Name and Location
Dutwa nickel laterite project, Tanzania.

Client
Aim- and ASX-listed African Eagle Resources.

Project Description
The Dutwa project comprises two nickel laterite deposits, namely Wamangola and Ngasamo Hills, located about 7 km apart.

The project is targeting openpit mining, with minimal prestripping required.

Nickel ores will be processed in a hydrometallurgical treatment plant with a nominal throughput of three-million tons a year to produce about 27 000 t/y nickel in concentrate, using atmospheric tank leaching.

The concentrate is expected to contain about 50% metal in the case of a mixed sulphide product or 35% metal in the case of a mixed hydroxide product.

Dutwa has an estimated life-of-mine of more than 20 years.

Value
Should an atmospheric tank-leach plant be considered, the project would require an estimated capital expenditure of $600-million. Alternatively, a heap-leaching plant will cost an estimated $550-million to develop.

Duration
A bankable feasibility study is expected to be completed in 2013 and first production is targeted for 2016.

Latest Developments
African Eagle has reported substantial progress at the Dutwa project.

During 2012, the company undertook a significant amount of work directed toward derisking the project.

The resource estimate for the project has been upgraded and extended, with more than 100-million tons occurring in the indicated category grading at 0.92% nickel.

Extensive metallurgical test work has been performed on both ore at Wamangola and Ngasamo.  This has led to an improved understanding and prediction of process behaviour in terms of beneficiation and leach performance in support of straightforward and low-risk atmospheric tank leaching. 

African Eagle has significantly advanced its efforts regarding the environmental- and social-impact assessment (ESIA).
 
Logistics review studies have developed significantly.  The company believes that rail transport to and from the project is a viable and secure transport option.  Efforts have been made to secure agreement with the governments of Tanzania and the surrounding countries on the method and structure of rail operations in support of the project.

Robust sources of key process reagents (limestone and sulphur) have been identified and their future supply, demand and pricing have been independently forecast. Efforts have been made to define these opportunities so that supply agreements can be established in support of the completion of the bankable feasibility study (BFS).

The company has held early-stage discussions with certain potential strategic partners and is expected to expand its efforts in this regard.

Operating and capital costs will be subject to re-estimation during the completion of the BFS. It is expected 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 expected.

To assist with its strategic partner search, the company is planning to undertake a minipilot plant test programme. This will model the full process flow sheet on a small scale to derisk 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 African Eagle will also use in its development activities.

The company has deemed 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.

Key Contracts and Suppliers
GRD Minproc, now part of the Amec group of companies (scoping study); Mintek Laboratories (acid-leach tests and mineralogical analyses); Cutfield Freeman and Company (advisory services – overall project financing and securing strategic partner); Lycopodium Minerals (BFS engineering contractor); Knight Piésold (geotechnical engineer); SGS (pilot plant laboratory), Citrus Partners and MTL Consulting (ESIA).

On Budget and on Time?
Not stated.

Contact Details for Project Information
African Eagle Resources, tel +44 20 7248 6059, fax +44 20 5640 6899 or email info@africaneagle.co.uk.
Mintek Laboratories, tel +27 11 709 4111, fax +27 11 793 2413 or email info@mintek.co.za.
Cutfield Freeman and Company, tel +44 207 349 5250 or fax +44 207 349 5270.
Lycopodium Minerals, tel +61 8 6210 5222 or fax +61 8 6210 5201
Knight Piésold, tel +27 11 806 7111 or fax +27 11 806 7100.
SGS, tel +27 11 680 3466 or fax +27 11 433 3654.
Citrus Partners, email info@citrus-partners.com.
MTL Consulting, tel +255 22 2120882.