African Eagle Resources Regulatory News (AFE)

31 Jan 2007 07:01

African Eagle Resources PLC31 January 2007 African Eagle Resources plcNews Report PROGRESS REPORT - More encouraging results from continuing drilling at the Company's near-term production project, the Mkushi Copper Mines in Zambia.- Drill rig now mobilising to priority targets at the Ndola Copperbelt project in Zambia- New targets at Eagle Eye from advanced re-interpretation of the geochemical data- Airborne geophysical surveys underway at Ndola, Mkushi and Lunga, Zambia- Advanced discussions with potential JV partners for Miyabi gold project, Tanzania African Eagle Resources plc ("African Eagle" or "the Company") (ticker: AIM:AFE)recently completed its six-monthly project review and I am pleased to reportexcellent progress on our key projects. Mkushi Copper Mines - Zambia The feasibility study in the Mkushi core area is progressing well. Joint venturepartner CGA Mining Limited (formerly Central Asia Gold Limited) has completed3,930m of reverse circulation drilling and 1,954m of diamond drilling sincetaking over operations in the core area in July 2006. They have submitted 2,716drill samples for assay, of which about half of the results have been reportedand another 25% are expected shortly. CGA has also commissioned an environmentalbaseline study, currently underway, and metallurgical testing which hasconfirmed copper recoveries in excess of 95%. The latest drill results include 82.7m at 1.7% copper and 66.1m at 1.0% copper.The on going drill programme continues to confirm the substantial width andgrade of the deposit and is on track to increase the JORC-compliant copperresource at Mkushi. In tandem with CGA's feasibility study in the core area, African Eagle ismanaging the exploration of the remaining 467km2 area of the tenement, fundedpro rata by the two companies. The results of a high resolution airbornegeophysical survey have just been delivered and are being interpreted: the firstindications are promising. We believe that the potential for discovery of additional copper mineralisedzones is good: African Eagle's extensive IP surveys have defined 40 anomalieswith IP signatures similar to those over the known copper mineralisation. Onepromising exploration target is the Munda prospect, which lies on a mineralisedtrend parallel to and 2km southeast of the core zone. Mineralised drillintercepts from six test holes drilled by African Eagle at Munda included 40m at0.48% copper and 32m at 0.57% copper. Miyabi - Tanzania The Miyabi project area is host to a major shear zone gold system which forms a7km x 2km gold-bearing corridor. To date, African Eagle has drilled only part ofthe system, but we have been able to define a JORC resource of 520,000 ouncesgold. Moreover, metallurgical tests have shown that the gold can readily beextracted by conventional leaching. The Company holds licences covering morethan 500km2 around the Miyabi gold corridor and has defined several othertargets from regional exploration, which we plan to follow up during the year. Since the completion of the last drill programme and the release of the updatedresource estimate of 520,000 ounces gold, we have been in discussion with anumber of potential JV partners with a view to taking this project forwardrapidly towards feasibility study as quickly as possible. We expect to make anannouncement with regards to the future development of Miyabi soon. Ndola - Zambia We are excited by the latest results from our Ndola project, which lies in theZambian Copperbelt adjacent to the border with the Democratic Republic of Congo(DRC). We have largely completed our basic surveys over this highly prospective licenceand a drill rig is currently mobilising to site to commence drilling on ourpriority target. For the soil geochemical survey, we collected 1600 samples over a 400m gridcovering most of the licence area. Initial results obtained using our ownportable XRF analyser have revealed several new anomalous areas as well asconfirming the known mineralised horizon in the northwest of the licence area.All samples have now been submitted to an accredited analytical laboratory forfull multi-element analysis and we will be conducting follow up sampling of theidentified anomalies in order to define additional drill targets. In early January, we completed a helicopter-borne geophysical magnetic andgamma-ray spectrometric survey over the whole of the Ndola licence. The datashows an excellent correlation with our preliminary geochemical data and makes avery useful contribution to our understanding of the geology and mineraldeposits of the area. Our priority target area is in the northwest of the licence, where coppermineralisation is known to occur within a structurally complex zone in the LowerRoan Mine Series. Such zones elsewhere in the Copperbelt are often associatedwith enhancements of both grade and thickness of copper mineralisation.Moreover, the continuation of the same zone into DRC is a current First QuantumMining drill target. We will drill up to five relatively deep diamond drillholes to investigate this zone, with wedged offsets where necessary to definethe mineralisation intersected. Phelps Dodge Mining Zambia Ltd (PDMZ) will initially fund exploration at Ndolaunder an Option agreement and the subscription of US$2.27M for African Eagleshares. PDMZ can ultimately earn an interest of up to 70% in the project byexpending an additional $3 million and completing a bankable feasibility study.Regulatory hurdles in Zambia have now been surmounted and we expect the first$1.27 subscription tranche to be completed soon. Eagle Eye - Zambia Late last year, we completed the westward extension of a soil geochemical surveyand geological mapping to cover a further 60 square kilometres of the SasareVolcanics and other prospective geological units within the Eagle Eye projectarea. The geological mapping identified an area of potassic hydrothermalalteration with associated haematite, which may indicate the potential forcopper mineralisation in the granite. This discovery could have major positiveimplications for future resource development at Eagle Eye. As at Ndola, we used a portable XRF analyser to expedite preliminary copperassaying. The 390 samples have now been submitted to an accredited lab for fullmulti-element analysis. African Eagle is currently conducting a thorough re-interpretation of the EagleEye database. Careful imaging of the multi-element soil geochemical data inparticular has given us important insights into the mineralised system and willallow us to plan the next phase of drilling with confidence. We are keen to bring in a partner on the Eagle Eye project, and negotiations areunderway with several interested parties. Early exploration projects African Eagle holds several additional early stage project areas in Tanzania,Zambia and Mozambique and we are seeking partners to work with us, to evaluatethese and take them forward. Two of these projects have recently deliveredparticularly promising results. Dutwa is a gold and platinum prospect in the historic Kilimafedha greenstonebelt, 100km east of the regional capital of Mwanza in Tanzania. The colonial-eraNgasamo gold mine lies at the western end of the belt. We have acquired fivecontiguous licences covering 500km(2) at Dutwa, containing 90% of theprospective part of the belt. Previous exploration has been very limited and theground has not been subjected to modern exploration techniques. To date, we have completed 1500 line kilometres of ground magnetic survey,collected and analysed 3392 soil samples and 421 auger samples. The results havebeen particularly encouraging, with three gold in soil anomalies defined,including one with values up to 7 g/t gold. The magnetic survey and soil sampling programs are continuing and it isanticipated that a drilling programme will commence in the near future. In our large Lunga licence in central Zambia, our partner MinEx Projects hascompleted the collection of some 5000 follow-up soil samples over thecopper-gold anomalies revealed by reconnaissance geochemistry on the flanks ofthe Karenda Dome. An airborne geophysical survey is scheduled for May and drilltargets will be selected by the start of the dry season. Corporate and Partner activities During 2006, we shifted African Eagle's strategic emphasis towards taking ourmost advanced and significant projects into production as quickly as possible.To this end, we set out to bring suitably qualified partners into joint ventureor farm-in deals. As reported above, we have signed deals with Phelps Dodge on the Ndola project,CGA Mining over Mkushi Copper Mines and MinEx Projects at Lunga. Resolute Mining exercised its option to farm in to the Kakumbi Gold Project inTanzania, having fulfilled its first year's expenditure commitments and obtainedencouraging results. Northern Mining has this decision still to make at Msasawhen its option period ends in May. Negotiations are underway with potentialpartners on several other projects. These Option and Farm-in agreements represent minimum expenditure commitments byour partners of US$5 million. If all the earn-in agreements already signed andunder negotiation are taken through to fruition, our partners will invest in theorder of US$50 million in African Eagle's assets. There is still a shortage of good new mineral projects in the world, mineralcommodity prices are still attractive and Africa remains one of the morefavourable investment destinations for mining. We are confident that AfricanEagle is well placed to capitalise on these strengths. 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 / +44 (0) 7733 635 01 Qualified PersonInformation in this report relating to exploration results is based on datareviewed by Mr Christopher Davies BSc, MSc, DIC, Operations Director for AfricanEagle, who is a Fellow of the Australasian Institute of Mining and Metallurgy,has more than 25 years relevant experience in mineral exploration and is aQualified Person under AIM rules. Mr Davies consents to the inclusion of theinformation 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 fast-tracking 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. 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. The Company has a highly motivated team, proven management and an experiencedboard. African Eagle prides itself on being a low cost operator and on average80p or more of every £1 is spent "in the ground". This information is provided by RNS The company news service from the London Stock Exchange