Sutton continues push at Kabanga nickel project

Sutton Resources (STT-V) and joint-venture partner Anglo American of South Africa are aggressively working to complete an initial mine feasibility review of their Kabanga nickel project in western Tanzania by the end of the year.

Anglo American, the operator, is currently conducting exploration drilling and geotechnical engineering work at Kabanga. The company has four diamond drill rigs spinning on the property and is targeting the existing nickel-cobalt sulphide deposits with both infill and stepout holes.

Prior to the current drill program, the high-grade portion of the Kabanga deposits held an aggregate preliminary reserve of 12.7 million tonnes grading 2.07% nickel, 0.3% copper and 0.16% cobalt.

Drilling continues to delineate the shape of the deposits, and a new resource calculation is expected after the completion of the current drill campaign.

Assay results (all of which represent estimated true widths) from core recently pulled from the North zone include:

* 18.3 metres (from 425 metres below surface) grading 2.58% nickel 0.33% copper and 0.21% cobalt in Hole 97-1

* 3.9 metres (from 600 metres) grading 2.8% nickel, 0.33% copper and 0.22% cobalt, followed by a 21.4-metre interval grading 1.24% nickel, 0.16% copper and 0.1% nickel, in hole 97-2. Farther down, the hole hit 1.93% nickel, 0.38% copper and 0.15% cobalt over 5.4 metres and, finally, an 18-metre intercept grading 2.4% nickel, 0.33% copper and 0.2% cobalt.

* 16.4 metres (from 510 metres) grading 2.69% nickel, 0.34% copper and 0.16% cobalt in hole 97-8

* 5.4 metres (from 400 metres) grading 1.98% nickel, 0.17% copper and 0.12% cobalt in hole 97-9

* 27.5 metres (from 150 metres) grading 3.04% nickel, 0.37% copper and 0.22% cobalt in hole 97-11

* 3.8 metres (from 260 metres) grading 2.95% nickel, 0.20% copper and 0.18% cobalt in hole 98-15

* 12 metres grading 2.73% nickel, 0.37% copper and 0.23% cobalt in hole 98-16.

Holes 97-2, 97-8, 97-9, 98-15 and 98-16 represent stepout holes which are outside of the original boundaries of the North zone.

Anglo American believes that the Kabanga deposits are capable of yielding 15,000 tonnes per year of nickel, plus associated cobalt and copper. The last estimate of the capital cost of the mine and its related facilities was US$135 million.

Sutton Resources holds a 40% interest in the project and the balance is held by Anglo American.