Mining company African Eagle Resources has announced strongly positive metallurgical test work results for its flagship Dutwa Nickel Project in Tanzania.

The results, which have come in ahead of expectations laid out by studies in 2011, offer "a high potential" for improvements to both the project's capital cost and operating costs, the firm said.

In addition, the results reveal a "significantly improved leach performance" of the beneficiated ores, an outcome that was unexpected. The beneficaition through low energy scrubbing and water screening is what offers the potential to significantly reduce both the operating and capital costs, the company said.

The results show a significant upgrade in ore head grade with up to a two times nickel grade improvement from around 1% to around 2%. There is also strong potential to reduce the throughput capacity of the process plant to achieve the equivalent metal output and strong potential for a reduction in reagent consumption required to secure optimum metal output.

African Eagle has now started further test work which is expected to be completed by the year end, with pilot tesk work on the already drilled bulk sample due to begin in early 2013.

In addition, the company is performing an in-depth review and detailed analysis of transport infrastructure with a particular focus on rail systems in Tanzania, and elsewhere within the East African community.

African Eagle's Chief Executive Officer, Trevor Moss, said: "We are very excited about these metallurgical results which exceed our expectations in all aspects. They confirm the unusual and positive nature of the Dutwa mineralisation and demonstrate both the necessity and benefits of doing extensive and detailed metallurgical test work at this stage of the feasibility study.

"The potential of beneficiating the FeSi ore was highlighted in the NHM report but these results both exceed our expectations and extend them to highlight positive leach performance that was not previously identified. Beneficiation prior to processing on a commercial scale will significantly reduce the amount of ore we need to process through the hydrometallurgical plant by greater than 50%, whilst almost doubling the nickel head grade with the potential for this to approach 2% for a significant period of the life of the operation.

"The improved leach behaviour of the beneficiated ore results in a smaller plant, which requires less acid and reagents while maintaining metal output. This has the potential to significantly improve the overall project economics by reducing both the capital expenditure and the operating costs."

The share price jumped 17.39% to 3.38p by 10:08.

NR

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