African Eagle Resources Regulatory News (AFE)

26 Sep 2006 08:00

African Eagle Resources PLC26 September 2006 African Eagle Resources plc FIRST FORMAL RESOURCE ESTIMATE FROM H-ZONE AT MKUSHI COPPER MINES PROJECT, ZAMBIA • Independently audited Mineral Resource estimated in accordance with the JORC Code (2004) at the Mkushi Copper Mines project. • The estimated Inferred Resource ranges from 10.7 million tonnes averaging 0.73% copper to 7.1 million tonnes averaging 0.90% copper, depending on the cut-off grade applied. • Drilling continues to expand and upgrade this preliminary total. • Metallurgical test results confirm that more than 95% of the copper can be recovered by simple flotation. • Bankable feasibility study underway. African Eagle's Managing Director Mark Parker comments "This Inferred Resourcerepresents the position at the start of our Joint Venture with Central Asia Goldand we expect that it will be augmented considerably. The metallurgical resultsconfirm that the capital cost of the plant is likely to be relatively low. Wenow look forward to further news from the project as the feasibility studyprogresses over the coming months". African Eagle Resources plc ("African Eagle" or "the Company"), the AIM quotedmining and exploration company, today announces the first independently auditedInferred Mineral Resource on its Mkushi Copper Mines project in Zambia. Theestimate is for H-Zone only, just one of the six known mineralised zones atMkushi, and is based on 42 of the 53 drill holes for a total of 8,359m drilledby African Eagle prior to commencement of its June 2006 Joint Venture withCentral Asia Gold Limited (CAGL). The Company has also received the results of metallurgical tests which show thatthe copper can be readily and effectively extracted from the samples usingconventional flotation, with recoveries of more than 95%. The tests also showedthat the mineralisation is easy to grind. The results confirm African Eagle'sview that the capital cost of a plant for Mkushi should be relatively low, inline with the Company's internal economic modelling which indicates that theproject should be profitable across a wide range of copper prices. The Mineral Resource for H-Zone, estimated by Snowden Mining IndustryConsultants (Snowden), depends on the cut-off grade applied, as shown in thetable below. Although based on only part of the known strike length, thisInferred Resource estimate already represents 60,000 to 80,000 tonnes ofcontained copper. Future infill drilling will allow higher resolution resourcemodelling which is likely to result in a higher average grade estimate in thefuture, but with a lower tonnage. Cutoff grade Million tonnes Average grade Category 0.3% 10.7 0.73% Inferred 0.4% 9.0 0.80% Inferred 0.5% 7.1 0.90% Inferred African Eagle is confident that the resource will be considerably increasedthrough extensive drilling and exploration programmes underway and planned onH-Zone and the other five known mineralised zones. Archive data from previousoperators indicates that the Mkushi area as a whole contains a globalexploration target of the order of 30 million tonnes averaging 1.2% copper. African Eagle and its joint venture development partner Central Asia GoldLimited (CAGL) are now exploring for additional resources and undertaking a fullfeasibility study. Current priority activities are: • Infill and extension drilling of H-Zone to increase the tonnage and move towards increasing confidence in the resource estimate to Indicated and Measured Resource categories. • Resource drilling of the other known mineralised bodies, especially Munshiwemba, Coloquo and Mtuga. • Drilling of new exploration targets to increase the resource, including the IP anomalies starting with targets in the Munda area. All of the first five drill holes at Munda have intersected visible copper mineralisation, over a strike length of 1km and assays are awaited. Snowden noted that their modelling used relatively large model blocks of 1000cubic metres (20m along strike, 10m normal to strike and 5m vertical), with theblock grades estimated by ordinary kriging. This coarse block size was necessarybecause the drill holes to date have been at the relatively wide collar spacingof approximately 50m x 50m. Nevertheless the continuity of the mineralisation issufficient to enable a resource estimate in the Inferred Resource category.Future closer spaced infill drilling will allow higher resolution resourcemodelling on this area of the deposit and is likely to result in a higheraverage grade estimate in the future, but with a lower tonnage. Snowden suggestthat structurally controlled high grade shoots with 2% or more copper may occurwithin the deposit and that infill drilling is also likely better to definethese high grade lodes. Clearly, additional drilling outside the H-Zone area is expected to increase andextend the resource considerably. Indeed, Snowden commented that mineralisationin the area has been confirmed by drilling over 7 km of strike length to atleast 150 m vertical depth and that a considerable number of interestinggeophysical IP anomalies remain to be drill-tested. John ParkChairman 26 September 2006 Information in this report relating to the exploration results is based on dataacquired under the supervision of Mr Christopher Davies B.Sc, M.Sc, DIC,Operations Director for African Eagle who is a Fellow of the AustralasianInstitute of Mining and Metallurgy, has in excess of 25 years experience inmineral exploration and is a Qualified Person under AIM rules. Mr Daviesconsents to the inclusion of the information in the form and context in which itappears. The information in the technical report on which this statement is partly basedthat relates to Exploration Results, Mineral Resources or Ore Reserves is basedon information compiled by EurGeol Dr Edmund Sides B.A., M.Sc., D.I.C., ofSnowden who is a professional member of the Institute of Geologists of Ireland(IGI). The IGI is a Recognised Overseas Professional Organisation (ROPO) asrequired under the JORC reporting guidelines. EurGeol Dr Sides has sufficient experience which is relevant to the style ofmineralization and type of deposit under consideration and to the activity whichhe has undertaken to qualify as a Competent Person as defined in the 2004edition of the 'Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves'. EurGeol Dr Sides consents to the inclusion in thisreport of the matters based on his information in the form and context in whichit appears. Glossary of technical terms used Copper A red metal widely used in the electrical and plumbing industries, chemical symbol Cu Cut-off grade The grade used to separate ore and waste such that only material classified as ore will be treated in order to recover the economic metal or mineral of interest. Feasibility A study of the economic viability of the mining and productionstudy of base or precious metals or other minerals in such form and containing such detail as is customarily required by a bank or other financial institution engaged in mining project finance to enable it to determine whether to finance the development of a commercial mining operation. Flotation A method of separating ore mineral grains from other materials using surfactant chemicals to entice them to adhere to bubbles in an aerated mixture of crushed ore in water, allowing them to be skimmed from the surface of the mixture Grade The tenor or concentration by weight of a metal in a mineral deposit or ore Indicated A category of Mineral Resource of higher confidence than anResource Inferred Resource, the estimation of which is prescribed by the JORC Code. This is the minimum level of resource classification required for Ore Reserve estimation under the JORC Code. Inferred A category of Mineral Resource the estimation of which isResource prescribed by the JORC Code. Inferred Resources cannot be used as a basis for Ore Reserve estimation. IP Induced Polarisation, a geophysical prospecting method which measures the induction of electrical charge on the surfaces of conducting mineral grains such as metal ores, within the Earth JORC Code Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (Joint Ore Reserves Committee). See www.jorc.org/main.php Kriging A class of methods of estimating mathematically the distribution of a metal in three dimensions within the earth, together with the confidence of the estimate Measured A category of Mineral Resource of higher confidence than anResource Indicated Resource, the estimation of which is prescribed by the JORC Code Mineral An estimated tonnage and grade of mineralisation in the groundResource determined as prescribed by the JORC Code Ore Reserve That part of a Mineral Resource which can be demonstrated to be worked profitably when all modifying factors are taken into account. Metallurgical Relating to the study of the extraction, processing and properties of metals and their ores Model block A finite 3D element of the Earth for which the average grade can be estimated from drill data Mt Million Tonnes Tonne A metric tonne of 1000 kilograms, abbreviation t About African Eagle African Eagle is a mineral resources company with a focus on eastern and centralAfrica. The Company operates in Zambia, Tanzania and Mozambique, all countrieswith highly prospective geology and low above-ground risks, which have all beenrecent destinations for major successful investments in the metals and mineralsindustries. The Company has a highly motivated team, proven management and an experiencedboard. Its principal operations are the Mkushi and Ndola copper projects inZambia and the Miyabi gold project in Tanzania. African Eagle has discovered alarge iron oxide copper gold (IOCG) system at Eagle Eye in Zambia and holds awell-balanced portfolio of promising early stage projects. 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 Peters or Ed PortmanConduit PR+44 20 7429 6666 This information is provided by RNS The company news service from the London Stock Exchange