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Dutwa Development Update
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)
(“African Eagle” or the “Company”)
Dutwa Development Update
African Eagle is pleased to provide a development update regarding its flagship Dutwa project
in Tanzania. Over the past year the Company has achieved substantial advances in the project
in accordance with its plan for the development of a Bankable Feasibility Study (the “BFS”).
During 2012 the Company undertook a significant amount of work directed toward de-risking
the project and takes this opportunity to update shareholders of developments and outline the
near term plans for further activities.
Principal Advances Achieved in 2012:
- The resource estimate for Dutwa has been upgraded and extended with greater than 100Mt
occurring in the Indicated category grading at 0.92% nickel;
- Extensive metallurgical test work has been performed on both ore types in the two hills comprising
Dutwa (Wamangola and Ngasamo). This has led to much improved understanding and prediction
of process behaviour in terms of beneficiation and leach performance in support of straightforward
and low risk atmospheric tank leaching;
- The Company has significantly advanced its efforts regarding the environmental and social impact
assessment (the “ESIA”), which is being performed in accordance with Tanzanian government
regulations and the Equator Principles;
- Logistics review studies have developed significantly. The Company now believes that rail
transport to and from the project is a viable and secure transport option. Efforts have been
extended to secure agreement with the governments of Tanzania and surrounding countries on
the method and structure of rail operations in support of Dutwa;
- Robust sources of key process reagents (limestone and sulphur) have been identified and their
future supply, demand and pricing has been independently forecast and efforts have been
undertaken to define these opportunities such that supply agreements can be established in
support of the completion of the BFS; and
- Cutfield Freeman and Company (“CF&Co”) has been engaged to provide the Company with
advisory services related to the overall project financing and securing the support of a strategic
partner in the development of Dutwa. The Company has held early stage discussions with certain
potential strategic partners and will shortly expand its efforts in this regard.
Principal Conclusions and Near Term Plans:
- Beneficiation and sequential leaching process data have enabled the consumption of acid and
limestone to be optimised with a good degree of confidence. The estimate of nominal acid demand
per unit of nickel produced is in line with estimates recently announced, though substantially higher
than reported in 2011;
- Operating and capital costs will be subject to re-estimation during completion of the BFS and the
Company anticipates that the potential Dutwa operating and capital costs should remain
competitive when benchmarked against similar projects in the global nickel industry and that
overall project returns are likely to have significant leverage to the nickel price;
- In view of the refinement of the flow sheet, better definition of consumables volumes, changes to
forecast consumables costs, logistics developments and potential resultant changes in capital
costs, the operating and capital cost assumptions included in the Dutwa economic model update of
March 2011 are no longer considered valid and a material increase in operating cost is to be
anticipated;
- To assist with its strategic partner search, the Company is planning to undertake a mini-pilot plant
test programme, which will model the full process flow sheet at a small scale, as a means to de-
risk the more costly main pilot plant and to provide early confirmation of the process performance
predicted by the discrete beneficiation and leach test programmes. The integrated test will enable
the production of limited quantities of nickel product, which the Company will use in its
development activities and in support of the search for a strategic partner; and
- The Company has determined it prudent to defer any other significant new BFS project work
activities, including the planned main pilot plant tests, until the results of the integrated test have
been received.
Commenting on the development progress, African Eagle's CEO, Trevor Moss said “I am pleased
with the solid progress we have made to date on the development of the Dutwa BFS and the
definition of the project that we have been able to achieve. We now have good confidence in the
process method, with beneficiation and sequential leaching offering tangible benefits, and we have
significantly improved the understanding of reagent supply and transportation. We seek to extend that
knowledge further via economical means such as the integrated test, which will provide meaningful
additional data without incurring the significant cost of the main pilot plant.
It is important that the Company seeks maximum benefit for its shareholders and the early
engagement of a strategic partner to assist in the development of Dutwa is a key objective in this
regard. With the assistance of CF&Co we plan to expand our activities toward this objective.”
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.
For further information, please visit www.africaneagle.co.uk or contact:
African Eagle Resources plc
Trevor Moss, CEO
Alex Buck
+44 20 7248 6059
Canaccord Genuity Limited (NOMAD and Joint Broker)
Rob Collins or Andrew Chubb
+ 44 20 7523 8000
Ocean Equities Limited (Joint Broker)
Guy Wilkes
+44 20 7786 4370
Russell & Associates, Johannesburg
Charmane Russell or Marion Brower
+27 11 880 3924
Sponsor
Merchantec Capital
22 January 2013
About African Eagle
African Eagle Resources plc is a nickel development and exploration company listed on the London
AIM (AFE) and Johannesburg AltX (AEA) stock exchanges. The Company's flagship project is the
Dutwa Nickel project in Tanzania located about 25km south of Lake Victoria and 110km east of
Mwanza within greenstone gold belts which host many of Tanzania's operating and developing gold
mines. The Company is currently conducting a Bankable Feasibility Study.
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