| Wed 29 Oct 2008, 9:00 | | AEA - African Eagle Resources plc - Update on Mkushi Copper Project, Zambia |
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AEA
AEA
AEA - 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 end October 2008
- NI 43-101 compliant resource report lodged
- Full Mining Licence granted
- Competitive power supply offered
- Exploration results indicate resource upside
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 on the feasibility study for the Mkushi project, with new
drill data.
African Eagle`s MD Mark Parker comments, "The Mkushi feasibility study remains
on schedule for completion at the end of October. Good progress continues to
be made - the granting of our full mining licence and the power supply offer
from Lunsemfwa are major steps on the road to production, which could begin by
mid-2010.
"Mkushi is one of the priority projects that African Eagle is rapidly
advancing towards production. We have also recently announced very exciting
drilling results at our Dutwa nickel project".
In its review of the quarter ended 30 September, CGA reports that the detailed
feasibility study (FS) is progressing in line with the schedule and remains on
track for completion during October 2008. Exploration has shown that there is
potential for additional resources to be delineated.
Resource Estimation
The NI 43-101 compliant technical report for Munshiwemba has been completed by
Snowden Mining Industry Consultants Pty Ltd ("Snowdens"). The report confirms
the global mineral resource estimate also prepared by Snowdens in July 2008
and has assigned it an "Indicated" classification according to the 2004
edition of the JORC Code and NI 43-101. The new report, entitled "CGA Mining
Limited: Mkushi Copper Project Zambia Independent Technical Report August 2008
prepared by Snowdens" was lodged with SEDAR on 3 September 2008 and is
available to download from www.sedar.com
Regional Exploration - Exploration Drilling Results
African Eagle, which has responsibility for exploration outside the core area
at Mkushi, has now received all results from the 2,223 metre drilling
programme on the Munda Prospect, conducted between March and June 2008. The
results are promising and indicate that there is potential for additional
copper resources within three kilometres of the main Munshiwemba deposit.
To date, mineralized zones which seem likely to provide additional resources,
if satellite pits can be developed, have been identified at three locations:
Munda, Coloquo and Mtuga.
Table: Munda Prospect -Significant Drill Results
HOLE ID TYPE FROM TO INTERVAL Copper %
m
MMD7 DD 5 10 5 0.96
MMD7 DD 76 85 9 0.45
MMD7 DD 119 128.3 9.3 0.53
MMD7 DD 132 168 36 0.87
MMD7 DD 184 188 4 0.38
MMD8 DD 33 37 4 1.15
MMD8 DD 124 126 2 0.81
MMD10 RC 76 82 6 0.25
MMD13 DD 53 56 3 0.78
MMD13 DD 132.4 139 6.6 0.32
MMD13 DD 149 156 7 0.59
MMD14 DD 14 18 4 0.83
MMD14 DD 112 120 8 0.47
MMD14 DD 145 149 4 0.69
MMD14 DD 151 153 2 1.68
MMD14 DD 159 179 20 0.77
MMD15 DD 87 96 9 0.90
MMD15 DD 99 114 15 0.90
MMD18 RC 6 10 4 0.57
MMD18 RC 55 59 4 0.49
MMD18 RC 68 73 5 0.37
Detailed Feasibility Study
Metallurgical test work has been carried out by AMMTEC Ltd at their Balcatta
facility in Western Australia. This test work has established that a simple
conventional copper sulphide flotation technology yields in excess of 96%
recovery, generating a concentrate with 30% copper. The ore as tested does not
have any significant levels of deleterious minerals and thus would not
experience any smelter penalties.
The test work so far has shown that the process can economically extract
copper from the mineralization at the Mkushi Project.
The principal consulting group carrying out the Feasibility Study ("FS") for
the process plant area is Metplant Engineering Services/Bateman Engineering
Pty Ltd ("Metplant"). Metplant has signed off on the project specification,
the design criteria and the mass balance, completed the design layouts and
prepared mechanical equipment lists. Metplant has also issued requests for
quotations to suppliers for all the major items and responses from these are
expected before the end of October 2008. The crushing plant, which will be of
a modular layout, is being designed by FL Schmidt Minerals Pty Ltd in
conjunction with Metplant.
The two main power suppliers in Zambia submitted proposals to provide a secure
supply of power to the operation. Following an independent review of these two
proposals and alternative diesel power generation, a memorandum of
understanding was signed with Lunsemfwa Hydro Power Company Ltd.
Designs and cost estimates for the infrastructure covering the administration
offices, workshops, mine offices, accommodation, basic school, etc have been
carried out by Metplant in conjunction with a Zambian Engineering consultant.
A new basic school is required as part of the relocation required on site
prior to mining, and discussions with the relevant government departments are
well advanced.
The mine design and scheduling work was carried out by Lower Quartile
Solutions Ltd (LQS), a Perth based mining consultant, with contract mining
costs provided by Moolmans of South Africa (part of the Aveng Group).
LQS has conducted an optimisation of the resource model, which is being
progressively refined as definitive supplier cost information becomes
available. A first-pass reserve calculation is expected before the end of
October 2008.
Neil Seldon & Associates Ltd were engaged to provide copper price forecasts
and smelter terms, and to assist in negotiating preliminary concentrate off-
take arrangements. Research into the marketing of the copper concentrate
strongly indicated that off-take sales agreements could be negotiated with
buyers within Zambia and this has been supported by direct discussions with
off-take companies.
The application for a full Large Scale Mining Licence for a period of 25 years
was approved on the 22nd July 2008 by the Zambian government. The fees for the
Mining Licence (11973-HQ-LML) have been paid and the Ministry of Mines and
Mineral Development (MoMMD) is in the process of issuing the licence
certificate.
An Environmental Impact Assessment ("EIA") and Resettlement Action Plan
("RAP") have been submitted to the Environmental Council of Zambia ("ECZ") for
approval. ECZ is required to review and decide on approval within 60 working
days and a response is expected during early October 2008. The EIA and the RAP
approval will complete all the environmental approvals for the project to
commence.
A community consultation meeting to discuss the RAP was completed in
September. The meeting represents the final prerequisite for the ECZ to grant
approval for the EIA.
Application has been made to the Zambian Water Board for a licence to draw
water from the Lumsemfwa River for mine and processing usage. The application
has been reviewed by the board and advertised for community comment. The
principal water right holder on the Lunsemfwa Catchment, the Lumsemfwa Hydro
Power Company has provided written support for the licence application. Issue
of the licence is now dependent on ECZ`s approval of the EIA.
Negotiations are at an advanced stage with the Ministry of Education ("MOE"),
to relocate the Mkushi Copper Mine Basic School. MOE is expected to agree to a
Memorandum of Understanding in the next quarter. The relocation will result in
the current rundown school being replaced with modern infrastructure with
reliable power and water supply.
National Instrument 43-101 and JORC Compliance (CGA)
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 NI43-101 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 (0) 7733 363 501
About Mkushi Copper Mines
African Eagle, in joint venture with CGA Mining of Australia, expects to have
the elements in place to complete a feasibility study for its Mkushi Copper
Mines project at the end of October 2008. A 25-year mining licence was
granted in July 2008.
Mkushi is a medium-sized copper project, with a JORC Indicated resource of
12.3Mt at 1.03% with a cutoff grade of 0.5%, or 23.5Mt at average grade of
0.7% copper with a cutoff grade of 0.2%. Exploration has revealed several
other mineralised zones nearby and these are likely to add to the resource in
time.
Mkushi is a brownfield site with excellent local infrastructure. There is a
railway and sealed roads within 20km, good gravel roads and an airstrip. The
Lunsemfwa Hydro Power Company, 30km to the south, has offered to supply power
on competitive terms.
Metallurgically straightforward, the Mkushi ore yields a 30% copper
concentrate with 96% recovery via a simple process of crushing, ball mill
grinding and flotation with regrind. The Mkushi deposit is geologically
distinct from the main Copperbelt deposits of Zambia, and occurs in much older
rocks.
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, the Miyabi gold project in
Tanzania, at which the Company has defined an estimated half-million ounce
gold resource, and the Dutwa nickel laterite discovery in Tanzania, where the
Company expects to announce a resource at the end of 2008. African Eagle is
also evaluating a second promising nickel laterite deposits which it recently
discovered in Tanzania. The Company holds a large well-balanced portfolio of
promising earlier stage gold and base metal projects, including the Ndola and
Mokambo copper projects in Zambia.
Zambia, Tanzania and Mozambique, the sites of African Eagle`s projects, are
all countries which have highly prospective geology, relatively low above-
ground 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.
29 October 2008
Sponsor
Nedbank Capital
Date: 29/10/2008 09:00:01 Produced by the JSE SENS Department.
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