SYDNEY, Aug 31, 2008 (Dow Jones Commodities News via Comtex) --...

SYDNEY, Aug 31, 2008 (Dow Jones Commodities News via Comtex) -- Resources investor Lion Selection Ltd. (LST.AU) Monday said the sale of its 20.5% stake in nickel miner Albidon Ltd. (ALB.AU) has failed because of weak market conditions.
"The sale of Cracow and Albidon failed due to weak market conditions and both continue to be held," Lion said in a quarterly release, also referring to the attempted sale of its 30% stake in the Cracow gold mine in Australia.
"Since the announcement, the share price has come off with the rest of the nickel market, and there hasn't been a transaction. Because of current market conditions, the sale failed," a Lion Selection spokesman said.
Lion formally announced its intention to sell its stake in Albidon in May, which, paired with the company's Munali nickel mine coming into production, helped drive Albidon's share price some 70% higher at the time.
The proposed sale made the nickel miner a takeover target, and market commentators tipped Anglo-Swiss miner Xstrata Plc (XTA.LN), Russia's Norilsk Nickel (GMKN.RS) and OZ Minerals Ltd. (OZL.AU) as interested acquirers.
But analysts also said interest from major nickel miners may be muted given Albidon's life-of-mine offtake agreement with China's largest nickel producer, Jinchuan Group.
Albidon's share price has plummeted since May, slumping from a high of A$5.10 to around A$2.20, under pressure from nickel prices scraping to a two-year low as well as the general share market rut, halving the company's market capitalization to A$355 million.
Albidon's main asset is the Munali nickel mine in Zambia that is set to produce around 10,000 metric tons of the metal.
-By Elisabeth Behrmann, Dow Jones Newswires;
61-2-8235-2965; [email protected]
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(END) Dow Jones Newswires
08-31-08 2211ET
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