Shares in AIM quoted mining group African Eagle Resources (LON:AFE) rose by 4% to 12.75p this morning on news of a significant resource upgrade at its flagship Dutwa nickel project in Tanzania. Analysis by independent geological contractors the Snowden Group, has shifted more than three quarters of the Wamangola resource (the larger of the two nickel deposits that make up the Dutwa project) from the inferred category into the indicated category under the Australian-based industry-standard JORC code. This is important because indicated resources can be used to derive probable mining reserves for the a pre-feasibility study that is already underway at Dutwa and due for completion in the third quarter of 2011.

African Eagle said that 47% of the total Dutwa resource was now in the JORC indicated category and more would be upgraded after further drilling at Ngasamo, the second of the project’s two main deposits, later in the year.

The company described the transfer of resources from inferred to indicated as “a leap forward for the project, with increased confidence in the continuity of the orebody”. Of the total 98.6m tonne resource, 46.2m tonnes at 0.93% nickel and 0.03% cobalt is now in the JORC indicated category. The latest analysis has also increased the grade of the tonnage from 0.90% nickel to 0.93%.

African Eagle’s managing director, Mark Parker, said: “This resource upgrade is another significant milestone in our Dutwa feasibility study. Snowden has converted a large portion of the Wamangola resource directly to the indicated category and we will only need to do infill drilling in areas of structural complexity such as fault zones and areas around cross-cutting dykes. Infill and step-out drilling to delineate the smaller Ngasamo deposit fully is planned in early 2011 and we will then ask Snowden to upgrade from inferred to indicated. Meanwhile work for the pre-feasibility study is progressing well and we have shipped a large portion of the bulk ore samples from both the Wamangola and Ngasamo deposits to Perth, WA for metallurgical tests.”

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