African Eagle Resources Regulatory News (AFE)

29 May 2007 07:01

African Eagle Resources PLC29 May 2007 FULL JOINT VENTURE SIGNED TO REPLACE HEADS OF AGREEMENT TO EVALUATE AND DEVELOP MKUSHI COPPER MINES IN ZAMBIA News Report29 May 2007 • Full Joint Venture Agreement signed with development partner CGA Mining replacing earlier Heads of Agreement • Joint Venture Company Established • Pre-feasibility study expected Q3 2007 • Production Decision by Q3 2008 AIM quoted African Eagle Resources plc ("African Eagle" or "the Company", tickerAIM: AFE) today announces that it has signed a full Joint Venture Agreement("JV") with Australian listed CGA Mining Limited ("CGA") that replaces the Headsof Agreement (Heads) signed in July 2006, under which the parties have beenworking together for the development of the Mkushi Copper Mines in Zambia. The signing of the JV and incorporation of the JV Company formalises the ongoingalliance between African Eagle (AFE) and CGA in line with African Eagle'sstrategy of bringing in partners with the expertise and funds to take itsdiscoveries into production as swiftly and cost-effectively as possible. CGA's work at Mkushi is progressing extremely well. A pre-feasibility study isexpected to be completed during the third quarter of this year together with anupdated resource estimate, further metallurgical test work and preliminaryfinancial modelling. CGA has expended around US$1.7 million on exploration anddevelopment costs on the project to date including more than 5,500m of reversecirculation drilling and 6,000m of diamond drilling. About 2,200m of drillingremains to be completed in the current programme which will be followed byinfill drilling to evaluate better the high grade ore shoots. Currently, threediamond drill rigs are operating on site to ensure the key milestones areachieved. Pursuant to the JV agreement, AFE and CGA have set up a joint venture company,Mkushi Copper Joint Venture Ltd, holding 49% and 51% interests respectively. TheJV formalises the Heads of Agreement, whereby CGA is conducting and solelyfinancing a bankable feasibility study ("BFS") at Mkushi to be completed byAutumn 2008. At the same time African Eagle is conducting exploration over awider area, funded jointly by the parties pro rata to their participatinginterests in the JV. CGA will arrange finance for the development of miningoperations if the BFS is positive. The JV has recently been approved by theZambian Minister of Mines and Mineral Development and the Prospecting Licencescovering the mineral rights at Mkushi will be assigned to the JV Company. Managing Director Mark Parker comments: "The signing of the full joint ventureagreement sets in place the administrative framework which African Eagle and CGAwill need in order to take the Mkushi project towards production. In themeantime, CGA has been making excellent progress on its feasibility work whileAfrican Eagle's exploration in the surrounding area has indicated many promisingtargets." "We are delighted to have CGA, whose managers have a significant track record ofdeveloping mines in Africa quickly and cost-effectively, as our developmentpartner at Mkushi." John ParkChairman 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 Nicola MarrinSeymour Pierce LimitedNominated Advisors & Brokers+ 44 20 7107 8000 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 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 prioritised 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 and has a highlymotivated team, proven management and an experienced board. 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. This information is provided by RNS The company news service from the London Stock Exchange