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 Pr�bram 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 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. 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.
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