News blog

African Eagle Resources

• BY: Andrew Hore |
• POSTED: 21/09/2012 |

African Eagle Resources has announced a resource upgrade at the Dutwa nickel project in Tanzania.

The indicated resource at the Wamangola deposit has risen by 13% to 55.2m tonnes with a nickel grade of 0.94%. This takes the total Dutwa resource to 101m tonnes at a grade of 0.93%. The total metal content is 984,000 tonnes.

African Eagle is selling its Zambian copper assets in order to focus on Dutwa. A bankable feasibility study on Dutwa is due to be completed in the first quarter of 2013.

Elephant Copper bought Katanga Resources Ltd and 49.9% of Kujima Mining and Exploration Ltd. These companies own prospecting licences plus 49% of a company that holds a mining licence for the Mkushi copper mine.

African Eagle will receive 15m shares in Elephant Copper and a 2% net smelter return on the Katanga assets once they reach production. Elephant Copper is unquoted but it intends to reverse into TSX Venture Exchange-quoted shell company Credent Capital Corporation. The book value of the assets was £4.2m at the end of 2011 but this will be revalued in the next interim figures. The deal requires Zambian regulatory approval and it is expected to be completed within three months.

Seymour Pierce reckons that the consideration for the Zambian assets is worth 0.7p a share. The broker also estimates that the Dutwa project is worth 2.4p a share. African Eagle also a stake in a joint venture developing a Miyabi gold project.
Dutwa has an indicated and inferred resource of 98.6m tonnes at a nickel grade of 0.93%. The nature of the deposit means that it should be straightforward to extract the nickel and recoveries could be as high as 80%.

There was £2.29m in cash in the balance sheet at the end of 2011. A further £9.56m was raised from a placing and open offer at 4p a share during April.

At 3.25p a share, African Eagle is valued at £22.6m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFSeptember2012_36.pdf