African Eagle Resources has reported narrowing losses in the 2009 full year with money raised for its core Dutwa nickel project in Tanzania, sales of non core assets and continuing focus on nickel, which it noted was called one of the hot metals for the longer term.

The company has completed a positive scoping study on its Dutwa project in July and has been drilling the Ngasamo targets in recent months, stating that results from the program have so far matched its expectations.

African Eagle remains focused on nickel even though gold and copper prices continue to rise amid the ongoing economic recovery. The report noted that nickel demand has grown tenfold since 1950, increasing at a higher rate than copper, which has averaged 3.3% YoY growth compared to 4.7% for nickel. Nickel demand is still improving with China currently outstripping every other region.

As fewer sulphide deposits are being discovered and developed, projects like Dutwa are increasingly dominating the industry. Laterites are already providing 40% of the world’s nickel and make up for 80% of global nickel resources. Dutwa is currently considered by African Eagle to be an oxide deposit rather than a laterite deposit as its low iron metallurgy will allow the nickel to be extracted from the ore by simple acid leaching and not by high temperature, high pressure acid leaching.

Column tests at Dutwa show a fast initial leach, extracting about 60% of the nickel within 10 days, followed by another phase that brings extraction to 95% after five months. African Eagle said that it took a year to extract 60% of the nickel from trial heaps at one of the few operating heap leach projects.

Mr Euan Worthington chairman of African Eagle said that "These extremely fast leaching kinetics have important profitability implications, especially for the heap leach method, as they mean that working capital will not be tied up for many months while the heap reaches full productivity."

African Eagle also holds the Zanzui nickel project, which it said could potentially be twice as large as Dutwa and have the same low-acid leaching characteristics.

African Eagle's pretax losses narrowed from GBP 5.5 million to GBP 1.2 million, or from 2.6 pence to 0.5 pence per share. The company has recently raised GBP 3.4 million in an overbooked placement to progress Dutwa and cover overheads.