Mark Parker, MD of African Eagle
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African Eagle to swoop on JSE
Allan Seccombe
Posted: Thu, 16 Aug 2007

[miningmx.com] -- EXPLORATION COMPANY African Eagle Resources is coming to Johannesburg to raise funds it will need over the next three years to develop two copper and gold projects and potential mergers and acquisitions, says MD Mark Parker.

“We’d certainly like to get access to the pool of capital in South Africa and the depth of understanding of our industry here,” says Parker, adding that African Eagle has talked to the JSE, brokers and banks in South Africa.

African Eagle has a portfolio of up to 40 exploration targets in Zambia, Tanzania and Mozambique. Of those, two are at the pre-feasibility study stage. It’s those that Parker sees generating cash for the company in three years.

like to get access to the pool of capital
At Mkushi, in Zambia, there’s a JORC compliant resource of 80,000 tonnes of contained copper and 370,000 tonnes of potential copper. Interestingly, the project lies to the south and outside the Copperbelt, where it has two other projects. African Eagle acquired five Zambian projects from an unlisted Australian junior.

“It was a counter-cyclical acquisition made in 2002 when nobody was interested in copper. We got them for a very good price,” Parker says.

Four of the five original projects remain in the company and two new ones have been added.

“We’re confident of a significant discovery being made in Zambia outside the Copperbelt with the use of innovative technology,” says Chris Davies, African Eagle’s operations director.

African Eagle has in its Zambia portfolio the Eagle Eye Copper project at Sasare, near the Mozambique border. The company is out to prove it’s a major iron oxide/copper/gold system and find a partner to share the project.

“We’d rather have half or one-third stakes in five or six operating mines than have a 100% stake of something that turns out to be a dog,” says Parker.

At Mkushi, Australia’s CGA Mining is funding the feasibility study through to the end of a bankable document to earn 51% of the project. The pre-feasibility study should be completed in third quarter 2007 and be bankable by second or third quarter 2008.

Then the partners will fund the development of a mine on a pro rata basis. Preliminary thinking is for a mine producing 150,000 tonnes/year of copper.

At the 100% owned, 520,000 oz Miyabi gold project in Tanzania, LSE-listed Randgold Resources will earn into the project by funding a pre-feasibility study. Randgold has undertaken a drilling programme this year that, if it proves satisfactory, will generate a pre-feasibility study to earn 51% of the project.

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African Eagle and Mark Bristow’s Randgold will then jointly fund a bankable study and mine.

“Miyabi – at 500,000 oz – is probably too small. But we’re confident of getting to one million ounces or more because there are a lot of structures that still need to be drilled, or where there are only a few drill holes and further work is needed,” Parker says.

The second tier of projects within African Eagle are Ndola, on the Copperbelt, Lunga, a copper project south-west of Ndola and outside the Copperbelt, as well as the Dutwa gold prospect in Tanzania. “We like Lunga, which, despite being an early stage project, could develop very quickly,” says Parker.

The Ndola project, which Phelps Dodge is funding, has the Bwana Mkubwa mine as a neighbour. The project is in the right spot to stand a better than even chance of becoming a mine.

African Eagle is likely to come to the market for funds within the next three years, after which Mkushi and Miyabi will most likely be generating cash for it.

“In the intervening three years we’ll need to raise capital – partly for our equity component of the mine development of those projects, partly for general working capital and exploration and partly for any merger and acquisition activity we undertake,” Parker says.