African Eagle Resources (AIM: AFE) said it has received the last batch of assay results from recently completed drilling at Ngasamo Hill, a part of its Dutwa nickel project in Tanzania. The assays have been sent to Snowden Mining Industry Consultants in Perth for a formal resource estimate.
Managing Director Mark Parker commented: "We are extremely pleased with the drill results from Ngasamo. They reveal a deposit which is somewhat thicker than the main Dutwa deposit, and although the average grade appears to be slightly lower, we expect Ngasamo will add significantly to the overall resource base.”
Of the 66 holes drilled in the vertical reverse circulation (NYSE:RC) programme which was designed to delineate a formal Mineral Resource to JORC Inferred category or better, 59 intersected mineralisation, and highlights include: 75 metres at 1.42 percent nickel, 84 metres at 1.07 percent nickel including 30 metres at 1.64 percent, 63 metres at 1.41 percent nickel including 45 metres at 1.71 percent, and 57 metres at 1.25 percent nickel including 12 metres at 2.48 percent.
Key cobalt mineralisation intersections include 18 metres at 0.47 percent cobalt, 9 metres at 0.43 percent and 9 metres at 0.27 percent cobalt, the latter including 3 metres at 0.48 percent.
African Eagle has also completed an infill drilling programme at the Dutwa main deposit, designed to test the internal variability of the mineralisation and allow the Dutwa main resource to be upgraded to JORC Indicated category.
"Meanwhile, the nickel market continues to show strength, with prices now up more than 40 percent this year, backed by an increase of 55 percent year-on-year stainless steel demand from China," MD Parker said.
With the determination of a resource estimate at Ngasamo to JORC inferred standard or better, African Eagle will have completed its earn-in of a 35 percent interest in the deposit from Ngasamo's owners, Safina a.s. of the Czech Republic and its Tanzanian subsidiary Precious Metals Refinery Company Ltd. Thereafter, the company can increase its equity in Ngasamo to at least 50 percent and up to 75 percent by completing further resource and feasibility work.
Since discovering major oxide nickel deposits at Dutwa, African Eagle is in transition from a diversified explorer into a nickel mining company. The company completed a positive scoping study on the Dutwa deposit in July 2009 and is now working towards a full feasibility study.
African Eagle is evaluating a second promising oxide nickel deposit at Zanzui in Tanzania, 60 kilometres south of Dutwa.
The company also holds a 49 percent interest in the Mkushi Copper Mines joint venture in Zambia, for which a draft feasibility study was completed in Q4 2008. In addition, it 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.
The company is seeking partners or buyers for its non-core copper, gold and uranium projects.
Disclosure: The author holds no positions in the company