London, England — MININGREVIEW.COM — 12 January 2009 – African Eagle Resources plc – a diversified mineral exploration and development company operating in eastern and central Africa – has been forced to make the second major revision to its business strategy in less than year, in order to cope with deteriorating market conditions.
In a new release issued here, the company announced that it had decided to prioritise its projects carefully, restricting active operations largely to the Dutwa nickel project in Tanzania, placing most other advanced projects of merit on care and maintenance, and relinquishing many of its earliest stage projects.
The company announced these decisions after completing a thorough review of its strategy for 2009 in view of the current unprecedented global market conditions and commodity prices.
African Eagle’s principal advanced projects are the Mkushi copper mines project in Zambia – for which a draft feasibility study was completed in Q4 of 2008 – and the Dutwa nickel laterite discovery in Tanzania, where the company announced a significant resource at the end of 2008.
“Our Dutwa nickel discovery in 2008 – which added some US$4 billion (R38 billion) of metal in the ground to the company’s account within the past six months – demonstrates the validity and the strength of our past strategy of remaining diversified and capitalising on opportunities as they arise,” said African Eagle chairman John Park.
“Now, however,” he added, “we are operating in very challenging times, and our first and foremost duty to our shareholders is to remain in business so that we can realise the benefits of Dutwa and other advanced assets when markets improve.”
Park underlined the importance of continuing to make progress. “We will therefore commission an economic scoping study at Dutwa when the current metallurgical tests are completed later this quarter. The scoping study will be conducted over the first half of 2009 and will assess the economic viability of the project,” Park continued. “We are also looking at other nickel laterites in Tanzania, such as that at Zanzui, where we have promising early drill results.”
Park confirmed that African Eagle was to delay development of its proposed Mkushi copper mine in Zambia and would, instead, focus on assessing the viability of its Dutwa Nickel project in Tanzania.
He said the company intended placing most of its other advanced projects on care and maintenance while it continued to look for partners to help fund them, and it would relinquish many of its earliest stage projects.
Park added that the board’s duty now was to ensure that African Eagle continued as a going concern. “We are fortunate among our peers in having â‚¤2.5m cash still in the bank from our 2007 Johannesburg listing and financing,” he pointed out.
“We recognise the need to conserve these funds. This will mean reviewing and renegotiating all services contracts and cutting our operating costs and overheads sharply to see out this difficult period, while advancing the Dutwa project to economic evaluation.” According to Park, measures to be taken include voluntary pay cuts for directors and senior managers.