| Fri 18 Jul 2008, 8:00 | | AFE - African Eagle Resources plc - Update on Mkushi Copper Project, Zambia |
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AEA
AEA
AFE - African Eagle Resources plc - Update on Mkushi Copper Project, Zambia
African Eagle Resources plc
(Incorporated in England and Wales, registered number 3912362)
AIM share code: AFE AIM ISIN: GB0003394813
JSE share code: AEA JSE ISIN: GB0003394813
Update on Mkushi Copper Project, Zambia
Feasibility Study on schedule for completion Q4
Resource updated to 18.5Mt at a grade of 0.83% copper
Full Mining Licence application approved
New drill results include:
9.0% copper over 6m
1.9% copper over 22m
2.4% copper over 18m
2.9% copper over 13m
African Eagle Resources plc ("African Eagle" or "the Company", ticker AIM:
AFE; AltX: AEA) announces that its joint venture (JV) partner CGA Mining
today issued an update of progress towards the feasibility study for the
Mkushi project, with new drill data.
African Eagle`s MD Mark Parker comments "The Mkushi project remains firmly on
schedule, with the feasibility study due for completion at the end of
October. The upgraded resource and the Zambian government`s approval of our
application for a full mining licence are major steps on the road to
production, which could begin by mid-2010".
CGA reports that the feasibility study ("FS") is progressing on schedule for
completion during the last quarter of 2008. As CGA is a Toronto-listed
company, the FS is being prepared in compliance with Canadian National
Instrument NI 43-101, "Standards of Disclosure for Mineral Projects"
Snowden Mining Industry Consultants Pty Ltd ("Snowden") has completed a
resource estimate and is preparing an NI 43-101 compliant technical report.
The global mineral resource has been assigned an "Indicated" classification
according to the 2004 edition of the JORC Code and the CIM Standards on
Mineral Resources and
Reserves Definitions and Guidelines, as required under NI 43-101.
The resource estimate includes all drill results and data available up to 29
March 2008, but since March, additional significant assay results have been
received and these will be included in any resource update.
Feasibility Study - Summary of Progress
Metplant Engineering Services ("Metplant", part of Bateman Engineering Pty
Ltd), the principal consulting group carrying out the FS for the process
plant area, has made substantial progress. Having signed off on the project
specification, the design criteria and the mass balance, Metplant is now
drafting layouts. The mechanical equipment lists have been prepared and
requests for quotations on the major items have been issued to suppliers. The
crushing plant, which will be of a modular layout, is being designed by FL
Schmidt Minerals Pty Ltd in conjunction with Metplant.
The application for a full mining licence was submitted after the Zambian
government lifted its recent moratorium on applications. We received a
"Notification of Successful Validation" of the application and now await
setting of the conditions and fees during the next phase of the approval
process.
Snowden has completed a JORC and NI 43-101 compliant resource evaluation,
assigning "Indicated" classification to the mineral resource (see below).
Discussions are advanced with the two main power suppliers in Zambia to
provide a secure supply of power to the operation.
Neil Seldon & Associates Ltd has been engaged to provide copper price
forecasts, and smelter terms and to assist in negotiating preliminary
concentrate off-take arrangements in Zambia.
The FS is on track for completion in the last quarter of 2008.
Resource Estimation
Snowden, an independent resource consultant based in Perth, has completed a
resource estimate for the Mkushi Copper Project, to both JORC and NI 43-101
guidelines.
After visiting site on the 15 to 20 of April 2008 to review the
mineralisation and the data collection procedures, and reviewing the drilling
and sampling data underlying the resource estimate, Snowden is of the opinion
that the resource should be assigned an "Indicated" classification in
accordance with the JORC Code and NI 43-101.
The deposit forms a series of en-echelon pods of chalcopyrite mineralisation
hosted by granitic schist, each pod being several metres to tens of metres
thick. The mineralised zone has a width of about 230m and extends over a
strike length of approximately 1.9km. From near surface, (a few metres), the
mineralisation has been tested to a true depth at least 250m. The mineral
envelope was defined by three-dimensional geological interpretation at
nominal cut-off grades down to 0.1% copper. At the lowest cut-off grades, it
contains significant internal dilution.
The Mineral Resource estimate was undertaken using Datamine Studio version 3
software, based on data and mineral interpretations provided by CGA on 29
March 2008. Block ordinary kriging was used to estimate copper and density
into a constrained cell model reflecting the interpreted mineralisation.
Copper grades were capped at a maximum grade of 8.48% copper prior to
estimation. No capping was applied to density. Search ellipse radii and
variogram ranges used in the estimation reflect the spatial continuity and
the observed mineralisation trends. Orientation of the search ellipse and
variograms was controlled locally using the orientation of the mineralisation
through the application of Datamine Studio`s dynamic anisotropy method.
Estimates were placed into parent cells with dimensions of 5m x 10m x 10m.
These parent cells were subdivided into sub cells of 2.5m x 5m x 1m for
better volume definition. Moisture content was not applicable as only dry
mass was considered.
The model assumes open pit mining for the whole defined resource. An NI 43-
101 technical report will be lodged for the resource statement, covering the
key assumptions, parameters and methods used to estimate the mineral
resource.
The mineralised envelopes were defined by geological interpretation at a
nominal cut-off grade of 0.1% Cu. The resource blocks contain significant
internal dilution. The global mineral resource estimates at a series of cut-
off grades are presented in Table 1.
Table 1
Mkushi Copper Project: May 2008 mineral resource tabulation
(fresh material only) at a series of copper cut-off grades
Cut-off Grade Tonnes Total
Cu (%) (Mt) Copper
(Cu %)
0.1 26.9 0.64
0.2 23.2 0.71
0.3 18.5 0.83
0.4 14.9 0.95
0.5 12.0 1.07
0.6 9.8 1.18
0.7 8.1 1.30
0.8 6.7 1.41
0.9 5.6 1.52
1.0 4.7 1.63
The mineral resource estimate, based on a cut-off grade of 0.3%, is 18.5Mt at
an average grade of 0.83% copper.
Several significant drill results were not included in the resource estimate,
as they were received since the current estimate was made in March 2008. Some
of these results relate to a close spaced vertical RC programme ("VRC")
drilled on a 10m x 10m grid at G Zone. These, along with other significant
recent diamond drill ("DD") and RC results are listed in Table 2.
Table 2
Mkushi Project: Significant Intersections >0.5% Cu
HOLE NO PROSPEC AZIMUT DIP FROM INTERV Cu % TYPE
T H AL
MMUP002 G ZONE -90 8 8 0.93 VRC
MMUP003 G ZONE -90 0 5 1.17 VRC
MMUP005 G ZONE -90 14 11 1.37 VRC
MMUP007 G ZONE -90 20 5 1.21 VRC
MMUP008 G ZONE -90 5 20 1.53 VRC
MMUP009 G ZONE -90 8 17 1.26 VRC
MMUP013 G ZONE -90 9 16 1.69 VRC
MMUP014 G ZONE -90 3 22 1.86 VRC
MMUP015 G ZONE -90 6 2 1.04 VRC
MMUP015 G ZONE -90 16 9 2.25 VRC
MMUP016 G ZONE -90 14 11 1.78 VRC
MMUP017 G ZONE -90 0 7 1.89 VRC
MMUP017 G ZONE -90 12 13 2.91 VRC
MMUP018 G ZONE -90 0 25 2.14 VRC
MMUP019 G ZONE -90 15 7 2.07 VRC
MMUP026 G ZONE -90 23 2 1.62 VRC
MMUP028 G ZONE -90 22 8 2.48 VRC
MMUP029 G ZONE -90 25 6 2.08 VRC
MMUP033 G ZONE -90 22 3 1.20 VRC
MMUP034 G ZONE -90 0 14 1.16 VRC
MH142 H ZONE 142 -50 53 18 2.39 DD
MH142 H ZONE 142 -50 138 4 1.16 DD
MH142 H ZONE 142 -50 145 3 1.73 DD
MH142 H ZONE 142 -50 167 3 1.99 DD
MH142 H ZONE 142 -50 180 6 9.04 DD
MH145 H ZONE 142 -50 111 18 0.54 DD
MH145 H ZONE 142 -50 131 2 1.17 DD
MH145 H ZONE 142 -50 147 10 2.11 DD
MH161 H ZONE 142 -55 93 1 2.78 RC
MH162 H ZONE 142 -55 37 6 1.21 RC
MMUGT2 H ZONE 120 -55 17 15 0.58 DD
MMUGT2 H ZONE 120 -55 50 21 1.70 DD
MMUGT2 H ZONE 120 -55 74 14 0.72 DD
MMUGT2 H ZONE 120 -55 155 8 0.95 DD
The intervals in the above table are the in-hole inclined lengths.
Metallurgical Testwork
Preliminary test work to establish the design criteria for process and plant
design was conducted at AMMTEC Ltd at their Balcatta facility in Western
Australia. Based on core assays, the grade of the core samples sent for
testing ranged between 0.77% and 2.04% copper, with an average of about 1.50%
copper.
The results of the programme indicate that 96% recovery of copper can be
achieved using conventional copper sulphide flotation technology, yielding a
concentrate with 30% copper. The ore as tested does not have any significant
levels of onerous minerals and thus the concentrate would be unlikely to be
subject to any smelter penalties.
Reserve Calculation and Economic Considerations
The conversion from geological Mineral Resources to Mineral Reserves, which
have demonstrable economic viability, depends on numerous factors including
environmental, permitting, legal, title, taxation, socio-political and
marketing issues. The study to date does not show any indication that the
Mkushi Project would be materially disadvantaged by any known factor.
An optimisation of the resource model has been commenced by LQS, based on
economic and mining parameters currently available. It is anticipated that
these will be refined as additional supplier information becomes available. A
first-pass reserve calculation is currently expected in the next quarter.
The new taxation system announced earlier this year in Zambia does not appear
to negate the viability of the project, but will be the subject of detailed
financial analysis over the coming weeks.
Research into the marketing of the copper concentrate, including direct
discussions with off-take companies, indicates that sales agreements would be
negotiable within Zambia itself.
Licences
The application for the mining licence was re-submitted on 1 May 2008, when
the Zambian government lifted its moratorium on new applications. On 26 June
a "Notification of successful validation" was received which confirms the
area applied for. We duly acknowledged this notification and now await the
conditions and fees to be set during the next phase of the approval process.
Regional Exploration
African Eagle Resources plc ("AFE") has continued to carry out regional
exploration work during the quarter. At the Munda prospect, AFE completed
ten RC drill holes and six diamond drill holes for a total of 2223m. Visible
sulphides were intersected in all the diamond holes, showing that
mineralisation extends over a strike length of 2km, but the assay results
have not yet been received. The QA/QC is being conducted in accordance with
standard exploration practices.
Multi-element assay results were received for the regional soil geochemical
survey, a 400m grid over an area of 400km2 for a total of 2500 samples. The
results revealed low contrast copper anomalies at several locations and
showed an apparent concentric zoning around the main mineralized area,
indicative of an alteration system associated with the Munda Granite. With
the regional exploration programme now almost complete, AFE commissioned a
unified interpretation of the geochemical, geophysical and remotely sensed
data.
AFE has also commissioned a helicopter electromagnetic ("VTEM") survey to
search for additional blind mineralisation at depth.
General
Discussions are in progress with the education department concerning the
relocation of the basic school and associated facilities, which are currently
situated close to the mine site. The relocation will provide an opportunity
to build improved facilities for the community.
There are no indications of any major environmental issues. A small number of
local residents would have to be relocated, but the general response from the
community is that they will welcome the project in an area which has only
limited commercial farming and subsistence farming.
Permission has been applied for to draw water form the local river, and has
been given the full support of the ministry and the Lunsemfwa Hydro Power
Corporation Ltd who have water rights covering the area in question.
Two sources of electrical power supply are available in the area: the main
Zesco grid, which passes through the project area and the Lunsemfwa Hydro
Power station 30km to the south. A review of local diesel generation will be
undertaken for completeness.
The site is at an altitude of 1100 m ASL, approximately 123km SSE of Ndola,
the Copperbelt provincial centre, and some 45km SW from the town of Mkushi.
It is easily accessed by the sealed main northern highway from Lusaka to
Kapiri Mposhi, and thence by 30km of existing gravel road to the project
site.
NATIONAL INSTRUMENT 43-101 AND JORC COMPLIANCE
Mr Geoff.G.Jones, F.Aus.I.M.M.CP Mng, CGA`s general manager, technical, is
acting as the Qualified Person in compliance with NI 43-101 and JORC
reporting requirements with respect to this announcement. He has prepared and
or supervised the preparation of the scientific or technical information in
this announcement and confirms compliance with NI 43-101 and JORC
requirements.
Matthew Nimmo of Snowden is the qualified person with regard to the Mkushi
Copper Project resource estimate, and has verified the resource statement as
disclosed in this announcement, including the sampling, analytical and test
data underlying the estimate. Verification of the data included numerous site
visits, database validation of historical drill results and review of
sampling and assaying protocols. The qualified person was satisfied with the
verification process.
Qualified Person (AFE)
Information in this report relating to exploration results is based on data
reviewed by Mr Christopher Davies BSc, MSc, DIC, FSEG, FAusIMM, Operations
Director for African Eagle, who is a Fellow of the Australasian Institute of
Mining and Metallurgy, has more than 27 years relevant experience in mineral
exploration and is a Qualified Person under AIM rules. Mr Davies consents to
the inclusion of the information in the form and context in which it appears.
Technical terms
A glossary of technical terms used by African Eagle in this announcement and
other published material may be found at www.africaneagle.co.uk/african-eagle-
projects-glossary.html
For further information:
Mark Parker
Managing Director
African Eagle
+44 20 7248 6059
+44 77 5640 6899
Nicola Marrin
Seymour Pierce Limited, London
Nominated Adviser
+ 44 20 7107 8000
Charmane Russell
Russell & Associates, Johannesburg
+ 27 11 8803924
+ 27 82 8928052
Ed Portman / Leesa Peters
Conduit PR, London
+44 20 7429 6607
+44 7733 363 501
18 July 2008
About African Eagle
African Eagle is a diversified mineral exploration and development company
operating in eastern and central Africa. The Company`s principal advanced
projects are the Mkushi Copper Mines project in Zambia, for which a
Feasibility Study will be completed in Q4 2008, and the Miyabi gold project
in Tanzania, at which the Company has defined an estimated half-million ounce
gold resource. The Company also holds a large well-balanced portfolio of
promising earlier stage gold and base metal projects, including the Ndola and
Mokambo copper projects.
Zambia, Tanzania and Mozambique, the sites of African Eagle`s projects, are
all countries which have highly prospective geology, relatively low
aboveground risks and track records of successful major investments in the
metals and minerals industries.
African Eagle specialises in project generation and exploration. To take its
discoveries into production, it seeks to sign up industry partners with
records of successful mine development. These joint ventures and, in time,
the revenue from advanced projects, will finance future exploration and new
discoveries.
Date: 18/07/2008 08:00:02 Produced by the JSE SENS Department.
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