African Eagle winding up Dutwa project, disposing of gold assets
Unable to find further funding, African Eagle Resources (AIM: AFE) will just be spending money on maintenance costs for its main nickel asset, the Dutwa project in Tanzania.
"[It] has become apparent to the directors of the company (the "Directors") that at the current time the investment appetite for the development of nickel laterite projects is limited and the Directors have been unable to identify any source of funding for the Company and its subsidiary undertakings (the "Group") pursuant to these discussions," wrote the company in a news release.
The company will begin winding up Red Hill Nickel, the project company established for the development of Dutwa but does not hold licenses.
Asset disposals are being sought to provide funding and senior management departures are expected to reduce operating costs, says Edison Investment Research. The equity research firm says the company has cash of £1.15m, which is expected to provide working capital for six months.
To further control costs, the company funding made available to the company's remaining subsidiaries will be considered by the African Eagle's directors on a case by case basis.
Discovered by African Eagle in 2008, the Dutwa nickel laterite project was at the feasibility study stage.
Nickel LME price is at a current level of 15672.95, down from 16724.93 last month and down from 17939.79 one year ago. This is a change of -6.29% from last month and -12.64% from one year ago.