| Fri 9 Jan 2009, 9:00 | | AEA - African Eagle Resources Plc - Implementation of African Eagle`s Strategic |
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AEA
AEA
AEA - African Eagle Resources Plc - Implementation of African Eagle`s Strategic
Review
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
IMPLEMENTATION OF AFRICAN EAGLE`S STRATEGIC REVIEW
The Company will:
Restrict active operations principally to the Dutwa Nickel Project in Tanzania
Continue to explore other promising nickel laterites in Tanzania, eg Zanzui
Defer a development decision on Mkushi Copper Mines in Zambia
Carefully prioritise other projects
Conserve current cash of GBP2.5 million
Review and renegotiate all active contracts and cut operating costs
African Eagle Resources plc has completed a thorough review of its strategy for
2009, in view of the current unprecedented global market conditions and
commodity prices. The Company will, for the time being, prioritise its projects
carefully, restricting active operations largely to the Dutwa Nickel Project in
Tanzania, placing most other advanced projects of merit on care and maintenance
and relinquishing many of its earliest stage projects.
John Park, Chairman of African Eagle Resources plc states:
"Our Dutwa nickel discovery in 2008, which added some $4 billion of metal in
the ground to the Company`s account within the past six months, demonstrates the
validity and the strength of our past strategy of remaining diversified and
capitalising on opportunities as they arise. Now, however, we are operating in
very challenging times and our first and foremost duty to our shareholders is to
remain in business so that we can realise the benefits of Dutwa and other
advanced assets when markets improve.
"It is important that we continue to make progress and we will therefore
commission an economic scoping study at Dutwa when the current metallurgical
tests are completed later this quarter. The scoping study will be conducted over
the first half of 2009 and will assess the economic viability of the project.
We are also looking at other nickel laterites in Tanzania, such as that at
Zanzui, where we have promising early drill results.
"Mkushi Copper Mines in Zambia remains our most advanced near term production
project. Our JV partner CGA Mining Limited delivered its draft feasibility study
in November 2008, but in the light of current market conditions and copper
prices, the two companies have agreed to defer a decision on project development
for the time being. With a 25 year mining licence in place, the project can
afford to take a breather while the partners look at ways in which the short
term project economics can be improved. We will shortly conduct a VTEM survey,
co-funded by CGA, to search for additional "blind" copper zones.
"Parallel development of multiple exploration projects using our own funds is no
longer sustainable in today`s climate. While Dutwa and Mkushi will be our focal
points for 2009, we are seeking partners to earn interests in our other
projects, such as the Mokambo Copperbelt Project, where last month we increased
our interest to 87%, and the Miyabi Gold Project in Tanzania where we have
identified a 500,000 ounce JORC compliant gold resource.
"We believe that the indiscriminate share price collapse across the resources
sector has failed to take account of the underlying quality of good companies`
assets. Indeed, companies like African Eagle which have sound projects and
relatively high share trading liquidity have suffered much greater falls in
value than tightly-held companies with weaker portfolios, as distressed funds
facing redemption pressure sell those equities which are easiest to trade.
"We perceive potentially good news for shareholders in the new resource funds
which are being formed to take advantage of low valuations in the sector. We
also believe that the fundamentals of metals supply and demand will remain
broadly positive in the longer term. The future will belong to companies which
survive the present downturn, and that have sound assets with low production
costs: we believe that Dutwa especially will prove to be in this category.
"The Board`s duty now is to ensure that African Eagle continues as a going
concern. We are fortunate among our peers in having GBP2.5M cash still in the
bank from our 2007 Johannesburg listing and financing, but we recognise the need
to conserve these funds - this will mean reviewing and renegotiating all
services contracts and cutting our operating costs and overheads sharply to see
out this difficult period, whilst advancing the Dutwa Project to economic
evaluation. Our careful prioritisation of projects, voluntary pay-cuts for
directors and senior managers, and attention to every detail of expenditure,
will ensure that we can realise the benefits of Dutwa and take advantage of
future opportunities."
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 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 draft
Feasibility Study was completed in Q4 2008, and the Dutwa nickel laterite
discovery in Tanzania, where the Company announced a significant resource at the
end of 2008.
African Eagle has also defined a gold resource estimated at half a million
ounces at the Miyabi gold project in Tanzania, and is evaluating a second
promising nickel laterite deposit which it recently discovered in Tanzania. The
Company holds a well-balanced portfolio of promising earlier stage gold and base
metal projects, including the Ndola and Mokambo projects in the Zambian
Copperbelt.
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.
08 January 2009
Sponsor
Nedbank Capital
Date: 09/01/2009 09:00:26 Produced by the JSE SENS Department.
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