| Tue 7 Apr 2009, 8:00 | | AEA - African Eagle Resources plc - Potential to increase Dutwa Resource to |
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AEA
AEA
AEA - African Eagle Resources plc - Potential to increase Dutwa Resource to
50 million tonnes
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
AFRICAN EAGLE SIGNS OPTION ON NGASAMO LICENCE:
POTENTIAL TO INCREASE DUTWA RESOURCE TO 50 MILLION TONNES
* Option and Joint Venture agreement signed with SAFINA
* African Eagle can earn up to 75% of Ngasamo nickel laterite, 5km west of
Dutwa
* Potentially increases Dutwa resource by more than 50%
African Eagle Resources plc has signed a Letter of Intent for an option and
joint venture with SAFINA a.s. of the Czech Republic and its subsidiary Tanzania
Precious Metals Refinery Limited (TPMRL), over the Ngasamo licence, adjacent to
the Dutwa nickel laterite project in Tanzania.
Under the agreement, African Eagle can earn an interest of up to 75% in Ngasamo
by carrying out exploration and evaluation work, leading up to a feasibility
study. The licence area contains a nickel laterite which appears very similar
to the Dutwa deposit.
Mark Parker, Managing Director of African Eagle Resources plc comments: "This is
a very significant agreement for African Eagle, as Ngasamo has the potential to
increase the global resource at Dutwa to 50 million tonnes, from the current 31
million tonnes at 1.1% nickel. Ngasamo Hill lies just 5km west of the Dutwa
deposit and has very similar geology, with a thick laterite blanket overlying
identical ultramafic rocks. Our geologists believe that the Ngasamo deposit is
of the order of 15 to 20 million tonnes, but obviously, drilling and
metallurgical tests will be needed to confirm the size, grade and compatibility
with the Dutwa ore.
"Our partner TPMRL is the Tanzanian subsidiary of SAFINA Group, a substantial
metals and chemicals group from the Czech Republic. SAFINA is keen to become a
fully contributing partner in the nickel project, and could bring significant
capabilities to the partnership."
Agreement details
Under the agreement, African Eagle will complete an initial programme of surface
surveys, including sampling of old prospectors` pits and trenches. Subject to
the results, African Eagle will commence a formal earn-in agreement, acquiring a
35% interest by managing and co-funding a drilling programme to define a JORC
inferred resource, and then a 50% interest by advancing this to a JORC indicated
resource. Thereafter, the Ngasamo laterite resource would be included in the
Bankable Feasibility Study of the Dutwa nickel-cobalt project. If, subject to
agreement, African Eagle solely funds the cost of this development, then its
interest in Ngasamo would increase to 75%, whilst its existing 100% interest in
Dutwa remains unchanged. Once the Feasibility Study of the combined Dutwa and
Ngasamo Project has been completed, TPMRL will become a partner in the combined
project, with the two parties` equity percentages calculated from the relative
attributable values of the project held by each.
About SAFINA Group
SAFINA`s history reaches back to 1860 when a company named G. A. Scheid`sche
Affinerie Vienna was founded in Austria. In 1920, this company established a
subsidiary in Prague, processing gold and silver scrap and selling semi-finished
precious metals products for jewellery and dental purposes. After World War II,
Sheid`s refinery was put under the control of Poibram Ore Mines, together with
ten other refineries processing precious metal. This state company implemented
production of platinum catalysts and laboratory instruments, electrical
contacts, copper foils, electrolysis of silver and other technologies.
A new independent state-owned company named SAFINA was established in 1950. The
main activities of this company were refining, assaying and processing precious
and noble metals, electroplating, production of metal powder, production of
laboratory equipment and trading in precious metals. SAFINA was privatised in
1992 as SAFINA, a.s.
Today, SAFINA, a.s. has a dominant position in precious metals processing, not
only in the Czech Republic, but within Europe. The company has become a business
offering manufacturing and services across nine independent product lines. In
early 2007, the STENA SAFINA joint-venture was established with the Stena Metall
Group, the Nordic leader in recycling and environmental services with operations
at 230 locations in nine European countries, to recycle electronics waste
according to the European WEEE directive (Waste of Electrical and Electronic
Equipment).
In 2005, the SAFINA Group, together with her Tanzania partners, established
Tanzania Precious Metals Refinery Limited (TPMRL), to provide gold refining
services to the large and small-scale mines in Tanzania. SAFINA Group holds 51%
of TPMRL, with Tanzanian partners holding the balance. TPMRL has acquired a site
in Mwanza to construct a gold refining operation. In June 2006, TPMRL acquired
the mineral rights over the Ngasamo area for its gold potential.
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 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. In April 2009, African Eagle
signed a Letter of Intent for an option and joint venture over the Ngasamo
licence, which is adjacent to the Dutwa project.
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.
Ngasamo Hill, which lies 5km west of the Dutwa deposit appears geologically very
similar, probably holds a laterite deposit of the order of 15 to 20 million
tonnes, which would bring the global resource at Dutwa, from the currently
defined 31 million tonnes at 1.1% nickel, to 46 - 51 million tonnes. Drilling
and metallurgical tests will be needed to confirm the size, grade and
compatibility of Ngasamo, but first indications are very promising. Under its
agreement with Ngasamo`s owners, (SAFINA a.s. of the Czech Republic and its
Tanzanian subsidiary Precious Metals Refinery Company Ltd), African Eagle can
earn an interest of up to 75% in Ngasamo by carrying out exploration and
evaluation work, up to a feasibility study.
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 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.
07 April 2009
Sponsor
Nedbank Capital
Date: 07/04/2009 08:00:03 Produced by the JSE SENS Department.
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