Dwyka goes for nickel

25/01/2007 Robert Tyerman

Dwyka Diamonds is tapping the City for support for a potentially lucrative nickel project at Muremera in Burundi, central Africa.

Previously battle-scarred Dwyka is an Australian company floated on AIM at 40p in 2001 by Evolution as an ill-starred diamond tailings play in South Africa's Kimberley region. After many setbacks, the company is still developing diamond projects in the Republic under its well-connected Australian chairman Melissa Sturgess, who says there is an eventual annual production target of 100,000 carats. The company’s focus has shifted to Muremera in the formerly strife-torn central African state of Burundi.

Dwyka has bought 100 per cent of the Muremera project for the equivalent of £2.5 million in shares. Sturgess says the United Nations Development Programme project recently identified ‘five big anomalies’, potentially bearing nickel, at Muremera.

She adds that Muremera is only 2 km from Kabanga across the border in Tanzania, which is claimed as the world’s largest undeveloped nickel sulphide deposit, with an estimated 26 million tonnes of ore at 2.6 per cent nickel, with some copper and cobalt too. Swiss-based mining giant Xstrata is spending £70 million to earn a half-share in Kabanga and Dwyka hopes Muremera is part of the same massive ore body.

She says Burundi is actively encouraging foreign investment in its resources sector as it rebuilds from the ravages of its civil war. It is claimed that the local infrastructure is in much better shape than might be feared.

At 16p, the shares offer significant speculative potential.