African Eagle Resources Regulatory News (AFE)

28 Sep 2007 07:01

African Eagle Resources PLC28 September 2007 African Eagle Chairman's Review of Progress African Eagle Resources plc ("African Eagle" or "the Company"; Ticker: AIM: AFE,AltX: AEA) today outlines progress made so far in 2007. The financial resultsfor the half year ended 30 June 2007 have been released in a separate RNS. Highlights • £7.4M raised on AltX listing in Johannesburg in August • Progress to pre-feasibility at Mkushi and delineation of new high-grade L-Zone • Partnership signed with Randgold on Miyabi and drilling already well advanced • Ndola Copperbelt project advancing positively in partnership with Phelps Dodge • Phase-1 drilling completed to test Kampumba (Tandalwe Hill) oxide copper zone • Formal resource estimate at Eagle Eye (Mweze) and new drill targets identified • Drilling to commence shortly at Dutwa, Igurubi and new Rupa projects in Tanzania • Uranium division established to drive forward significant project assets • Alliance with Troll Mining on uranium, copper and gold projects in southern Tanzania • Mokambo South licence granted in the Zambian Copperbelt Statement by John Park, African Eagle's Chairman: Dear shareholder, This has been an active and successful period for your Company, culminating inour share listing on the Johannesburg AltX exchange at the end of August. The Company's strategy of focusing on making discoveries, maintaining a diverseexploration portfolio and signing up partners to ensure timely development ofour advanced projects, has proved to be extremely successful. African Eagle and its partners have made excellent progress on many of ourprojects and I believe that we are well on track to our goal of holdingsignificant interests in several revenue-generating mines within three to fiveyears. Corporate The Company's ground-breaking secondary listing of its shares on theJohannesburg AltX exchange with a R88 million placing to South Africaninvestors, together with a further £1.1 million raised in the UK, must rate as aremarkable corporate success. We are proud to have notched up some important AltX firsts: • we are the first AIM-listed resource company without South African assets or previous South African connections to list on AltX; • we are the first AIM company to raise capital through a secondary AltX listing; and • this is the biggest capital-raising on AltX to date by an exploration and development company. The South African market's understanding of mining and Africa together with itscurrent appetite for exploration, coupled with the relative ease of meetingAltX's listing requirements, ranked high amongst African Eagle's reasons forchoosing AltX over other markets. African Eagle now has 22% of its shares on its South African register and webelieve that altogether, about 30% of its shares are South African managed. Thecapital we raised means that African Eagle's exploration programme will be fullyfunded for at least the next 24 months, and together with JV partners' fundingcommitments, the Company will have enough capital to bring most of its keyprojects to the feasibility stage. Additional good news for our UK based private investors is that Her Majesty'sRevenue and Customs have confirmed to us that they now do not consider AltX tobe a "recognised exchange" for UK tax purposes. This ruling means that theCompany's dual listing does not disturb the beneficial tax status granted toAIM-listed shares in the UK. Strategy The period has seen the further development of the Company's strategy andbusiness model, namely to continue to focus on exploration, making discoveriesand maintaining a diverse exploration portfolio, while signing up partners withthe engineering and mining skills and capital to ensure timely development ofour advanced projects. The signature in May of our deal bringing Randgold Resources into the MiyabiGold Project is a major step along this path. Randgold has a record ofexploration and development success, notably the Morila and Yalea gold mines inMali, and Tongon in Cote d'Ivoire. Randgold began work at Miyabi almost as soonas the agreement was signed and it has now almost completed its phase-1 drillingprogramme. The Company's establishment of a Uranium Division was another significant stepduring the period. There are 8 projects which have uranium potential, withtargets including calcrete and playa type deposits in Neogene to recentsediments, sandstone hosted deposits of Karoo and Cretaceous ages and veindeposits in crystalline basement rocks. The portfolio includes 11 licences and8 applications, with a total area of some 13,000 square kilometres. There are listed uranium exploration companies with far fewer and less promisingassets than these. In order to optimise value to shareholders, the Company hasbeen investigating a number of alternative ways to develop these uraniumlicences, including exploring them in-house, joint venturing with a uraniumspecialist company, or developing them in a new listed subsidiary. Our strategic alliance with a Tanzanian company Troll Mining, signed in May,gives African Eagle a majority interest in a portfolio of promising uranium,gold and copper prospects. In Mozambique, we established a local company for our exploration operations. Wealso signed a farm-out agreement with Pan African Mining Corp for theexploration of the Fingoe area of northwest Mozambique. Research Note A Research Note on the Company was recently written by Loeb Aron & Company Ltd,and we have made this available for download from our web site. The Note concludes that "African Eagle combines the potential of grassrootsexploration plays with a number of less speculative resource definition anddevelopment projects being carried forward by partners. A 'by parts' marketvaluation, carried out on a reasonably conservative basis, suggests a presentday market value of 24.7p per share. Our 12-month target, based on outcomes ofreasonably high probability, is 30.7p per share. African Eagle is now wellfunded, active and likely to be increasingly news generative". The Note supports the Company's contention that it is now in a very strongposition, with several advanced projects progressing towards productiondecisions, resting on a firm foundation of earlier stage projects. The analystsvindicate African Eagle's strategy of signing up industry partners to bringprojects into production as quickly as possible. The Note may be viewed at www.africaneagle.co.uk/investors/LoebNoteSept07.pdf Project Updates Mkushi Mkushi in Zambia is our nearest to production project and we hope to give thegreen light to development by the end of next year. The high resolution airbornegeophysical survey carried out in Q1 showed geological and structural featuresin extraordinary detail and the soil geochemical survey revealed unexpected aswell as predicted copper targets. Follow-up ground geophysical and additionalgeochemical surveys are underway to investigate these targets. Drilling by our development partner CGA Mining revealed a new mineralisedstructure, now known as L-Zone, with intercepts up to 37m at 2.4% copper. CGAis on track to produce a pre-feasibilty study in the coming weeks and is likelyto announce a significant resource update, having increased the total drillingfrom 10,000m to more than 25,000m since entering the joint venture in July 2006.The metallurgical, environmental and mine planning work for thepre-feasibility study is also well advanced. Ndola The systematic exploration of our 450km2 Ndola licence in Zambia is alsoprogressing very well. Again, the high resolution airborne geophysical surveyand the soil geochemical survey have given us important geological andstructural insights, and with our partner Phelps Dodge (now part ofFreeport-McMoRan) we have identified several promising copper targets. Drillingat Msindu, the first of these, intercepted significant copper mineralisation.Geophysical electromagnetic surveys are underway to help elucidate the complexstructure in this area. Assay and drill results are currently being analysed andit is hoped these will be received shortly. Miyabi After Mkushi, Miyabi in Tanzania is our next most advanced project. As notedabove, our development partners on the Miyabi Gold Project, Randgold Resources,mobilised a diamond drill rig very soon after signing the earn-in agreement inearly May, and the phase one programme is now almost complete. This drilling wasaimed principally at helping Randgold's geologists to understand the shear zonesand geological structures at Miyabi. Randgold has until May 2008 to elect tofund and perform the pre-feasibility to earn a 50% interest in the project. TheCompany is expecting the current gold resource of just over half a millionounces to increase, as there are many anomalies still to be drilled. Eagle Eye At our Eagle Eye project in Zambia the soil geochemical grid has been extendedto cover almost all of the prospective area of the iron-oxide copper goldsystem. As part of its Competent Person's Report for our AltX listing, SRKConsulting (UK) Limited carried out a formal resource estimate on the Mwezearea. SRK's JORC indicated resource estimate, based on the 10 holes drilledwhich have intersected the Mweze mineralised zone to date, was 1.4Mt at 1.2%copper. More important than the estimate itself was the insights which the3-dimensional modelling provided into the structural and geological controls onthe mineralisation. These insights will be used to site new drill holes laterthis year. We have also identified new drill targets from our thorough review ofpast data, and a trenching programme is underway to fine-tune these. Other exploration activities Tanzania Positive progress has been made with our holdings in the Lake VictoriaGoldfield, where results from the Dutwa and Rupa projects have been especiallyencouraging. We have started exploration of the Troll licences in southwestTanzania and early results are promising. Zambia We have conducted a drilling programme at Tandalwe Hill in the Kampumba projectarea, together with a complete soil geochemistry survey of the licence. Thedrill will now move to test targets in the Lunga licence. Most recently, the Company was granted the Mokambo South licence, an area of theZambian Copperbelt lying on the eastern limb of the Mufulira Syncline andcontaining a significant mineralised zone over which drilling was carried out inthe 1950s and 1970s. The Company will explore this area and the adjacentMokambo North licence in partnership with Copperbelt Minerals Limited. Mozambique We completed the regolith sampling programme at Namama (Majele) and we expectthe multi-element assay results very soon. We made application for 11 new exploration licences covering areas prospectivefor gold, silver, nickel, uranium and other commodities. Conclusion I believe that African Eagle has adopted the right strategy, combining thecomfort of portfolio diversity with the ability to advance projects as fast aspossible towards production. We have the right people looking for the rightcommodities in the right geological and political settings. With our partners'funding of advanced projects to feasibility we can use the cash in the bank tofund our next two years' exploration programmes. John ParkChairmanAfrican Eagle Resources plc 28 September 2007 For further information, see the Company's web site www.africaneagle.co.uk orcontact one of the following: Mark ParkerManaging Director+44 20 7248 6059+44 77 5640 6899 Nicola MarrinSeymour Pierce+44 20 7107 8000 Ed Portman / Leesa PetersConduit PR, London+44 20 7429 6607 James DuncanRussell & Associates, Johannesburg+ 27 11 8803924 / +27 82 8928052 About African Eagle African Eagle is a diversified mineral exploration and development companyoperating in eastern and central Africa. The Company's principal advancedprojects are the Mkushi Copper Mines project in Zambia and the Miyabi goldproject in Tanzania, which are being fast-tracked towards production. TheCompany also holds a large well-balanced portfolio of promising earlier stagegold and base metal projects, including the Ndola copper project and the EagleEye iron-oxide copper gold project. Zambia, Tanzania and Mozambique, the sites of African Eagle's projects, are allcountries which have highly prospective geology, relatively low above groundrisks and track records of successful major investments in the metals andminerals industries. African Eagle specialises in project generation and exploration. To take itsdiscoveries into production, it seeks to sign up industry partners with recordsof successful mine development. These joint ventures and, in time, the revenuefrom advanced projects, will finance future exploration and new discoveries. Qualified Person Information in this report relating to exploration results is based on datareviewed by Mr Christopher Davies BSc, MSc, DIC, FSEG, FAusIMM, OperationsDirector for African Eagle, who is a Fellow of the Australasian Institute ofMining and Metallurgy, has more than 26 years relevant experience in mineralexploration and is a Qualified Person under AIM rules. Mr Davies consents to theinclusion of the information in the form and context in which it appears. Technical terms A glossary of technical terms used by African Eagle in this announcement andother published material may be found at www.africaneagle.co.uk/african-eagle-projects-glossary.html This information is provided by RNS The company news service from the London Stock Exchange