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
N�quel 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 750km�. 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.
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