African Eagle Resources Regulatory News (AFE)

12 Jun 2006 07:00

African Eagle Resources PLC12 June 2006 African Eagle Resources plc ("the Company" or "African Eagle") DRILLING UPDATE FROM MKUSHI COPPER MINES African Eagle Resources plc ("the Company" or "African Eagle", ticker AFE),announces further excellent results from its ongoing resource definitiondrilling programme at Mkushi Copper Mines in central Zambia. Best mineraliseddrill intercepts include: €27m at 2.1% copper €61m at 1.4% copper €52m at 1.3% copper €132m at 0.5% copper €73m at 0.6% copper African Eagle's Managing Director Mark Parker comments "Mkushi is givingconsistently good results and it now compares very favourably with other copperprojects being brought into production in southern Africa. The latest resultsare from a mineralised body to the southwest of the old open pit. So far, wehave outlined 12 to 14 million tonnes at an average grade between 0.7 and 1.2%copper in this body, according to our preliminary estimates. Drilling continuesand we expect to announce an independent resource estimate during Q3, with adevelopment scoping study soon after. "African Eagle believes that Mkushi will add up to a substantial copper deposit,which internal economic modelling indicates should be profitable across a widerange of copper prices. Our recent £3.3M financing will enable us to acceleratethe project towards feasibility and development." The new results are from the southwest extension of a copper deposit which wasmined by an open pit in the 1960s and 1970s. African Eagle has now traced thisbody, known as "H-Zone", for at least 800m along strike and down to 160 verticalmetres below surface. The zone is up to 60m wide and should therefore besuitable for open pit development. Preliminary geological modelling of H-Zone by African Eagle's geologists, basedon the drill results to date, indicates a potential of at least 12 to 14 milliontonnes with grades of the order of 0.7 to 1.2%, to a depth of 150 verticalmetres below surface. This estimate includes only that part of the mainmineralised body drilled to date and does not take into account a smallerparallel body. As a priority, African Eagle now intends to complete sufficientadditional drilling to allow an independently audited JORC resource estimate tobe prepared during the third quarter of 2006. There is also considerable scope to add to the resource at Mkushi by drillingother mineralised zones. A resource estimate of 30.4 million tonnes grading1.23% copper, equating to more than 370,000 tonnes of copper metal, was made in1990, based on the four mineralised zones for which drill reports were thenavailable. Already the preliminary tonnage estimate for H-Zone alone accountsfor more than one third of this figure and the other known zones and potentialnew ones identified by African Eagle's geologists remain to be evaluated. Past mining from the open pit yielded 2.2 million tonnes of ore at an averagegrade of 1% copper, but the pit reached a depth of only 30 metres and archivereports indicate that considerable resources remain beneath the old workings.The Company plans to drill this area once the old pit can be pumped dry. Moreover, there are known mineralised zones which have never been drilled andAfrican Eagle's induced polarisation geophysical surveys have identified manyother chargeable zones which may be additional copper resources elsewhere withinthe prospecting licence. African Eagle has now completed 48 inclined diamond and percussion drill holesfor a total of 7906m at the Mkushi Copper Mines. The principal results of thelatest drilling are tabulated below. A table of all mineralised drill interceptsto date and a map showing key drill results from H-Zone can be viewed atwww.africaneagle.co.uk/projects-mkushi2.html Drill Hole Hole Type From* (m) Interval (m) Copper (Cu) %MH14 diamond 161 61 1.4including 175 7 5.8and 236 5 1.9MH15 diamond 53 6 2.7and 95 52 1.3MH22 percussion 127 27 2.1MH29 percussion 14 73 0.6MH30A percussion 6 132 0.5MH31 percussion 16 53 0.5MH33 percussion 34 72 0.4MH37 percussion 12 120 0.5Including 28 18 1.5and 85 8 1.2* Down-hole depth John ParkChairmanAfrican Eagle Resources plc12 June 2006 About African Eagle African Eagle is a mineral resources company operating in eastern and centralAfrica. It holds projects in Zambia, Tanzania and Mozambique, countries withhighly prospective geology and low above-ground risks, which have all beendestinations for successful recent major investments in the metals and mineralsindustries. The Company has a highly motivated team, proven management and an experiencedboard. Its principal operation is the Mkushi Copper Mines projects in Zambia. Italso holds the Miyabi gold project in Tanzania, the Ndola copper project in theZambian Copperbelt and has discovered a large iron oxide copper gold (IOCG)system at Eagle Eye in Zambia. There is also a well-balanced portfolio ofpromising early stage exploration projects. About Mkushi Copper Mines Discovered in 1922, the Mkushi deposits were first mined by undergroundworkings, then developed as an open pit operation in the late 1960s. The mineclosed around the time of Zambia's nationalisation of the copper industry in the1970s, but archive reports indicate that there is still abundant ore left in theground. African Eagle Resources acquired the Mkushi Copper Mines in 2002 througha share-based acquisition of an Australian exploration company and is nowdrilling to confirm and expand the known copper resource. The local infrastructure around Mkushi is excellent and the brownfield siteshould make it straightforward to obtain permits for renewed operations. Thedeposits have simple chalcopyrite mineralogy which should allow a concentrate tobe produced efficiently at relatively modest capital cost. Mkushi is the onlyZambian copper mine in rocks older than the Katangan sequence which hosts thewell known Copperbelt deposits. African Eagle is also exploring a wide area surrounding the old mines.Geophysical induced polarisation surveys, which to date cover almost 30 squarekilometres, have revealed additional anomalies in the area, which African Eaglebelieves could bring the total resource to 50Mt at 1% or more copper, with500,000 tonnes of contained metal. The Company is conducting a full resource drilling programme and economicevaluation at Mkushi, leading to a full feasibility study during 2007, with aview to taking the project to commercial production. Qualified Person Information in this report relating to the exploration results is based on datareviewed by Mr Christopher Davies B.Sc, M.Sc, DIC, Operations Director forAfrican Eagle Resources, who is a Fellow of the Australasian Institute of Miningand Metallurgy, has in excess of 25 years experience in mineral exploration andis a Qualified Person under AIM Rules. Mr Davies consents to the inclusion ofthe information in the form and context in which it appears. 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 Chris DaviesOperations Director+44 20 7248 6059+44 78 6672 9959 Leesa PetersConduit PR+44 20 7429 6600+44 78 1215 9885 This information is provided by RNS The company news service from the London Stock Exchange