3 Jun 2008 10:04
AFRICAN EAGLE PLC
RANDGOLD RESOURCES TO PROCEED WITH PHASE TWO
OF ITS JOINT VENTURE ON THE MIYABI GOLD PROJECT IN TANZANIA
Randgold completes Phase One exploration and exercises option to begin Phase Two
Structural study reveals targets for future drilling
Follow-up drilling and increased exploration expenditure
African Eagle Resources plc ("African Eagle" or "the Company", ticker AIM: AFE, AltX: AEA) today announces that Randgold Resources Ltd ("RRS", ticker LSE: RRS, Nasdaq: GOLD) has now completed its Phase One exploration programme on the Miyabi Gold Project in the Lake Victoria Goldfields of Tanzania and has elected to enter the Earn-in Phase.
African Eagle's Managing Director Mark Parker commented "Randgold's decision to exercise its option to begin a formal earn-in to the Miyabi Joint Venture shows that it sees the potential of the project, and we look forward to rapid progress over the coming months. Randgold's careful geological and structural interpretation has identified several new conceptual gold targets. Elsewhere, African Eagle itself is progressing rapidly on a number of its other projects, particularly Mkushi, where the Company aims to start copper production by mid-2010".
Under the joint venture agreement, which was signed in May 2007, RRS has been undertaking an agreed Phase One exploration programme to assess the gold potential of the project beyond the 520,000 ounce JORC-compliant resource already outlined by African Eagle. The Phase One programme included diamond drilling in the 7km x 2km northeast trending gold-bearing Miyabi shear zone corridor and RAB drilling over the Idahina geochemical targets, together with a structural and geological interpretation of all new and previous data. RRS's total expenditure on Phase One was just over US$1 million.
On completion of Phase One, RRS had the option, which it has now exercised, to commence Phase Two, under which it can earn a 50% interest in the joint venture by solely funding all further project costs up to and including completion of a predefined Pre-Feasibility Study. On completion of the Pre-Feasibility Study, African Eagle can elect to retain a 49% stake in the project by co-funding a Definitive Feasibility Study, or to dilute to a 35% stake if RRS provides all funding for this phase.
Project Update
The Phase One exploration programme included 20 diamond drill holes (4,078m), mostly along two fences across the entire Miyabi corridor, and was principally designed to provide geological and structural information. It was not the intention of the programme to add to the existing 520,000oz resource, but none the less, mineralisation was intersected during this programme and some significant assay results were reported by RRS. These included 12.2g/t over 1m within 1.6g/t over 9m in MBDH-44, 1.3g/t over 9m within 0.6g/t over 26m, and 1.3g/t over 9m in MBDH-47.
Three of the drill holes were completed over a prominent geophysical induced polarisation target located northwest of the Kilimani deposit, and revealed gold associated with sulphides at the granite-greenstone contact zone. Such contacts are favourable sites for gold mineralisation, as at Faida, which hosts a resource of 200,000 ounces 5km to the southwest. The gold intersections helped to increase confidence in the decision to proceed to the next phase.
RRS's structural and geological modelling of the drill data indicates at least two phases of folding in the Miyabi corridor. This implies the possibility of hidden fold closures with associated "blind" gold mineralisation at depth.
RRS also completed a RAB drilling programme at the Idahina gold geochemical target, which lies approximately 12km southeast of the main Miyabi Corridor. A total of 99 holes were completed for 3,402 metres, but assay results are still pending.
Mark Parker
Managing Director
African Eagle Resources plc
03 June 2008
Qualified Person
Information in this report relating to exploration results is based on data reviewed by Mr Christopher Davies BSc, MSc, DIC, FSEG, FAusIMM, Operations Director for African Eagle, who is a Fellow of the Australasian Institute of Mining and Metallurgy, has more than 27 years relevant experience in mineral exploration and is a Qualified Person under AIM rules. Mr Davies consents to the inclusion 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 and other published material may be found at www.africaneagle.co.uk/african-eagle-projects-glossary.html
For further information:
| Mark Parker Managing Director African Eagle +44 20 7248 6059 +44 77 5640 6899 Nicola Marrin Seymour Pierce Limited, London Nominated Adviser + 44 20 7107 8000 Charmane Russell Russell & Associates, Johannesburg + 27 11 8803924 +27 82 8928052 Ed Portman / Leesa Peters Conduit PR, London +44 20 7429 6607 +44 (0) 7733 363 501 |
About Miyabi
The Miyabi Gold Project lies in the southwest part of the Lake Victoria Goldfield of Tanzania, about 50km west-southwest of Kahama township in Shinyanga District. The multi-zoned gold system at Miyabi, discovered by African Eagle's geochemical prospecting team, forms a corridor around 7km long by 2km wide and is associated with a major shear zone through greenstone and granitic rocks. To date, African Eagle's drilling has delineated five principal orebodies: Faida, Shambani Main and North, Ngaya and Kilimani.
In early 2006, the Company commissioned SRK Consulting Ltd to conduct a formal resource estimate based on all drill results to date. The total JORC compliant Mineral Resource was estimated to be 12.4Mt at a grade of 1.3g/t, containing 520,000 ounces of gold, using a cut-off grade of 0.5g/t, which is appropriate to Tanzanian deposits of the Miyabi type. Of this, 71% is in the Indicated category.
Independent metallurgical testing of systematically selected gold-bearing drill samples representative of all of the principal mineralised zones at Miyabi showed that standard leaching recovers 95% of the gold from the ore.
The potential for adding to the gold resource at Miyabi is very good, with many targets identified from geophysical and geochemical surveys within the main mineralised corridor remaining to be drilled, and African Eagle believes that the project could hold at least one million ounces.
The Company's prospecting licences also cover more than 500 square kilometres of highly prospective granite-greenstone terrain around the main mineralised corridor and regional exploration of these areas has identified several promising targets.
About African Eagle
African Eagle is a mineral exploration and development company operating in eastern and central Africa. The Company's principal advanced projects are the Mkushi Copper Mines project in Zambia and the Miyabi gold project in Tanzania, which are being prioritised towards production. The Company also holds a large well-balanced portfolio of promising earlier stage gold and base metal projects, including the Mokambo and Ndola copper projects in the Zambian Copperbelt and the Eagle Eye iron-oxide copper gold project in eastern Zambia.
African Eagle's projects are in Zambia, Tanzania and Mozambique, countries which all have highly prospective geology, relatively low above-ground risks and track records of successful major investments in the metals and minerals industries.
African Eagle specialises in project generation and exploration. To take its discoveries into production, it seeks to sign up industry partners with records of successful mine development. These joint ventures and, in time, the revenue from advanced projects, will finance future exploration and new discoveries.
The Company has a highly motivated team, proven management and an experienced board. African Eagle prides itself on being a low cost operator and on average 80p or more of every £1 is spent "in the ground".