| Tue 11 Jan 2011, 9:00 | | AEA - African Eagle Resources plc - Resource upgrade to JORC Indicated |
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AEA
AEA
AEA - African Eagle Resources plc - Resource upgrade to JORC Indicated
Category at Dutwa Nickel Project, Tanzania
African Eagle Resources plc
Incorporated in England and Wales
(Registration number 3912362)
(AIM share code: AFE AIM ISIN: GB0003394813)
(JSE share code: AEA JSE ISIN: GB0003394813)
RESOURCE UPGRADE TO JORC INDICATED CATEGORY AT DUTWA NICKEL PROJECT, TANZANIA
African Eagle Resources plc (AIM: AFE; AltX AEA) is pleased to announce a
significant resource upgrade at its Dutwa nickel project in Tanzania. This
resource upgrade, by independent geological contractors the Snowden Group,
places more than three quarters of the Wamangola resource (the larger of the
two nickel deposits that make up the Dutwa project) into the indicated
category under the JORC code.
This is the first indicated resource at Dutwa and signifies a leap forward for
the project, with increased confidence in the continuity of the orebody.
Indicated resources can be used to derive formal mineral reserves for the
feasibility study now underway.
The resource statement for the Dutwa project is now as follows:
Mt %Ni %Co Kt Ni metal Kt Co metal
INDICATED
Wamangola 46.2 0.93 0.03 430 14
INFERRED
Wamangola 14.1 0.82 0.02 116 3
Ngasamo 38.2 0.97 0.03 371 11
TOTAL DUTWA 98.6 0.93 0.02 917 28
These resources were estimated under Australasian Joint Ore Reserves Committee
(JORC) Code, 2004.
Highlights of the resource statement upgrade are:
- 46.2 million tonnes (Mt) at 0.93% nickel and 0.03% cobalt (of the total
Dutwa Project 98.6Mt) now in the JORC indicated category.
- Grade increase for the tonnes upgraded to indicated from 0.90% Ni to
0.93% Ni.
- 47% of the total Dutwa resource is now in JORC indicated category and
more will be upgraded after further drilling at Ngasamo later in the
year.
- Indicated resources can be used to derive probable mining reserves for
the pre-feasibility study, due for completion by Q3, 2011.
African Eagle`s Managing Director Mark Parker comments:
"This resource upgrade is another significant milestone in our Dutwa
feasibility study. Snowden has converted a large portion of the Wamangola
resource directly to the indicated category and we will only need to do infill
drilling in areas of structural complexity such as fault zones and areas
around cross-cutting dykes.
Infill and step-out drilling to delineate the smaller Ngasamo deposit fully is
planned in early 2011 and we will then ask Snowden to upgrade from inferred to
indicated.
Meanwhile work for the pre-feasibility study is progressing well and we have
shipped a large portion of the bulk ore samples from both the Wamangola and
Ngasamo deposits to Perth, WA for metallurgical tests."
RESOURCE UPGRADE
In November 2010, African Eagle received assay results from 1 metre samples on
reverse circulation (RC) infill drilling on a nominal 50m x 50m grid in three
200m square panels of the Wamangola deposit. The rest of the deposit is
covered by 3m composite samples on a nominal 100m drilling grid. Wamangola is
the larger of the two nickel deposits which make up the Dutwa project,
accounting for 60Mt of the 99Mt of project resources.
African Eagle`s geological contractor Snowden has now performed geostatistical
analysis of the infill data, giving a detailed assessment of the short range
geological continuity, in order to upgrade the resource classification.
Snowden concluded that most of the Wamangola mineral resource, previously
reported in September 2010, could be upgraded from the inferred to the
indicated category under JORC 2004 guidelines. The upgrade does not apply to
some limited areas, accounting for less than 25% of the resource, which are
affected by major dykes, structural complexity or the pinching out of the
nickel mineralisation. We expect future infill drilling to allow most of these
areas to be upgraded to indicated, however.
Infill and step-out drilling is also planned early this year at the Ngasamo
deposit, which currently accounts for the remaining third of the Dutwa
Project`s total resources. When this is completed, African Eagle will request
Snowden to upgrade the Ngasamo deposit to the indicated category. As the
deposit is geologically similar to Wamangola it is likely that much of it will
also report to the indicated category.
Snowden`s Whittle optimisations for the new economic model, which were based
on the October 2010 block models of the inferred mineral resources, suggested
that a high proportion of the resource is likely to report to reserves.
African Eagle expects that most of the 99Mt resource will be in the indicated
category by the completion of the pre-feasibility study in Q3 2011, allowing
formal probable mining reserves to be defined. The final detailed drilling of
areas of structural complexity will probably be performed for the definitive
feasibility study or after commencement of mining.
The table below sets out the current mineral resources for the whole Dutwa
project.
Dutwa mineral resource statement, as of January 2011
Tonnage Grade Major element oxides 1
Mt Ni % Co % eNi eNi SiO2% Al2O3 Fe2O3 MgO%
% 2 kt % %
3
Wamangola
Indicated
FerSil 35.4 0.9 0.03 0.94 333 73.59 2.53 12 3.74
Trans 10.8 1 0.02 1.03 111 54.08 1.85 12.19 17.07
Sub-total 46.2 0.93 0.03 0.97 444 69.02 2.37 12.05 6.87
Inferred
FerSil 7.5 0.76 0.02 0.79 59 72.55 2.8 12.64 3.85
Trans 4 0.85 0.02 0.88 35 54.84 2.74 12.72 15.78
Sap 2.5 0.95 0.02 0.98 24 35.4 0.37 7.41 34.54
Bedrock 0.1 0.91 0.01 0.92 1 33.38 0.17 7.02 41.16
Sub-total 14.1 0.82 0.02 0.85 119 60.51 2.32 11.68 13.07
TOTAL 60.3 0.9 0.02 0.93 560 67.03 2.36 11.96 8.32
Ngasamo
Inferred
FerSil 19 0.9 0.04 0.95 181 73.85 1.94 12.58 4.98
Trans 12.5 1.07 0.03 1.11 139 59.71 1.5 14.04 13.91
Sap 6.7 0.98 0.04 1.03 69 39.11 0.63 16.02 26.02
Bedrock 0.02 0.62 0.01 0.63 0 39.7 0.17 7.94 35.91
TOTAL 38.1 0.97 0.03 1.01 386 63.11 1.56 13.66 11.61
GLOBAL 98.6 0.93 0.02 0.96 946 65.51 2.05 12.62 9.59
TOTAL
1 Key elements of metallurgical importance, expressed as oxides. The very
high silica concentrations are a benefit for heap leaching while the low
aluminium, iron and magnesium concentrations help explain the low acid
consumption during leaching.
2 eNi % (equivalent nickel) = Ni % + (Co % x 1.32); based on US$10/lb Ni
and US$17/lb Co, with recoveries of 90% for Ni and 70% for Co. A cutoff grade
of 0.43% eNi was used for the resource estimates.
3 Contained tonnage of equivalent nickel metal.
Small discrepancies may occur due to the effects of rounding.
PRE-FEASIBILITY PROGRESS
The first 12 tonne representative bulk ore sample has now been shipped to
Perth, WA. Bench scale metallurgical and geotechnical testwork will begin in
January 2011 on the bulk sample, to help us choose the optimum processing
route for the Dutwa ore. Drilling will commence later this month for an
additional 10 tonnes of sample, which will be used for pilot plant testwork,
including continuous tank leaching tests and large scale tests using columns 6
to 8m high to replicate heap leach behaviour.
The results of bench scale tests being carried out by Mintek in Johannesburg
on RC drill samples from Ngasamo are expected to be received in January 2011.
A programme of infill and step-out drilling at Ngasamo to fully define the
deposit and allow the Ngasamo resource to be substantially upgraded from the
inferred to the indicated category has been designed ready for drilling to
commence later this year.
Over the coming months, African Eagle`s new financial model for Dutwa,
prepared by independent consultants Simulus, Snowden and AMEC Minproc, will be
progressively improved and used to evaluate alternative processing options
such as heap leaching; higher throughputs; production of different
intermediate products and the economic impact of using rail transport as
opposed to road.
Other studies underway include a regional assessment of limestone deposits
within 200km of Dutwa, further improvements to the transport study and the
Environmental and Social Impact Assessment required for the definitive
feasibility study.
Qualified Person
Information in this report relating to Mineral Resources is based on work
completed by Richard Sulway BSc, MAppSc, MAusIMM (CP). Richard Sulway is a
member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and
has sufficient experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity to which he is
undertaking to qualify as a Competent Person as defined in the 2004 edition of
the "Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves" (the JORC Code) and is hence a Qualified Person under AIM
rules. Richard Sulway is a full-time employee of Snowden Mining Industry
Consultants Pty Ltd. Richard Sulway consents to the inclusion in the report
of the matters based on his information in the form and context in which it
appears.
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 30 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/p/glossary.asp
Sponsor
Merchantec Capital
11 January 2011
For further information:
Mark Parker
Managing Director
African Eagle
+44 20 7248 6059
+44 77 5640 6899
Jeremy Stephenson
Nicola Marrin
Seymour Pierce Limited, London
Nominated Adviser and Co-Broker
+44 20 7107 8000
Guy Wilkes
Ocean Equities Limited
Co-broker
+44 20 7786 4370
Charmane Russell / Marion Brower
Russell & Associates, Johannesburg
+27 11 880 3924
+27 82 895 0698
Ed Portman / Leesa Peters
Tavistock Communications, London
+44 20 7920 3150
+44 77 3336 3501
Dutwa project overview
African Eagle is developing the major Dutwa nickel project in Tanzania. The
Company discovered Dutwa in 2008 and is now conducting a feasibility study.
Economic modelling in late 2010 indicated a pre-tax project NPV of US$650
million at a nickel price of $8/lb, with an estimated average cash cost of
$3.37/lb nickel. The model was based on throughput of 3 million tonnes per
year for 26 years with processing by atmospheric tank leaching to a mixed
hydroxide intermediate product, requiring estimated initial capex of $600M and
yielding life of mine earnings of $8.2bn at $8/lb nickel. The mining schedule
was derived from Whittle optimisations of block models of an October 2010
inferred mineral resources. The financial models will be progressively
improved as the feasibility study progresses.
Mineral resources are currently 98.6 million tonnes grading 0.93% nickel and
0.02% cobalt, of which 46.2 million tonnes are in the JORC indicated category
and the remainder in the JORC inferred category. The Company believes that
further drilling will increase the total resource by up to 10Mt.
The Dutwa project consists of two nickel laterite deposits which form the caps
of two ridges about 7km apart. The current JORC mineral resources, at a 0.43%
nickel equivalent cut-off, are 98.6Mt grading 0.93% nickel and 0.02% cobalt,
containing in total 948,000 tonnes nickel metal equivalent. Of this, about
half is now in the indicated category and half in the inferred. Because the
deposits are at the surface, mining will be straightforward and strip ratios
very low. The Ni equivalent (eNi) was calculated using the formula:
eNi = Ni + ( Co * (RCo/RNi) * (PCo/PNi)
)
Ni + (Co * 1.32)
=
using metal prices (P) of US$10/pound Ni and US$17/pound Co, and metal
recovery factors (R) of 90% for Ni and 70% for Co, derived from metallurgical
test work conducted by African Eagle.
The Company believes that the resources can be increased by another 8Mt to
10Mt with further drilling. There is also future upside at Zanzui, 50km to the
south, where the Company is evaluating another significant nickel laterite
resource, and at Nyawa, 15km west of Dutwa.
Metallurgical tests have shown that the nickel ores are unusually easy to
process, giving good recoveries from heap or tank leaching at atmospheric
pressure, with no need for costly high pressure acid leach (HPAL).
African Eagle currently holds a 90% interest in the eastern Wamangola deposit,
which hosts approximately 60% of the total resource, with an option to acquire
100%. The Company has signed a joint venture with the SAFINA Group of the
Czech Republic under which African Eagle will earn an interest of between 50%
and 75% in the western Ngasamo deposit by conducting and funding evaluation
work. On completion of the feasibility study, the two companies` joint venture
interests will be converted into equity in the combined project. African Eagle
estimates that it will then hold about 76% of the equity.
About African Eagle
Since discovering a major nickel oxide deposit at Dutwa in Tanzania, African
Eagle is in transition from an explorer into a nickel company. The company
completed a positive scoping study on the Dutwa deposit in July 2009 and is
now working towards a feasibility study.
In addition to Dutwa, African Eagle is also evaluating a second promising
nickel oxide at Zanzui, which is located 60 km from Dutwa. The Company holds a
49% interest in the Mkushi Copper Mines joint venture in Zambia, for which a
draft feasibility study was completed in Q4 2008. It also holds a half million
ounce gold resource at the Miyabi project in Tanzania, and a portfolio of gold
and base metal exploration assets, including two projects in the Zambian
Copperbelt.
Date: 11/01/2011 09:00:01 Produced by the JSE SENS Department.
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