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After reviewing its Dutwa nickel project in Tanzania, African Eagle Resources (LON:AFE) said today that it has streamlined the development programme for the project in order to focus efforts on the timely completion of the Dutwa bankable feasibility study.
Current tasks supporting the BFS are advancing, said the firm.
These include: drilling to upgrade the JORC-compliant mineral resource from indicated to inferred and to define its geology better; a definitive metallurgical test programme designed to achieve the early definition of the optimal process plant; the extension of the logistics studies; and the development of a full social and environmental impact assessment
African Eagle said that the main phase of resource upgrade drilling has now been completed, with favourable new nickel metallurgical results achieved.
Meanwhile, it has identified a limestone source that is highly reactive and suitable for acid neutralisation, offering the potential to minimise external reagent requirements and reduce operating costs.
“African Eagle's prior studies have confirmed the viability of Dutwa and recent analyses have identified various opportunities for project optimisation which are currently being tested and are exhibiting favourable preliminary results," said Trevor Moss, the designated chief executive officer who joined the board in September.
"To derive the maximum benefit from these studies and to ensure the overall project timeline, it is important that we ensure Dutwa progresses in a controlled way that results in an integrated and comprehensive BFS.
"Any other approach would run the risk of extending the development timetable and increasing the overall development cost. This programme negates the need for the previously planned formal pre-feasibility study report and all of the on-going studies will be fed directly into the BFS."
To derive the maximum benefit from these studies and to ensure the overall project timeline, it is important that we ensure Dutwa progresses in a controlled way that results in an integrated and comprehensive BFS,”
Moss added that African Eagle aims to complete the bankable feasibility study by the end of 2012 but that the firm may revise the timetable in order “to ensure we take full advantage of opportunities to add value to the project”.
In a note, broker Ocean Equities pointed out that the most significant difference between a pre-feasibility study and a bankable feasibility study was the level of detail contained within the report.
"At this point, African Eagle has several detailed models on the various development and processing options, all based on up-to-date cost estimates. Therefore, there is an argument that African Eagle has already surpassed the detailed requirement for a pre-feasibility study and that producing such a report would be a backwards step in the development of Dutwa," said the broker.
"African Eagle’s decision to bypass the pre-feasibility study is an indication of the team’s confidence in the metallurgical test results received to date."
Another broker Seymour Pierce rates the stock a 'buy' and targets a price of 20 pence per share.
"The streamlining of the programme has led to African Eagle aboandoning the need for its previously planned formal prefeasibility study report and all studies will now be fed directly into the BFS," it said in a note.
As at 2.35 pm, African Eagle shares were trading up 1.92 per cent, changing hands at 6.63 pence.