Dutwa resource upgrade

African Eagle Resources plc
RESOURCE UPGRADE TO JORC INDICATED CATEGORY
AT DUTWA NICKEL PROJECT, TANZANIA


African Eagle Resources plc (AIM: AFE; AltX AEA) is pleased to announce a
significant resource upgrade at its Dutwa nickel project in Tanzania. This
resource upgrade, by independent geological contractors the Snowden Group,
places more than three quarters of the Wamangola resource (the larger of the two
nickel deposits that make up the Dutwa project) into the indicated category
under the JORC code.

This is the first indicated resource at Dutwa and signifies a leap forward for
the project, with increased confidence in the continuity of the orebody.
Indicated resources can be used to derive formal mineral reserves for the
feasibility study now underway.

The resource statement for the Dutwa project is now as follows:

------------- ------ ------ ------ ------------- -------------
| | Mt | %Ni | %Co | Kt Ni metal | Kt Co metal |
------------- ------ ------ ------ ------------- -------------
| INDICATED | |
------------- ------ ------ ------ ------------- -------------
| Wamangola | 46.2 | 0.93 | 0.03 | 430 | 14 |
------------- ------ ------ ------ ------------- -------------
------------- ------------------------------------------------
| INFERRED | |
------------- ------ ------ ------ ------------- -------------
| Wamangola | 14.1 | 0.82 | 0.02 | 116 | 3 |
------------- ------ ------ ------ ------------- -------------
| Ngasamo | 38.2 | 0.97 | 0.03 | 371 | 11 |
------------- ------ ------ ------ ------------- -------------
------------- ------ ------ ------ ------------- -------------
| TOTAL DUTWA | 98.6 | 0.93 | 0.02 | 917 | 28 |
------------- ------ ------ ------ ------------- -------------

These resources were estimated under Australasian Joint Ore Reserves Committee
(JORC) Code, 2004.

Highlights of the resource statement upgrade are:

* 46.2 million tonnes (Mt) at 0.93% nickel and 0.03% cobalt (of the total
Dutwa Project 98.6Mt) now in the JORC indicated category.
* Grade increase for the tonnes upgraded to indicated from 0.90% Ni to 0.93%
Ni.
* 47% of the total Dutwa resource is now in JORC indicated category and more
will be upgraded after further drilling at Ngasamo later in the year.
* Indicated resources can be used to derive probable mining reserves for the
pre-feasibility study, due for completion by Q3, 2011.

African Eagle's Managing Director Mark Parker comments:

"This resource upgrade is another significant milestone in our Dutwa feasibility
study. Snowden has converted a large portion of the Wamangola resource directly
to the indicated category and we will only need to do infill drilling in areas
of structural complexity such as fault zones and areas around cross-cutting
dykes.

Infill and step-out drilling to delineate the smaller Ngasamo deposit fully is
planned in early 2011 and we will then ask Snowden to upgrade from inferred to
indicated.

Meanwhile work for the pre-feasibility study is progressing well and we have
shipped a large portion of the bulk ore samples from both the Wamangola and
Ngasamo deposits to Perth, WA for metallurgical tests."

RESOURCE UPGRADE

In November 2010, African Eagle received assay results from 1 metre samples on
reverse circulation (RC) infill drilling on a nominal 50m x 50m grid in three
200m square panels of the Wamangola deposit. The rest of the deposit is covered
by 3m composite samples on a nominal 100m drilling grid. Wamangola is the larger
of the two nickel deposits which make up the Dutwa project, accounting for 60Mt
of the 99Mt of project resources.

African Eagle's geological contractor Snowden has now performed geostatistical
analysis of the infill data, giving a detailed assessment of the short range
geological continuity, in order to upgrade the resource classification.

Snowden concluded that most of the Wamangola mineral resource, previously
reported in September 2010, could be upgraded from the inferred to the indicated
category under JORC 2004 guidelines. The upgrade does not apply to some limited
areas, accounting for less than 25% of the resource, which are affected by major
dykes, structural complexity or the pinching out of the nickel mineralisation.
We expect future infill drilling to allow most of these areas to be upgraded to
indicated, however.

Infill and step-out drilling is also planned early this year at the Ngasamo
deposit, which currently accounts for the remaining third of the Dutwa Project's
total resources. When this is completed, African Eagle will request Snowden to
upgrade the Ngasamo deposit to the indicated category. As the deposit is
geologically similar to Wamangola it is likely that much of it will also report
to the indicated category.

Snowden's Whittle optimisations for the new economic model, which were based on
the October 2010 block models of the inferred mineral resources, suggested that
a high proportion of the resource is likely to report to reserves. African Eagle
expects that most of the 99Mt resource will be in the indicated category by the
completion of the pre-feasibility study in Q3 2011, allowing formal probable
mining reserves to be defined. The final detailed drilling of areas of
structural complexity will probably be performed for the definitive feasibility
study or after commencement of mining.

The table below sets out the current mineral resources for the whole Dutwa
project.

Dutwa mineral resource statement, as of January 2011

----------- ------- --------------- ------ -----------------------------------
| |Tonnage|Grade | |Major element oxides (1) |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
| |Mt |Ni %|Co %|eNi %|eNi kt|SiO(2)%|Al(2)O(3)%|Fe(2)O(3)%|MgO% |
| | | | |(2) |(3) | | | | |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Wamangola | |
----------- ------------------------------------------------------------------
|Indicated | |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|FerSil |35.4 |0.9 |0.03|0.94 |333 |73.59 |2.53 |12 |3.74 |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Trans |10.8 |1 |0.02|1.03 |111 |54.08 |1.85 |12.19 |17.07|
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Sub-total |46.2 |0.93|0.03|0.97 |444 |69.02 |2.37 |12.05 |6.87 |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Inferred | |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|FerSil |7.5 |0.76|0.02|0.79 |59 |72.55 |2.8 |12.64 |3.85 |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Trans |4 |0.85|0.02|0.88 |35 |54.84 |2.74 |12.72 |15.78|
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Sap |2.5 |0.95|0.02|0.98 |24 |35.4 |0.37 |7.41 |34.54|
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Bedrock |0.1 |0.91|0.01|0.92 |1 |33.38 |0.17 |7.02 |41.16|
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Sub-total |14.1 |0.82|0.02|0.85 |119 |60.51 |2.32 |11.68 |13.07|
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|TOTAL |60.3 |0.9 |0.02|0.93 |560 |67.03 |2.36 |11.96 |8.32 |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Ngasamo | |
----------- ------------------------------------------------------------------
|Inferred | |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|FerSil |19 |0.9 |0.04|0.95 |181 |73.85 |1.94 |12.58 |4.98 |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Trans |12.5 |1.07|0.03|1.11 |139 |59.71 |1.5 |14.04 |13.91|
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Sap |6.7 |0.98|0.04|1.03 |69 |39.11 |0.63 |16.02 |26.02|
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|Bedrock |0.02 |0.62|0.01|0.63 |0 |39.7 |0.17 |7.94 |35.91|
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|TOTAL |38.1 |0.97|0.03|1.01 |386 |63.11 |1.56 |13.66 |11.61|
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----
|GLOBAL |0.93 |0.02|0.96|946 |65.51 |67.03 |2.05 |12.62 |9.59 |
|TOTAL | | | | | | | | | |
----------- ------- ---- ---- ----- ------ ------- ---------- ---------- -----

(1) Key elements of metallurgical importance, expressed as oxides. The very high
silica concentrations are a benefit for heap leaching while the low aluminium,
iron and magnesium concentrations help explain the low acid consumption during
leaching.
(2) eNi % (equivalent nickel) = Ni % (Co % x 1.32); based on US$10/lb Ni and
US$17/lb Co, with recoveries of 90% for Ni and 70% for Co. A cutoff grade of
0.43% eNi was used for the resource estimates.
(3) Contained tonnage of equivalent nickel metal.
Small discrepancies may occur due to the effects of rounding.


PRE-FEASIBILITY PROGRESS

The first 12 tonne representative bulk ore sample has now been shipped to Perth,
WA. Bench scale metallurgical and geotechnical testwork will begin in January
2011 on the bulk sample, to help us choose the optimum processing route for the
Dutwa ore. Drilling will commence later this month for an additional 10 tonnes
of sample, which will be used for pilot plant testwork, including continuous
tank leaching tests and large scale tests using columns 6 to 8m high to
replicate heap leach behaviour.

The results of bench scale tests being carried out by Mintek in Johannesburg on
RC drill samples from Ngasamo are expected to be received in January 2011.

A programme of infill and step-out drilling at Ngasamo to fully define the
deposit and allow the Ngasamo resource to be substantially upgraded from the
inferred to the indicated category has been designed ready for drilling to
commence later this year.

Over the coming months, African Eagle's new financial model for Dutwa, prepared
by independent consultants Simulus, Snowden and AMEC Minproc, will be
progressively improved and used to evaluate alternative processing options such
as heap leaching; higher throughputs; production of different intermediate
products and the economic impact of using rail transport as opposed to road.

Other studies underway include a regional assessment of limestone deposits
within 200km of Dutwa, further improvements to the transport study and the
Environmental and Social Impact Assessment required for the definitive
feasibility study.


Qualified Person

Information in this report relating to Mineral Resources is based on work
completed by Richard Sulway BSc, MAppSc, MAusIMM (CP). Richard Sulway is a
member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and has
sufficient experience which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity to which he is undertaking to
qualify as a Competent Person as defined in the 2004 edition of the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves" (the JORC Code) and is hence a Qualified Person under AIM rules.
Richard Sulway is a full-time employee of Snowden Mining Industry Consultants
Pty Ltd. Richard Sulway consents to the inclusion in the report of the matters
based on his information in the form and context in which it appears.

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 30 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/p/glossary.asp


For further information on African Eagle, see the Company's web site
www.africaneagle.co.uk or contact one of the following:

Mark Parker
Managing Director
African Eagle
44 20 7248 6059
44 77 5640 6899

Jeremy Stephenson
Nicola Marrin
Seymour Pierce Limited, London
Nominated Adviser and Co-Broker
44 20 7107 8000

Guy Wilkes
Ocean Equities Limited, London
Co-broker
44 20 786 4370

Charmane Russell / Marion Brower
Russell & Associates, Johannesburg
27 11 8803924
27 82 8928052

Ed Portman / Leesa Peters
Tavistock Communications, London
44 20 7920 3150
44 77 3336 3501


Dutwa project overview

African Eagle is developing the major Dutwa nickel project in Tanzania. The
Company discovered Dutwa in 2008 and is now conducting a feasibility study.

Economic modelling in late 2010 indicated a pre-tax project NPV of US$650
million at a nickel price of $8/lb, with an estimated average cash cost of
$3.37/lb nickel. The model was based on throughput of 3 million tonnes per year
for 26 years with processing by atmospheric tank leaching to a mixed hydroxide
intermediate product, requiring estimated initial capex of $600M and yielding
life of mine earnings of $8.2bn at $8/lb nickel. The mining schedule was derived
from Whittle optimisations of block models of an October 2010 inferred mineral
resources. The financial models will be progressively improved as the
feasibility study progresses.

Mineral resources are currently 98.6 million tonnes grading 0.93% nickel and
0.02% cobalt, of which 46.2 million tonnes are in the JORC indicated category
and the remainder in the JORC inferred category. The Company believes that
further drilling will increase the total resource by up to 10Mt.

The Dutwa project consists of two nickel laterite deposits which form the caps
of two ridges about 7km apart. The current JORC mineral resources, at a 0.43%
nickel equivalent cut-off, are 98.6Mt grading 0.93% nickel and 0.02% cobalt,
containing in total 948,000 tonnes nickel metal equivalent. Of this, about half
is now in the indicated category and half in the inferred. Because the deposits
are at the surface, mining will be straightforward and strip ratios very low.
The Ni equivalent grade (NiEq) is calculated using the following formula:

NiEq = Ni [ Co * (RCo/RNi) * (PCo/PNi) ]

= Ni (Co * 1.32)

using metal prices (P) of US$10/pound Ni and US$17/pound Co, and metal recovery
factors (R) of 90% for Ni and 70% for Co, derived from metallurgical test work
conducted by African Eagle.

The Company believes that the resources can be increased by another 8Mt to 10Mt
with further drilling. There is also future upside at Zanzui, 50km to the south,
where the Company is evaluating another significant nickel laterite resource,
and at Nyawa, 15km west of Dutwa.

Metallurgical tests have shown that the nickel ores are unusually easy to
process, giving good recoveries from heap or tank leaching at atmospheric
pressure, with no need for costly high pressure acid leach (HPAL).

African Eagle currently holds a 90% interest in the eastern Wamangola deposit,
which hosts approximately 60% of the total resource, with an option to acquire
100%. The Company has signed a joint venture with the SAFINA Group of the Czech
Republic under which African Eagle will earn an interest of between 50% and 75%
in the western Ngasamo deposit by conducting and funding evaluation work. On
completion of the feasibility study, the two companies' joint venture interests
will be converted into equity in the combined project. African Eagle estimates
that it will then hold about 76% of the equity.


About African Eagle

Since discovering a major nickel oxide deposit at Dutwa in Tanzania, African
Eagle is in transition from an explorer into a nickel company. The company
completed a positive scoping study on the Dutwa deposit in July 2009 and is now
working towards a feasibility study.

In addition to Dutwa, African Eagle is also evaluating a second promising nickel
oxide at Zanzui, which is located 60 km from Dutwa. The Company holds a 49%
interest in the Mkushi Copper Mines joint venture in Zambia, for which a draft
feasibility study was completed in Q4 2008. It also holds a half million ounce
gold resource at the Miyabi project in Tanzania, and a portfolio of gold and
base metal exploration assets, including two projects in the Zambian Copperbelt.







This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.

Source: African Eagle Resources PLC via Thomson Reuters ONE

[HUG#1478652]


Unternehmen: African Eagle Resources PLC - ISIN: GB0003394813