African Eagle Resources

HOLD

11/01/2011 Robert Tyerman

A hefty resource upgrade at Tanzania's Dutwa nickel project brings fresh encouragement to former mining dog African Eagle Resources. The AIM-quoted company has shifted 430,000 tonnes of nickel at a grade of 0.93% from the 'inferred' to the more confident 'indicated' resource category at Dutwa's Wamangola deposit, representing 47% of Dutwa's total nickel resource of 917,000 tonnes at the same grade.

African Eagle, chaired by former City mining specialist Euan Worthington and steered by managing director Mark Parker, is conducting a pre-feasibility study into Dutwa, which also contains an estimated 28,000 tonnes of cobalt. Parker points out the new 'indicated' resource can be used to derive a probable mining reserve for the project in this study, which should be completed by the third quarter of this year.

Shares in African Eagle have in the past suffered from the company's propensity for changing its focus, in terms both of minerals and geography. Now, Parker and his team seem to have the bit between their teeth at Dutwa.

Highlighted by Growth Company Investor at 4.13p last June, the shares now trade at 12.75p. Hold on for further progress.        

Tags: AIM market, Mining, Nickel

Sector: Mining

Companies: African Eagle Resources

Market cap: £49m

PE Forecast: n/a

Share price: 12.75p