Mr Mark Parker MD of African Eagle said that "We are pleased to report significant progress at our exciting Dutwa Nickel Project in Tanzania. Our 120 hole RC drilling program is now underway and laboratory test work is well advanced. We have chosen a contractor for a transport and logistics study and will appoint a contractor for advanced deposit modeling shortly."
He added that "We have also advertised for a Project Manager with a process metallurgical background, one of a number of recruitments and management changes required to transform African Eagle from an exploration group into a nickel development and mining company."
The Dutwa Scoping Study, delivered in July, made a strong investment case for the project, indicating a likely Internal Rate of Return of about 25% at the current nickel price of around USD 8.50 per pound or 17% at the base case price of USD 7 per pound. Net Present Value estimates at these nickel prices were USD 530 million and USD 200 million (pre-tax) respectively.
The Study identified several key areas which could have major positive impacts on the economics of the project. These include increasing the global resource by delineating the adjacent Ngasamo deposit, determining the optimum processing method by conducting further metallurgical test work, and reducing the cost of transporting chemical reagents to the mine site.
Through a successful Offer and Placing in August, the Company raised GBP 3.3 million additional capital to fund these studies and progress the project towards feasibility.
African Eagle has now begun a program of approximately 60 infill and step out drill holes on the main nickel deposit at Wamangola Hill, with the objective of increasing the JORC Inferred Mineral Resource of 31 million tonnes at an average grade of 1.1% nickel, estimated by SRK in November 2008. The drilling should allow the resource to be delineated to Indicated category.
Another 250 kilograms of drill core has been dispatched to Mintek laboratories in South Africa for the second phase of metallurgical test work, which includes tank and column leach tests, rock strength and abrasion measurements and agglomeration tests. This work will help to determine the best extraction process and optimize the parameters such as acid concentration, residence time and leach temperature.
Transport and logistics costs will be a significant contributor to overall operating costs and the Company is currently assessing bids to conduct a detailed investigation into the transport alternatives. The study will examine port options and road, rail and lake transport in both Tanzania and Kenya, with the aim of minimizing transport costs.
African Eagle has begun the process of transformation from an exploration group into a nickel development and mining company. New staff will be recruited to bring in the skills needed, and the Company is currently advertising for a Project Manager with a process metallurgical background and project management experience.
