Melissa Sturgess, CEO, Dwyka

Dwyka poised to make an acquisition

Allan Seccombe | Thu, 30 Apr 2009 12:02

[miningmx.com] -- DWYKA Resources, which is exploring a nickel deposit in Burundi and a gold tenement in Swaziland, is busy on two due diligence studies and expects to make an announcement on an acquisition soon.

The board of ASX and AIM-traded Dwyka board has drawn up a short list of project acquisition opportunities available to the company.

“Management are performing report due diligence studies on two acquisition projects. We hope to be able to make an announcement regarding a project acquisition in the near future,” CEO Melissa Sturgess said in a quarterly report.

The acqusition will be in Africa and is likely to be in the commodities Dwyka is already working in, namely nickel and gold, she told Miningmx, declining to give any further details.

"We're moving quite quickly and I'm hoping the announcement is going to be in the next few weeks," she said. "There'll be no capital raising. We'll able to fund it all out of our current reserve."

Dwyka has cash of A$14.5m as at end-March 2009. It expects to spend A$400,000 during the June quarter on exploration work.

Sturgess declined to say whether there would also be an equity component to the transaction or if Dwyka would be acquiring just a project or another company.

"Our preference is to spend cash in the ground on project work, but beyond that I wouldn't want to be more specific," she said. "Our game plan is for something that is in production or close to production."

Dwyka's shares fell 2.17% on AIM to 5.6 pence.

Dwyka this year became the 100% owner of the Muremera nickel prospect in Burundi after its partner BHP Billiton decided not to continue with the early-stage exploration play and hand it over entirely to Dwyka.

The Muremera project neighbours the Kabanga project across the border in Tanzania. Xstrata and Barrick Gold jointly own Kabanga, which has an indicated resource of 23 million tonnes at 2.64% nickel and an inferred resource of 28 million tonnes at 2.7% nickel.

Dwyka will focus exploration work due to start in May on three high priority targets that lie 10 km away from Kabanga.

A drill rig will be mobilised at the end of next week and be on-site by 11 May.

Dwyka has spent $750,000 in total drilling a greenstone gold deposit in Swaziland, a tiny landlocked country surrounded by South Africa and Mozambique.

The greenstone deposit is adjacent to AIM-traded and JSE-listed Pan African Resources’ operating mines in the Barberton area of South Africa.

Dwyka has a right to increase its stake from 50% to 70% in the SwaziGold project but has yet to commit to that stake because it is developing a gold strategy around the asset. It has pushed back the earn-in schedule with Swazi Gold Ventures to end-June this year to give it space.

“Our objective is to drill up one million ounces by the end of the year, which we can then put together with other gold projects in the region and Africa, where we are looking at other projects,” Sturgess told Miningmx in mid-March.

“By June we will have developed our strategy on gold. We’ll have defined whether we’ll put this into production ourselves or put a few other projects together,” Sturgess said at the time, adding the Swazi assets could be in production by mid-2010.

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