African Eagle Resources plc has signed a Letter of Intent for an option and joint venture with SAFINA a.s. of the Czech Republic and its subsidiary Tanzania Precious Metals Refinery Limited (TPMRL), over the Ngasamo licence, adjacent to the Dutwa nickel laterite project in Tanzania.

Under the agreement, African Eagle can earn an interest of up to 75% in Ngasamo by carrying out exploration and evaluation work, leading up to a feasibility study.  The licence area contains a nickel laterite which appears very similar to the Dutwa deposit.

Mark Parker, Managing Director of African Eagle Resources plc comments: “This is a very significant agreement for African Eagle, as Ngasamo has the potential to increase the global resource at Dutwa to 50 million tonnes, from the current 31 million tonnes at 1.1% nickel. Ngasamo Hill lies just 5km west of the Dutwa deposit and has very similar geology, with a thick laterite blanket overlying identical ultramafic rocks. Our geologists believe that the Ngasamo deposit is of the order of 15 to 20 million tonnes, but obviously, drilling and metallurgical tests will be needed to confirm the size, grade and compatibility
with the Dutwa ore.

“Our partner TPMRL is the Tanzanian subsidiary of SAFINA Group, a substantial metals and chemicals group from the Czech Republic.  SAFINA is keen to become a fully contributing partner in the nickel project, and could bring significant capabilities to the partnership.”

Agreement details

Under the agreement, African Eagle will complete an initial programme of surface surveys, including sampling of old prospectors` pits and trenches.  Subject to the results, African Eagle will commence a formal earn-in agreement, acquiring a 35% interest by managing and co-funding a drilling programme to define a JORC inferred resource, and then a 50% interest by advancing this to a JORC indicated resource. 

Thereafter, the Ngasamo laterite resource would be included in the Bankable Feasibility Study of the Dutwa nickel-cobalt project. If, subject to agreement, African Eagle solely funds the cost of this development, then its interest in Ngasamo would increase to 75%, whilst its existing 100% interest in Dutwa remains unchanged. Once the Feasibility Study of the combined Dutwa and Ngasamo Project has been completed, TPMRL will become a partner in the combined project, with the two parties` equity percentages calculated from the relative attributable values of the project held by each.

About SAFINA Group 

SAFINA`s history reaches back to 1860 when a company named G. A. Scheid`sche Affinerie Vienna was founded in Austria. In 1920, this company established a subsidiary in Prague, processing gold and silver scrap and selling semi-finished precious metals products for jewellery and dental purposes. After World War II, Sheid`s refinery was put under the control of Poibram Ore Mines, together with ten other refineries processing precious metal. This state company implemented production of platinum catalysts and laboratory instruments, electrical contacts, copper foils, electrolysis of silver and other technologies.         
A new independent state-owned company named SAFINA was established in 1950. The main activities of this company were refining, assaying and processing precious and noble metals, electroplating, production of metal powder, production of laboratory equipment and trading in precious metals. SAFINA was privatised in 1992 as SAFINA, a.s.

Today, SAFINA, a.s. has a dominant position in precious metals processing, not only in the Czech Republic, but within Europe. The company has become a business offering manufacturing and services across nine independent product lines.  In early 2007, the STENA SAFINA joint-venture was established with the Stena Metall Group, the Nordic leader in recycling and environmental services with operations at 230 locations in nine European countries, to recycle electronics waste according to the European WEEE directive (Waste of Electrical and Electronic Equipment).

In 2005, the SAFINA Group, together with her Tanzania partners, established Tanzania Precious Metals Refinery Limited (TPMRL), to provide gold refining services to the large and small-scale mines in Tanzania. SAFINA Group holds 51% of TPMRL, with Tanzanian partners holding the balance. TPMRL has acquired a site
in Mwanza to construct a gold refining operation. In June 2006, TPMRL acquired the mineral rights over the Ngasamo area for its gold potential.