JOHANNESBURG (miningweekly.com) – JSE-listed African Eagle has moved to sell part or all of its Tanzania-based Dutwa nickel assets after failing to secure a strategic partner for further development.
This followed African Eagle’s suspension of project activities, including the completion of the bankable feasibility study (BFS), at Dutwa, in the first quarter of this year, to preserve the group’s cash position, as well as maintain its other nickel licences, while searching for a partner.
Funding was cut off to Tanzanian subsidiary and Dutwa’s main operating entity, Red Hill Nickel.
The potential strategic partner was meant to fund the remainder of the BFS and underwrite the eventual project development financing arrangements in return for the majority position, said chairperson Chris Pointon.
The company still had to undertake large-scale continuous pilot plant testwork, a detailed engineering outline for capital and operating cost estimates and further development of commercial contract negotiations for key services, including logistics and major equipment items, to complete the BFS.
However, current global challenges in the nickel industry and commodities, generally, had hampered partner uptake, despite Dutwa being deemed “a strong and competitive nickel project”, Pointon noted.
The testwork that had been completed had improved the overall viability of Dutwa and defined an opportunity for potential sulphides hosting nickel and platinum-group elements below the laterite resource.
The BFS had derisked many key areas, including metallurgy, logistics, reagent supply, and social and environmental factors.
“These are challenging times, however, and there can be no guarantee that any value can be achieved for these assets,” warned Pointon.
“The outcome remains uncertain in the absence of firm offers for the company’s Tanzanian assets, and [the] directors are unable to estimate with any certainty whether assets will be sold as a whole or in part, the timing of any sale, or to quantify the proceeds that may be receivable,” he added.
Failure to sell the assets might result in the write-down of the assets and the inclusion of further liabilities.