25 May 2012

African Eagle Resources

REDUCE

21/01/2011 Robert Tyerman

Investors have oversubscribed for African Eagle (AFE)'s £3.7m placing to fund work on its promising Dutwa nickel project in Tanzania. The AIM-quoted company will receive £3.25m after expenses from the placing at 15.5p, handled by brokers Seymour Pierce and Ocean Equities, and says it intends to spend most of it towards a pre-feasibility study and then a bankable feasibity study on Dutwa, where it recently upped 'indicated resources' at the Wamangola deposit by 430,000 tonnes to 917,000 tonnes.

Chairman Euan Worthington reports 'continuing good progress' on Dutwa and indicates the pre-feasibility study should be complete in the third quarter of this year. He says African Eagle has clinched 'valuable deals' on some of the gold and uranium assets on which it was previously focused and has delegated chief operating officer Chris Davies to spin out the company's Zambian copper interests into a new vehicle, 'with a view to a listing or sale'.

Highlighted by Growth Company Investor at 4.13p in June, African Eagle shares now trade at 15.75p. Partial profit taking might be prudent, while keeping a fair chunk for further potential gains.

Tags: AIM market, Nickel, Placing

Sector: Mining

Companies: African Eagle Resources

Market cap: £61m

PE Forecast: n/a

Share price: 15.75p

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