African Eagle said that it would begin work on the feasibility study of the Dutwa nickel laterite project in Tanzania. The company last week announced that it would raise GBP 3.8 million to make a start on work leading to a feasibility study on the Dutwa project.
African Eagle said that the final scoping study report showed the potential upside at metal prices higher than the base case prices, and allowed the company to begin work to improve the bottom line by reducing costs and optimizing revenue.
The scoping study identified several key areas where further test work and detailed study were likely to result in improvements to the bottom line or to gains in confidence. These areas included an improved global deposit model and the potential for early high grading.
The Ngasamo resource would be drilled and incorporated into a more sophisticated global resource model and mining plan. From this, it would be possible to establish whether richer ore can be mined first, giving increased early cash flow and an improved net present value.
Further test work also needed to be done on the ore beneficiation and project scale. African Eagle noted that the capital and operating costs of the plant would be reduced if mechanical beneficiation of the ore prior to leaching yields a smaller tonnage of richer material for processing through the plant.
African Eagle said in a statement that "Transport is a substantial part of the reagent costs and ways to minimize this will be investigated, as will the availability of more local sources, particularly of lime."
Mr Mark Parker Md of African Eagle said that "Using current metals prices and recent long term forecast prices, the investment case for the project is very strong. The study indicates that if Dutwa were in production today, it would be making a comfortable profit."
Finally, African Eagle said that as a potentially low cost producer, the upside for the Dutwa project was considerable if nickel prices were above the USD 7 per pound used in the base case.
Drilling at the Ngasamo deposit will start in September 2009.
(Sourced from www.miningweekly.com)
