| Thu 26 Mar 2009, 9:00 | | AEA - African Eagle Resources plc - African Eagle awards contract for Dutwa |
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AEA
AEA
AEA - African Eagle Resources plc - African Eagle awards contract for Dutwa
Scoping Study
African Eagle Resources plc
(Incorporated in England and Wales, registered number 3912362)
JSE share code: AEA JSE ISIN: GB0003394813
AIM share code: AFE AIM ISIN: GB0003394813
AFRICAN EAGLE AWARDS CONTRACT FOR DUTWA SCOPING STUDY
Another step progressing Dutwa towards production
- Dutwa Nickel Project Scoping Study awarded to GRD-Minproc
- Study expected to demonstrate economic viability of the project
- Results to be available June 2009
African Eagle Resources plc has awarded the contract for an economic scoping
study of the Dutwa Nickel laterite project to Australia-based GRD-Minproc. The
study will be an `order of magnitude` scoping study to assess the economic
viability of the project and to investigate the optimum way to develop the
deposit.
Mark Parker, Managing Director of African Eagle Resources plc comments: "As well
as scoping the economics of the project, this study will play a key role in
deciding the best route to development. An important early outcome of the study
will be a recommendation on the next phase of metallurgical testwork. Given the
deposit`s straightforward metallurgy and low acid consumption, recently
determined by Mintek Laboratories, we believe that either heap or tank acid
leaching at atmospheric pressure is likely offer the most cost-effective
extraction, allowing capital costs to be kept to a minimum."
The selection of GRD-Minproc as contractor was made following a review of a
number of extremely high quality proposals from the most well recognised
companies in the field.
The key elements of the study will be:
Geology and Mining: review the November 2008 resource estimate and upgrade part
or all to JORC/SAMREC Indicated category; evaluate the impact on project
economics of adding additional resources; review all mining methods, economics
and options.
Metallurgy and Processing: review the existing metallurgical and mineralogical
test data and recommend further test work required for feasibility studies;
conduct a technology and cost review of leach options and recommend a preferred
process route; review the practicalities and costs of alternative sources of
acid and other reagents; review and cost requirements for ancillary facilities,
services and utilities; review waste and tailings handling options and costs.
Economics: estimate capital and operating costs and working capital
requirements; identify and analyse key sensitivities; model the project Net
Present Value (NPV) and Internal Rate of Return (IRR).
The study, which will be completed in mid-June, will be predominantly a desktop
conceptual study, based on existing data and reasonable assumptions, with costs
estimated to +/-30%.
GRD Minproc
GRD Minproc has extensive experience in the nickel laterite industry having been
involved in a number of studies and projects containing heap leach, atmospheric
leach and autoclave leach along with a variety of downstream processing routes.
In recent years, GRD Minproc has undertaken more Nickel Laterite projects and
studies than any other contractor or consultant, including:
- Prefeasibility and Full Feasibility Studies for Vale`s Niquel do Vermelho
Project, Brazil
- Scoping Study for INCO`s Bahodopi laterite project in Indonesia
- Preliminary mining, processing and cash flow model for Heron Resources`
Kalgoorlie Nickel Project, Western Australia.
- Prefeasibility studies for Vale Inco at the Sorowako and Pomalaa projects,
Indonesia.
- Feasibility Study for BHP Billiton`s Ravensthorpe project, Western
Australia.
- Optimising the plant at Cawse nickel laterite project, Western Australia
- Optimise and improve nickel output at Bulong, Western Australia
- Review and approve the basic engineering for Sumitomo`s Rio Tuba project,
Philippines.
GRD Minproc`s Process Group includes a pool of process engineers with experience
in heap leach projects from study level through to commissioning and operation.
This experience will provide a thorough understanding of the technical and
commercial issues relating to the Dutwa Nickel Project.
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 / Gareth Tredway
Conduit PR, London
+44 20 7429 6607
+44 (0) 7733 363 501
About Dutwa
African Eagle has discovered a significant nickel laterite deposit within the
Dutwa project area, which lies in the Kilimafedha belt (Swahili for "money
hills") of the Lake Victoria Goldfield.
Operationally, the project is favourably situated, 100km east of the railhead at
Mwanza and close to the main Mwanza-Nairobi trunk road, a major power line and
the shore of Lake Victoria.
Greenstones and granites underlie the area. The greenstones, of Archaean
Nyanzian age, are mostly metamorphosed volcanic and sedimentary rocks, with some
banded iron formation in the east. Several large ultramafic bodies intrude the
greenstones and the nickel laterites form a blanket up to 60m thick on top of
these.
The Dutwa project area is composed of several prospecting licences covering a
total area of about 750kmSquared. The Company holds 90% interests, with options
to acquire 100%, over most of this ground, including the area of the laterite
discovery, and the remainder is under application.
African Eagle acquired the Dutwa project for its gold potential, but its
exploration team quickly recognised that there was significant nickel laterite
potential. Geochemical soil surveys carried out by African Eagle over the whole
of the project area identified a promising 5km-long nickel anomaly and a number
of gold anomalies. There is very little outcrop, so the Company conducted
extensive ground magnetic surveys to reveal the underlying structure and
geology. The Company has also compiled historical data, including detailed
geological maps and trench results dating from 1956, when rock chip samples from
the trenches over the ultramafic rocks were reported as yielding up to 1.9%
nickel and 10% chromium.
To investigate the nickel anomaly, the Company undertook trial drilling in June
2008. The results were very encouraging and a 139-hole reverse circulation (RC)
drilling programme was completed to delineate the resource. African Eagle also
undertook a 10-hole diamond drill programme to obtain core samples for
metallurgical testing and density measurements.
In November 2008, African Eagle announced an initial Inferred Mineral Resource
estimate of 31 million tonnes at an average grade of 1.1% nickel and 0.034%
cobalt. At a cut-off grade of 0.5% nickel, this gives Dutwa a contained metal
endowment of some 340,000 tonnes of nickel and 11,000 tonnes of cobalt. The
estimate was prepared by independent consultants SRK Consulting (UK) Ltd in line
with the Australasian Code for Reporting of Mineral Resources and Ore Reserves
(the JORC Code). SRK classified the estimate as an Inferred Mineral Resource in
terms of the JORC code, but noted that the deposit is a continuous mineralised
body of simple geometry, which has been well delineated by the drilling, and
could be promoted easily to Indicated category with more density measurements
and improved knowledge of the metallurgy.
The Company despatched 100 kilograms of mineralised drill core and RC chip
samples to Mintek Laboratories in Johannesburg for investigations into the
mineralogy and metallurgy of the deposit, especially tests of the amenability of
the material to sulphuric acid leaching. Mintek carried out mineralogical
characterisation by X-ray diffraction (XRD), scanning electron microscopy (SEM)
and polished section work, to determine the nature of the ore body, and extended
`bottle roll` acid leach tests on ten samples, to investigate metal recoveries
and acid consumption.
The bottle roll test results show nickel extractions of 70-90% with an average
of 83%, based on assays of the samples prior to the test and of the solid
residues at the end of the test. Cobalt extractions were mostly in the range 70
to 85%. The acid consumptions, averaging 209kg/t, are very low compared to other
Ni laterite ores worldwide.
The mineralogical investigations show that the laterite is extremely silica-
rich, with low iron and magnesium content, indicating that Dutwa is not a
typical laterite nickel deposit. Mintek believes that much of the nickel and
cobalt occurs in "wad" with manganese content of 20-60%, nickel content of up to
20% and cobalt content of up to 10%.
The unusual mineralogy of the deposit is beneficial, as it results in lower acid
consumption and would be likely to give good heap leach permeability or
favourable liquid-solid separation in tank leaching. The concentration of nickel
and cobalt in the manganese wad offers possibilities that mechanical selection
of high-grade material may allow reduced throughput and hence a lower cost
processing plant.
As the next step in the process, African Eagle has commissioned a Scoping Study
to investigate the key operating parameters and to assess the economic potential
of the project. The results of the study will be available in mid-June 2009.
The Company has also completed a trial programme of RC drilling to test a
laterite at its Zanzui project, 70km to the south of Dutwa. Results included
42m at 1.05% nickel (including 6m at 2.80%) and 33m at 0.91% nickel (including
9m at 1.41%).
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 Dutwa nickel laterite discovery in Tanzania, where the Company
has commissioned a scoping study, and the Mkushi Copper Mines project in Zambia,
for which a draft Feasibility Study was completed in Q4 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.
26 March 2009
Sponsor
Nedbank Capital
Date: 26/03/2009 09:00:01 Produced by the JSE SENS Department.
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