[miningmx.com] — THE share price of junior explorer African Eagle Resources (African Eagle) has nearly doubled on the London Stock Exchange over the past month to 11.75p (about 126c).
African Eagle is also listed on the JSE where the share price has lagged movements in London, although it jumped 17% to 111c during trading on Monday morning.
The share price strength follows company announcements showing that two UK financial institutions have markedly raised their stakes in African Eagle.
These are Anglo Pacific – which now owns 4.49% of the company – and MWB Limited, which has bought a 7.86% stake. On the other side of the coin, JP Morgan Asset Management has dropped its stake to below 5% from 7.86% previously.
African Eagle is carrying out a pre-feasibility study on its Dutwa nickel project in northern Tanzania. MD Mark Parker reckons this is a “world class project that would sit comfortably in the portfolio of a major mining company”.
During a site visit by financial media and analysts to Dutwa in late October, Parker readily admitted the project had a way to go before investment institutions and possible strategic partners could be convinced that African Eagle was correct in its assessment.
He said at the time: “We need to gain better recognition in the market. Everybody has heard such hugely optimistic stories from junior explorers before.”
The recent strength in the share – which has nearly trebled from levels around 4p as recently as September – appears to indicate that the market is coming around.
Drilling results so far have put the inferred resource at Dutwa at 100 million tonnes (mt) of ore grading 1% nickel, which amounts to 1mt of contained nickel. That’s worth about $25bn at a nickel price of $11/pound.
The pre-feasibility study should be completed by the third quarter of 2011, with a full feasibility study due to be completed by the third quarter of 2012.
Parker said in October that African Eagle was keen to bring a strategic partner on board to help Dutwa.
He said at the time: “We’ve been talking to potential strategic partners and investors, but it’s difficult because we are not in a good position at this stage.
“We need to take more perceived risk out of the project and also get our share price up.’
Parker also said African Eagle intended spinning off its other major exploration interests – consisting of copper projects in Zambia and uranium in Mozambique – to focus on the development of Dutwa.
Since then, African Eagle has sold its uranium interests to a private Australian company for shares and cash.
