. Commence introduction of ISO 9000, 1400, and 08 SAS 1801 standards.

. Plant construction and support systems such as power supply, water supply to be completed in line with targets.

. First ore to the mill in mid-April 2008.

. Recommence Resettlement Action Programme.

. Continued recruitment and training of mining/processing personnel.

. Continuation of drilling on the Sunnyside Ni target, Botswana.

. Complete ground EM geophysics at the Lipadi nickel target in Botswana and commence drilling, as warranted.

. Commence drilling on the Kgwedi nickel target, Botswana.

. Complete the regional airborne EM geophysical survey over the Sunnyside region of the Selebi-Phikwe Project, Botswana.

. Finalise the analysis and interpretation of airborne EM data for the Songea JV with the aim of defining targets for follow up on the ground.

. Complete a Pre-Feasibility Study on the Gwabe and Njame uranium resources on the Chirundu JV, Zambia.