A recent report by Mining Weekly has indicated that African Eagle is currently planning to begin the process of raising GBP 3.8 million in order to start work on a feasibility study of Tanzania’s Dutwa nickel laterite project.
In an announcement that was made earlier this week, African Eagle said that the final scoping study report had demonstrated the potential for metal prices to be higher than the base case prices, which, therefore, made it possible for the company to begin the process of improving the overall bottom line through the reduction of costs and the optimization of revenue.
According to Mining Weekly, the recently completed scoping study has identified that the further testing and additional studying of several critical areas would likely result either in improvements to the bottom line or in gains in confidence.
Among the areas that will receive additional attention is the creation of an improved global deposit model and the potential for early high-grading.
In addition, drilling would commence on the Ngasamo resource, which would then be integrated into a more sophisticated global resource model and mining plan.
Based on these results, it will be possible to determine whether or not it is possible to mine richer ore first, thus increasing early cash flow and leading to an overall improvement in net present value.
Furthermore, the report also indicated that additional testing was required on the ore beneficiation and project scale.
To this end, according to African Eagle the plant’s overall capital and operating costs were likely to be reduced the mechanical beneficiation of the ore was able to yield a smaller amount of richer material for processing through the plant prior to beginning the leaching process.
In order to determine these factors, advanced leaching test work will also be required in addition to column and vat leach tests that will be used to help determine the best operating conditions to be used in order to best optimize nickel extraction.
According to a recent statement that was released by African Eagle, reagent cost reductions have also been identified as an area that requires further investigation as they compose a significant portion of overall operating costs, the reduction of which will result in increased profitability.
“Transport is a substantial part of the reagent costs and ways to minimize this will be investigated, as will the availability of more local sources, particularly of lime,” said the statement.
In addition to this testing, the company also indicated that more sophisticated fiscal and economic modeling would also be required as the scoping study’s current economic model did not fully take into account the various tax incentives for exploration and mine development that are available in the Tanzania mining sector.
With all of this taken into account, the Managing Director for African Eagle, Mark Parker, indicated in the Mining Weekly report that the investment case for the Dutwa project remained strong.
“Using current metals prices and recent long-term forecast prices, the investment case for the project is very strong,” he said, “The study indicates that if Dutwa were in production today, it would be making a comfortable profit.”