The Citizen (Dar es Salaam)
7 July 2009
African Eagle Resources Plc will seek a partner for its Dutwa nickel project in Tanzania in about a year, South Africa's Business Day reported, quoting the company's operations director, Mr Christopher Davies.
African Eagle would need an "institutional partner" such as the Industrial Development Corp., or a mining company, to provide funds and skills to develop the site, the Johannesburg- based newspaper reported, adding that African Eagle's expertise is in exploration.
The major nickel discovery at Dutwa was poised to eventuate into a low-cost mine by 2012 when some analysts were forecasting a nickel price of $8/lb, Mr Davies said at the weekend.
He told Mining Weekly Online that the economic viability of the proposed nickel project had been based on a nickel price of $7/lb and a breakeven price of $6,50/lb.
At $7/lb, the project would yield $1,5-billion in revenue over the life-of-mine, which was currently 21 years. On Friday, nickel was trading at $7,30/lb and, prior to the global economic meltdown, the price as high as $11/lb.
Agitated-tank-leach technology was found to be the most viable of the processing options, followed by heap leaching, and no recourse would be necessary to the expensive, high-pressure acid-leach technology that had given nickel laterites a bad name, Mr Davies added.
The study also used $100/t for transport costs, but Mr Davies expected those costs to decline appreciably as a result of new planned investment in the port of Mombasa, as well as proposed new investment in rail networks in Tanzania and Kenya, which would significantly improve the economics of the project.
There was potential to high-grade in the first operational years of the project, which would sweeten returns further. African Eagle finance director Bevan Metcalf said that the Aim- and JSE-listed company still had £1,5-million in cash.
Mr Metcalf said that the pre-feasibility study under way would require an investment of between £2-million and £2,5-million and the company would need to raise additional funds in the coming months. He said that the funds were likely to be raised by way of a private placement.
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