African Eagle Resources Regulatory News (AFE)

3 May 2006 15:00

African Eagle Resources PLC03 May 2006 African Eagle Resources plc OPTION GRANTED OVER MSASA GOLD PROPERTY, TANZANIA African Eagle Resources plc (the Company, ticker AFE) is pleased to announcethat it has signed an option agreement with MDN Northern Mining (Minieres duNord) (Toronto Stock Exchange TSX, Symbol MDN) over the Msasa gold project inTanzania. Under the option, MDN has undertaken to invest an initial US$200,000 inexploration and, subject to successful results, can then earn a 51% interest inthe project by investing a further US$ 1.7 million by January 2010. MDN can thenincrease its interest to 65% by financing a feasibility study with respect tothe property. MDN already holds a 30% interest in the Tulawaka Gold Mine which is located just15 km to the northwest of the Msasa project. Tulawaka has reported proven andprobable Reserves of 546,000 ounces of gold, at a grade of 12.2 grams per tonne.The mine was commissioned in March 2005 and is operated by Barrick Gold, MDN'smajority partner in the project. Gold production in Tulawaka's first year ofoperations to March 2006 was 147,093 ounces. African Eagle recently completed a programme of 31 reverse circulation drillholes at Msasa which intersected gold mineralization in several quartz veinsapparently similar to those at the Tulawaka mine. The best intersection of thisprogramme was 81 g/t gold over 9 metres, including 241 g/t over 3 metres. Pursuant to the option agreement, MDN plans immediately to launch a follow-upprogramme of step-out drilling to determine the extent of the high grademineralization and to test various other targets, which have already beenidentified inside the Msasa licence. Mark Parker, African Eagle's Managing Director comments "We are very pleased towelcome MDN Northern Mining as our partner on the Msasa project and look forwardto a productive working relationship. MDN has gained a very good understandingof the geology and mineralisation of the area and will be able to evaluate Msasaefficiently from its nearby operating base at Tulawaka. The agreement with MDNis in line with our policy of finding quality development partners for projectsfrom our substantial project portfolio". John ParkChairman African Eagle Resources plc 3 May 2006 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 7980 1159 Chris DaviesOperations Director+44 20 7248 6059+44 78 6672 9959 Leesa Peters or Pam SpoonerConduit PR+44 20 7429 6600+44 78 1215 9885 This information is provided by RNS The company news service from the London Stock Exchange