Significant Nickel Deposit

Geology

Dutwa lies in the Kilimafedha belt (Swahili for "money hills") of the Lake Victoria Goldfield. Greenstones and granites underlie the area. The greenstones, of Archaean Nyanzian age, are mostly metamorphosed volcanic and sedimentary rocks, with some banded iron formation in the east. Several large ultramafic bodies intrude the greenstones, the nickel laterites form a blanket up to 80m thick on top of these.

To investigate the main nickel anomaly, African Eagle undertook trial drilling in June 2008. The results were very encouraging and a 139 hole reverse circulation (RC) drilling programme was completed to delineate the resource. The Company also undertook a 10 hole diamond drill programme to obtain core samples for metallurgical testing and density measurements. From the results of this drilling independent consultants SRK Consulting (UK) Ltd estimated a maiden JORC inferred mineral resource in November 2008.

Resource

The Dutwa nickel oxide project consists of two hilltop deposits, Wamangola and Ngasamo, which form thick residual lateritic caps on the tops of low ridges 7km apart.

Combined the two deposits have a JORC Indicated and Inferred resource of around 100Mt at circa 1% nickel. 94% is in the Indicated category with the ferruginous siliceous ore ("FeSi") comprising 70% of the total resource. As announced on 12 September 2012, the Wamangola FeSi ore is strongly amenable to beneficiation and demonstrates improved leach characteristics compared to run-of-mine ore.

Table 1: JORC Mineral Resource statement, as at September 2012

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Images


Drilling at Dutwa site


Perspective view of Ngasamo hill showing the base of mineralisation


Westward view of the ore-body at Wamangola Hill with vertical RC drill holes

JORC (2004) Resource category Deposit Lithology Tonnes (Mt) Ni (%) Co (%) SiO2 (%) Al2O3 (%) Fe2O3 (%) MgO (%)
Indicated Ngasamo Ferruginous-siliceous 30.5 0.87 0.035 71.96 1.85 12.95 6.23
Transitional 10.9 0.97 0.028 52.35 1.19 14.29 17.74
Saprock 4.70 1.01 0.026 37.71 0.33 7.81 33.31
Sub-total 46.1 0.91 0.032 63.84 1.54 12.74 11.70
Wamangola Ferruginous-siliceous 42.0 0.93 0.027 72.30 2.83 12.33 3.90
Transitional 13.2 0.99 0.019 51.61 1.77 11.31 19.20
Sub-total 55.2 0.94 0.025 67.36 2.58 12.08 7.55
Total Indicated 101 0.93 0.028 65.76 2.11 12.38 9.44
Inferred Ngasamo Ferruginous-siliceous 0.70 0.99 0.027 74.32 1.67 13.29 4.84
Transitional 0.41 0.91 0.020 50.25 1.85 12.24 18.60
Saprock 1.62 0.74 0.019 39.58 0.32 8.62 31.87
Sub-total 2.73 0.83 0.021 50.04 0.89 10.35 22.99
Wamangola Ferruginous-siliceous 1.48 0.72 0.031 73.23 2.81 11.96 4.14
Transitional 0.37 0.66 0.018 52.21 2.48 12.08 19.40
Saprock 0.84 1.00 0.016 36.07 0.66 7.78 33.54
Sub-total 2.68 0.80 0.025 58.80 2.10 10.67 15.37
Total Inferred 5.41 0.81 0.023 54.39 1.49 10.51 19.21
Grand Total 107 0.92 0.028 65.18 2.07 12.29 9.94

* Source Snowden

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