production announcement reproduced

Emerging Australian nickel producer, Allegiance Mining NL has commenced mining of nickel sulphide ore at its 100% owned Avebury Nickel Project near Zeehan West Coast Tasmania.
Mining Contractor Barminco Limited has commenced mine development and the North Avebury development drive has produced development ore from the main North Avebury orebody. This large orebody is approximately 40 metres thick at this point and ground conditions are described as good for mining, as expected. The development ore is being stockpiled in readiness for the mill commissioning in the second half of 2007.
Progress at Site
Bulk earthworks for the process plant site are complete and the construction manager for the plant construction engineers, Metplant Engineering Services Pty Ltd has moved to site. Grid electrical power is reticulated throughout the mine and the underground pump station is fully operational. The main ventilation fan has been secured and is being installed over the Viking ventilation shaft. The smaller services shaft is now equipped and fully functional. The tailings dam is well advanced and is ahead of the critical path schedule at this time.
CHAIRMAN’S COMMENT
The summer season is the driest time of the otherwise high rainfall (1.5 to 2.0m p.a.) prevalent on the Tasmanian West Coast. Therefore the last few weeks has been a most active time with the preparation of the site for the mill, tailings dams and wetland recycling systems nearing completion.
Mining has commenced with emphases on development, but it is exciting to note that the first ore for the mill has been stockpiled! Mining will be carefully phased with the construction of the processing facility.
We have taken measures to limit the delays and cost escalations due to the current construction boom, by early ordering of key capital items and a strategy of prequalification and appointing of Tasmanian construction and fabricating contractors. We believe Tasmania has been less affected by the cost inflation and delays seen elsewhere. Whilst not risk free, we feel this is the best route to early production.