Australia-based Lion Selection said on Monday its African Lion funds would sell its 20.5 percent stake in nickel and uranium miner Albidon Ltd .

Lion Selection, a mining company with a diversified investment portfolio ranging from junior explorers through to producing miners, owns 27.5 percent of the African Lion funds which in turn own a 20.5 percent stake in Albidon.

Lion will generate additional proceeds from the sale by the African Lion funds of their investment in Albidon Limited (Albidon), Lion Selection said in a statement.

Based on Albidon's closing share price of $3.94 per share as at 16 May, Lion's indirect share of this investment is worth approximately $37 million, it added.

In a separate statement, Albidon said it continued to work with the Royal Bank of Canada to assess corporate opportunities and to implement its growth strategy.

Albidon is well placed to pursue an aggressive growth and development strategy, the statement said.

Albidon owns the Munali underground nickel mine through its subsidiary, Albidon Zambia Ltd., and it hopes to produce 10,500 tonnes per year from 2010. It started production at its nickel project in Zambia at the end of last week. The report comes after weeks of rumours about Lion selling their stake amid a flurry of merger activity in the sector.

(Reporting by Anna Stablum; editing by Christopher Johnson)

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