African Eagle Resources Regulatory News (AFE)

31 Jul 2007 07:01

African Eagle Resources PLC31 July 2007 FURTHER POSITIVE DRILLING RESULTS FROM THE MKUSHI COPPER MINES PROJECT, ZAMBIA * Latest drill results continue to define high grades of copper over substantial widths * New L zone ore body defined * Pre-feasibility study on track for completion in Q3, 2007 African Eagle plc ("the Company"; Ticker "AFE") announces drill results and aprogress update from the Mkushi Copper Mines in central Zambia. Mineralisedintercepts included: 17m at 2.73% copper 15m at 2.45% copper 31m at 2.13% copper 40m at 0.95% copper 6m at 7.9% copper African Eagle's Managing Director Mark Parker comments "the pre-feasibilitystudy at Mkushi is on track for completion Q3,2007 and we look forward to theresults of the study which will include an updated resource statement. Thedrilling results continue to impress, in particular those from the newly definedL zone ore body". The Mkushi Copper Mines Project is a Joint Venture between CGA Mining Limited(CGA) and African Eagle Resources plc (African Eagle), through their respectiveZambian subsidiaries. CGA manages and funds the resource drilling andfeasibility operations while African Eagle manages a jointly funded regionalexploration programme. A full joint venture agreement between the parties wassigned in May 2007, supplanting an earlier heads of agreement. A Zambiancompany, Mkushi Copper Joint Venture Ltd, has been established to own andoperate the project. The latest results relate to drilling completed by CGA during the second quarter2007 as part of a resource drilling programme which will form the basis of apre-feasibility study (PFS) expected to be completed by end of September. Duringthe period, a total of 30 drill holes were completed for 6,485 metres, bringingthe total drilling at Mkushi to date to more than 25,000m The PFS will include a JORC-compliant resource calculation and a preliminaryestimate of mineable open pit reserves, a process flow sheet, a preliminary mineplan and a marketing assessment. Initial metallurgical test work has indicated95% recovery of the contained copper to a sulphide concentrate which contains nodeleterious elements. Based on the findings of the PFS, a further drillprogramme will be designed to ensure bankability of the final feasibility study. The new results show zones of high grade copper mineralisation over significantwidths at H zone, at the southern end of the Munshiwemba open pit, and at Lzone, a newly defined zone of mineralisation adjacent to H zone. The drilling atL zone indicates the presence of a large coherent ore body with high grademineralisation. Key intercepts are: Hole No Prospect From (m) Width (m) Copper %------- ---------- -------- -------- --------Diamond Drill holes MMU031 Munshiwemba 92 2 1.34MMU033 Munshiwemba 117 8 3.99and Munshiwemba 140 17 2.36MMU034 Munshiwemba 61 3 2.12MH053 H Zone 179 8 0.97MH056 H Zone 152 11 0.93MH061 H Zone 180 9 1.69And H Zone 210 7 1.03And H Zone 222 5 1.92MH062 H Zone 139 15 2.45MH060 L Zone 110 4 3.10MH060 L Zone 123 17 2.73MH060 L zone 162 4 2.90MH063 L Zone 128 10.5 2.02MH066 L Zone 130 6 7.90including L Zone 132 3 14.05 RC Pre-Collar Drill Holes--------------------------------------MH061 H Zone 75 25 1.79MH062 H Zone 33 21 1.68MH063 H Zone 26 40 0.95MH065 H Zone 31 31 2.13MMU025 Munshiwemba 63 8 2.11MC009 Coloquo 76 14 0.89MH014 Coloquo 58 11 1.02 While the H zone, L zone and southern Munshiwemba drilling yielded high gradesand significant thicknesses of mineralisation, it has proved difficult to defineeconomic mineralisation in the northern section of the Munshiwemba zone, northof a dolerite dyke which is thought to have influenced the form of themineralisation. Recent drilling (not yet assayed) has located mineralisation atleast 7m thick to the south of the dyke, however, suggesting the potential todefine an additional ore body in this area. The water is currently being pumpedfrom the flooded Munshiwemba pit to allow access for further rilling in thisarea. The pumping commenced on 28 June and the water level has already droppedby 3m, with complete dewatering expected to take 3 months. As part of the PFS, an Environmental Impact Assessment (EIA) and Mitigation Planwill be commissioned. On completion of the PFS and EIA, application will be madeto the Ministry of Mines in Lusaka for a Mining Licence over the total areacovered by project development. Initial discussions have been held with theregulatory authorities at the Ministry who have assured their complete supportfor the project development. Under its regional exploration programme, African Eagle has completed soilgeochemical sampling of the inner licence PL114 and submitted the samples toALS-Chemex in Johannesburg for multi-element assay. The survey will be extendedat coarser spacing to the outer licence PL290. African Eagle has also receivedan interpretation of the airborne geophysical survey completed in February 2007. John ParkChairmanAfrican Eagle Resources plc 26th July, 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 Ed Portman/ Leesa PetersConduit PR+44 20 7429 6607 / +44 (0) 7733 635 01 Qualified PersonInformation in this report relating to exploration results is based on datareviewed by Mr Christopher Davies BSc, MSc, DIC, FSEG, Operations Director forAfrican Eagle, who is a Fellow of the Australasian Institute of Mining andMetallurgy, has more than 26 years relevant experience in mineral explorationand is a Qualified Person under AIM rules. Mr Davies consents to the inclusionof the information in the form and context in which it appears. Technical termsA 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 About Mkushi Copper Mines African Eagle's most advanced project, Mkushi is located about 150km southeastof the Zambian Copperbelt. The Company's work, coupled with historical records,suggests that the deposits can be brought into production quickly and operatedprofitably, especially at current high copper prices. The Mkushi Copper Mines Project is a 51/49 Joint Venture between Seringa MiningLtd, a Zambian subsidiary of CGA Mining Limited, and Katanga Resources Limited,African Eagle's Zambian subsidiary. Seringa manages and funds the resourcedrilling and feasibility operations while Katanga manages a jointly-fundedregional exploration programme. A full joint venture agreement between theparties was signed in May 2007, supplanting an earlier heads of agreement. AZambian company, Mkushi Copper Joint Venture Ltd, has been established to ownand operate the project. The style of copper mineralisation at Mkushi is very different from that seen inthe Copperbelt, occurring in association with granitic intrusions within a majorshear zone cutting basement rocks considerably older than the Copperbelt rocks.Copper was discovered at Mkushi in the 1920s and mined by underground operationssporadically until the mid 1960s when an open pit mine was initiated atMunshiwemba. The pit reached a depth of 30m and yielded 2.2Mt of ore at anaverage grade of 1% copper before operations ceased in 1975, because of lowcopper prices and Zambia's programme of nationalisation. The sulphideconcentrate from the operation was sold to a smelter at Nkana in the Copperbelt.In 1990, the parastatal mining company ZCCM estimated that 30Mt of ore grading1.2% copper remained in the ground at Mkushi, with 350 000 tonnes of containedcopper. The project has many advantages. The metallurgy is straightforward and shouldallow excellent recoveries to a clean concentrate with no deleterious elements,at a relatively low capital cost. The area is a brownfield site well served bytransport and other infrastructure - there is a major power line and watersupply within the project area, a network of good gravel roads connecting to arailway and sealed roads within 25km, and an airstrip within 10km. The copperconcentrate produced could easily be shipped to the nearby smelters in theCopperbelt. About African Eagle African Eagle is a mineral exploration and development company operating ineastern and central Africa. The Company's principal advanced projects are theMkushi Copper Mines project in Zambia and the Miyabi gold project in Tanzania,which are being fast-tracking towards production. The Company also holds a largewell-balanced portfolio of promising earlier stage gold and base metal projects,including the Ndola copper project and the Eagle Eye iron-oxide copper goldproject. African Eagle's projects are in Zambia, Tanzania and Mozambique, countries whichall have highly prospective geology, relatively low above-ground risks and trackrecords of successful major investments in the metals and minerals 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. The Company has a highly motivated team, proven management and an experiencedboard. African Eagle prides itself on being a low cost operator and on average80p or more of every £1 is spent "in the ground". This information is provided by RNS The company news service from the London Stock Exchange