Progress review and half year results

29 September 2011

African Eagle Resources plc

REVIEW OF PROGRESS AND RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2011

African Eagle Resources plc ("African Eagle" or the "Company", ticker AIM: AFE,
AltX: AEA) announces progress made so far in 2011 together with its financial
results for the half year to 30 June 2011.

African Eagle's Half Year Report for the period ended 30 June 2011 can be viewed
at:
http://www.africaneagle.co.uk/downloads/InterimFinancialStatements30June2011.pdf

Highlights - six months to 30 June 2011

Operations - Dutwa

* JORC compliant resource upgraded to 98.6 million tonnes
* Geotechnical studies for pre-feasibility study ("PFS") completed and mining
studies delivered
* Metallurgical and other testwork well advanced
* Identified significant capital and operating cost savings
* Bulk ore sample 2 drilling completed ahead of schedule


Financials

* The loss after tax for the 6 months to 30 June 2011 at £712,583 is £324,752
higher than for the corresponding period last year. This variance is the
result of: a one-off gain in 2010 relating to the recognition of shares in
Kibo Mining (£120,000); higher other expenditure including business
development, recruitment, legal and professional fees; and a higher share
based option charge
* Cash in hand at 30 June of £4.7 million
* Net assets increased by 34% to £20.8 million


Corporate

* Raised £3.7 million (before expenses) in January for PFS work at Dutwa
* Cobra Copper Limited ("Cobra Copper") incorporated as Zambian copper spinout
* Canaccord Genuity Limited appointed as Nominated Adviser and Broker
* Julian McIntyre joins the board representing MWB Capital, the Company's
largest shareholder


Since 30 June 2011

* Trevor Moss appointed CEO
* Dutwa mineralogical results suggest amenability to upgrading and cost
savings
* Drilling commenced to further define Ngasamo nickel resource
* Additional gold mineralised system discovered by our partner at Miyabi


The Company's Chairman, Euan Worthington commented "Since we discovered Dutwa in
2008, we have made excellent progress.  So far this year, we have upgraded half
the resource to JORC Indicated category, delivered an updated financial model,
completed drilling for the second bulk ore sample and received the mining
geotechnical report.  Our metallurgical process tests are well advanced and we
are busy drilling the final resource programme. These studies have shown us
several ways which should cut Dutwa's operating costs and improve the
economics."

For further information please see the Company's web site at
www.africaneagle.co.uk or contact one of the following:

African Eagle Resources plc
Mark Parker (Managing Director)
Euan Worthington (Chairman)
Sandra Spencer (PR Consultant)
44 20 7248 6059
44 77 5640 6899
44 75 1535 7790

Canaccord Genuity Limited
Andrew Chubb
Bhavesh Patel
44 20 7050 6500

Ocean Equities Limited
Guy Wilkes
44 20 7786 4370

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


CHAIRMAN'S STATEMENT

Dear Shareholder,

It seems like it was only yesterday that I was writing my statement for the
2010 annual report, but I am pleased to report that we have been making
excellent progress, especially towards the PFS on our headline Dutwa project.

Our key achievements since the year end have been:

* Appointment of a new CEO to take Dutwa through to production;
* Geotechnical studies for PFS completed;
* Progress on metallurgical and other testwork;
* Identifying significant capital and operating cost savings;
* Drilling completed for Bulk ore sample 2;
* In January we raised £3.7 million for PFS work; and
* Cobra Copper incorporated as Zambian copper spinout.


Board Reorganisation

As we announced earlier this month, we are very pleased to have secured the
services of Trevor Moss to lead the Company and steer development of our Dutwa
Nickel Mine. Trevor has extensive experience of mine development, with his most
recent success being the building of Nevsun Resources' Bisha Project in Eritrea.
Trevor led the team that was responsible for the construction, project
management, completion and successful start up of the Bisha mine which was
achieved under budget and ahead of schedule in a challenging operational
environment.

Mark Parker will remain on the Board of AFE and once he has handed over the
reins to Trevor, he will become Director of Corporate Development, responsible
for overseeing our joint ventures and managing and developing new nickel
opportunities.

We have also been interviewing candidates for a Finance Director as successor to
Bevan Metcalf. Working with Trevor, the new FD will manage the project financing
for the Dutwa development and an announcement will be made in due course.

In May 2011, Mr Julian McIntyre joined the Board in a non-executive capacity. A
successful entrepreneur and investor, Julian is founder and principal of MWB
Capital, a private investment company which has an 11.11% shareholding in
African Eagle.

Dutwa Nickel Project

We have seen exceptional progress at Dutwa from our discovery in 2008, via a
scoping study in mid-2009 and our resource update to almost 100 million tonnes
in January 2011, to the pit optimisation and financial model announced this
March - most mines take more than 10 years from discovery to production.

Now we are already well advanced on our feasibility study, which we hope to
complete around the end of next year.  We are currently doing a suite of lab
tests on our first 12 tonne bulk sample to work out in detail the best way to
process the ore. Additionally, we are drilling to upgrade the whole deposit to
the JORC indicated category required for the definitive feasibility study
("DFS") and have recently received the rock property tests results and
geotechnical study for the mining engineering and pit design.  Our second 15
tonne bulk ore sample is ready to be shipped for testing once analysis of the
first bulk sample has been completed. Studies of transport options and reagents
are underway and the study of social and environmental aspects of the project
will commence shortly.

One of the more exciting findings recently comes from a study by a team led by
renowned Professor Richard Herrington at the Natural History Museum in London.
This showed that the nickel bearing minerals in the ores in the Wamangola and
Ngasamo deposits are mostly fine grained and can be upgraded by simple
mechanical processes. Lab tests in Perth have since confirmed this. Upgrading
would allow more efficient leaching of the ore and lower acid consumption, which
in turn reduces the amount of sulphur to be transported from coastal ports and
lowers the required tonnages of neutralising agents, lowering operating costs.

The financial modelling completed in March indicated that the cash cost of
production from Dutwa is likely to be very competitive and that the capital
costs to develop Dutwa will be among the world's lowest for a nickel laterite
leach operation.  Nonetheless, we are working hard to find ways to reduce these
costs further, especially for reagents (sulphur and alkalis) and transport,
which together account for three quarters of expected operating costs. The
upgrading mentioned above is just one of several promising ideas African Eagle
is pursuing in this area.

Key news expected over the coming months will include the JORC resource upgrade
and the revised pit optimisation resulting from it, the metallurgical test
results and the engineering design work. As these results become available, we
will feed them into the engineering design and financial model, leading to a PFS
report expected around the end of the year and a DFS at the end of 2012.

Cobra Copper

As I noted in April 2011, we plan to raise private equity, accelerate the work
programme and then list shares in a new company holding our Zambian copper
assets. We have called this company Cobra Copper, recruited a CFO and a new
country manager and discussed the investment with a number of parties. Despite
recent turmoil in financial markets, the outlook for the copper price buoyed by
demand from China, is very positive.

Miyabi Gold Project

BrightStar Resources Limited ("BrightStar"), our partners in the Miyabi Gold
Project in Tanzania, has wasted no time getting down to work testing extensions
to the 520,000 oz JORC resource. In mid-August, BrightStar announced that it had
completed a 400-hole, 11,000m RAB drilling programme.

The drilling outlined mineralised shear zones at the granite/greenstone contact
and in splays off the contact, with good potential to host additional gold
resources. Not all the assays results have been received yet, but intersections
to date included:

* 9m @ 1.82g/t gold from 21m; and
* 6m @ 1.14 g/t gold from 18m including 3m at 2.1 g/t.

The holes were shallow, averaging 27m, and will now be followed up by deeper
reverse circulation (RC) drilling. Higher grades are expected below the depleted
oxide zone, as seen elsewhere on the project.

Plans and Milestones

Our key objective remains to complete the DFS around the end of 2012. Milestones
for the coming months are:

* Upgrade the JORC resources to indicated category;
* Complete bench-scale testwork and decide on the best processing route;
* Update the optimisation mine plan and economic model;
* Prepare PFS report;
* Begin pilot scale testwork on bulk ore sample 2; and
* Secure funding for Cobra Copper.


Euan Worthington

Chairman

Condensed Interim Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2011

    6 months to 6 months to Year to

    30 June 30 June 31 December

    2011 2010 2010

  Note Unaudited Unaudited Audited

    £ £ £



Depreciation expense   (15,961) (21,062) (41,661)

Employee benefits expense   (326,004) (211,274) (588,557)

Impairment of deferred exploration   (47,017) (14,337) (57,498)
expenditure

Share of loss in associates   (1,873) (4,920) (2,337)

Other expenses   (354,104) (256,822) (469,169)

Other income 5 - 120,000 120,000


--------------------------------------------------------------------------------
Operating loss   (744,959) (388,415) (1,039,222)



Finance income:

Bank interest receivable   7,168 19,217 28,182

Foreign exchange gain/(loss)   25,208 (18,633) (23,490)


--------------------------------------------------------------------------------
Loss before tax   (712,583) (387,831) (1,034,530)



Income tax expense   - - -


--------------------------------------------------------------------------------
Loss attributable to equity owners for   (712,583) (387,831) (1,034,530)
the period


--------------------------------------------------------------------------------
Other comprehensive (loss)/income:



Exchange differences on translation of   (536,618) 198,393 182,155
foreign operations

Available for sale investments: Fair   (110,400) 20,000 210,400
value adjustment available for sale
investments


--------------------------------------------------------------------------------
Other comprehensive (loss)/income for   (647,018) 218,393 392,555
the period


--------------------------------------------------------------------------------


Total comprehensive loss attributable   (1,359,601) (169,438) (641,975)
to equity owners for the period


--------------------------------------------------------------------------------




Loss per share:

Basic/diluted loss per share from total 3 (0.2p) (0.1p) (0.3p)
and continuing operations

Headline/diluted loss per share from 3 (0.2p) (0.2p) (0.3p)
total and continuing operations


--------------------------------------------------------------------------------

All operations are continuing.

The accompanying notes form an integral part of these condensed interim
consolidated financial statements.

Condensed Interim Consolidated Statement of Financial Position

As at 30 June 2011



  30 June 2011 30 June 2010 31 December 2010
Note
Unaudited  Unaudited Audited

    £ £ £



ASSETS



Non-current assets

Property, plant and equipment   34,468 64,753 43,578

Available for sale investments 5 220,000 140,000 330,400

Investment in associates   2,870,698 2,318,401 2,564,515

Investment in joint ventures   33,300 35,054 33,664

Deferred exploration costs 4 11,761,144 10,562,228 11,176,584


--------------------------------------------------------------------------------
Total non-current assets   14,919,610 13,120,436 14,148,741


--------------------------------------------------------------------------------
Current assets

Cash and cash equivalents   4,726,587 1,726,671 3,170,709

Other receivables   635,751 253,422 451,239



Exploration assets held for 6 1,078,634 882,148 1,098,843
sale
--------------------------------------------------------------------------------
Total current assets   6,440,972 2,862,241 4,720,791


--------------------------------------------------------------------------------
Total assets   21,360,582 15,982,677 18,869,532
--------------------------------------------------------------------------------


LIABILITIES



Current liabilities

Other payables   (562,975) (326,145) (395,253)


--------------------------------------------------------------------------------
Total liabilities   (562,975) (326,145) (395,253)


--------------------------------------------------------------------------------
Net assets   20,797,607 15,656,532 18,474,279
--------------------------------------------------------------------------------


EQUITY



Equity attributable to owners
of the parent:

Share capital   4,093,472 2,967,622 3,847,622

Share premium account   27,188,181 21,678,832 23,888,084

Merger reserve   705,723 705,723 705,723

Available for sale revaluation   100,000 20,000 210,400
reserve

Foreign currency reserve   (493,753) 59,103 42,865

Retained losses   (10,796,016) (9,774,748) (10,220,415)


--------------------------------------------------------------------------------
Total equity   20,797,607 15,656,532 18,474,279
--------------------------------------------------------------------------------

The accompanying notes form an integral part of these condensed interim
consolidated financial statements.

Condensed Interim Consolidated Statement of Cash Flows

For the six months ended 30 June 2011



6 months 6 months to 30 Year to 31
June 2010 December 2010
 to 30 June 2011
Unaudited Audited
Unaudited

  Notes £ £ £



Operating activities

Loss before taxation   (712,583) (387,831) (1,034,530)

Adjustments for:

Depreciation   15,961 21,062 41,661

Exchange gain   (953) (391) (1,115)

Loss on disposal of   - 238 423
property, plant and
equipment

Interest received   (7,168) (19,217) (28,182)

Impairment of deferred   47,017 14,337 57,498
exploration expenditure

Share-based payments   136,982 35,762 236,794

Share of loss in   1,873 4,920 2,337
associate venture

Increase in other   (196,800) (128,027) (326,205)
receivables

Increase in other   74,794 24,523 2,043
payables

Share of joint venture   368 (460) 975
loss/(gain)

Recognition of 5 - (120,000) (120,000)
investment in a listed
company


--------------------------------------------------------------------------------
Cash flows from   (640,509) (555,084) (1,168,301)
operating activities


--------------------------------------------------------------------------------
Investing activities

Payments to acquire   (8,014) (1,467) (1,961)
property, plant and
equipment

Payments for deferred   (940,115) (911,600) (1,800,872)
exploration expenditure

Interest received   7,168 19,217 28,182

Investments in   (400,987) (119,935) (270,436)
associates

--------------------------------------------------------------------------------


Cash flows used in   (1,341,948) (1,013,785) (2,045,087)
investing activities


--------------------------------------------------------------------------------


Financing activities

Proceeds from issue of   3,545,947 - 3,089,252
share capital (net of
issue costs)


--------------------------------------------------------------------------------
Cash flows from   3,545,947 - 3,089,252
financing activities


--------------------------------------------------------------------------------
Net increase/(decrease)   1,563,490 (1,568,869) (124,136)
in cash and cash
equivalents

Cash and cash   3,170,709 3,293,014 3,293,014
equivalents at beginning
of year

Exchange gain/(loss)   (7,612) 2,526 1,831


--------------------------------------------------------------------------------
Cash and cash   4,726,587 1,726,671 3,170,709
equivalents at end of
year
--------------------------------------------------------------------------------

The accompanying notes form an integral part of these condensed interim
consolidated financial statements.

Condensed Interim Consolidated Statement of Changes in Equity

For the six months ended 30 June 2011
    Share Share Merger Available Foreign Retained Total
for sale
capital premium reserve currency losses attributable
revaluation to
account reserve
reserve owners

Unaudited

    £ £ £ £ £ £ £

Balance at 1   2,967,622 21,678,832 705,723 - (139,290) (9,422,679) 15,790,208
January 2010
--------------------------------------------------------------------------------------------
Loss for   - - - - - (387,831) (387,831)
period

Exchange   - - - - 198,393 - 198,393
differences
on
translation
of foreign
operations

Available for   - - - 20,000 - - 20,000
sale
investments
--------------------------------------------------------------------------------------------
Total   - - - 20,000 198,393 (387,831) (169,438)
comprehensive
loss  for the
period
--------------------------------------------------------------------------------------------
Transactions
with equity
owners for
the first
half of 2010:

Share based   - - - - - 35,762 35,762
payments
--------------------------------------------------------------------------------------------
Total   - - - - - 35,762 35,762
transactions
with equity
owners
--------------------------------------------------------------------------------------------
Balance at   2,967,622 21,678,832 705,723 20,000 59,103 (9,774,748) 15,656,532
30 June 2010
--------------------------------------------------------------------------------------------
Loss for   - - - - - (646,699) (646,699)
period

Exchange   - - - - (16,238) - (16,238)
differences
on
translation
of foreign
operations

Available for   - - - 190,400 - - 190,400
sale
investments
--------------------------------------------------------------------------------------------
Total   - - - 190,400 (16,238) (646,699) (472,537)
comprehensive
loss  for the
period
--------------------------------------------------------------------------------------------
Transactions
with equity
owners for
the second
half of 2010:

Issue of   880,000 2,420,000 - - - - 3,300,000
share capital

Share issue   - (210,748) - - - - (210,748)
costs

Share based   - - - - - 201,032 201,032
payments
--------------------------------------------------------------------------------------------
Total   880,000 2,209,252 - - - 201,032 3,290,284
transactions
with equity
owners
--------------------------------------------------------------------------------------------
Balance at   3,847,622 23,888,084 705,723 210,400 42,865 (10,220,415) 18,474,279
31 December
2010
--------------------------------------------------------------------------------------------
Loss for   - - - - - (712,583) (712,583)
period

Exchange   - - - - (536,618) - (536,618)
differences
on
translation
of foreign
operations

Available for   - - - (110,400) - - (110,400)
sale
investments
--------------------------------------------------------------------------------------------
Total   - - - (110,400) (536,618) (712,583) (1,359,601)
comprehensive
loss  for the
period
--------------------------------------------------------------------------------------------
Transactions
with equity
owners for
the first
half of 2011:

Issue of   245,850 3,499,575 - - - - 3,745,425
share capital

Share issue   - (199,478) - - - - (199,478)
costs

Share based   - - - - - 136,982 136,982
payments
--------------------------------------------------------------------------------------------
Total   245,850 3,300,097 - - - 136,982 3,682,929
transactions
with equity
owners
--------------------------------------------------------------------------------------------
Balance at   4,093,472 27,188,181 705,723 100,000 (493,753) (10,796,016) 20,797,607
30 June 2011
--------------------------------------------------------------------------------------------
The accompanying notes form an integral part of these condensed interim
consolidated financial statements.

Notes to the Condensed Interim Consolidated Financial Statements

For the six months ended 30 June 2011

1          Nature of Operations and General Information

African Eagle Resources plc ("African Eagle" or the "Company") is a public
limited company incorporated and domiciled in England and is listed on the AIM
market of the London Stock Exchange and the Alternative Exchange of the
Johannesburg Stock Exchange Limited (AltX). African Eagle is a holding company
of a mineral exploration and development group of companies (the "Group"). The
Group is focused on becoming a nickel producer and is currently undertaking a
pre-feasibility study on its Dutwa Nickel project in Tanzania.

The Company has prepared its unaudited condensed consolidated financial
statements on a going concern basis which assumes that the Company will be able
to realise assets and discharge liabilities in the normal course of business. At
June 30, 2011 the Company had cash and cash equivalents of £4.7 million. The
directors believe that the current funds will be sufficient to finance the
completion of the PFS and general working capital.
African Eagle's unaudited condensed consolidated half year financial statements
("Financial Statements") are presented in pounds sterling (£), which is also the
functional currency of the parent company. The Financial Statements were
approved for issue by the Board of Directors on 26 September 2011.

2    Statement of Compliance and basis of preparation

The Financial Statements are for the six months ended 30 June 2011.  They do not
include all the information required for full annual financial statements and
should be read in conjunction with the audited consolidated financial statements
of the Group for the year ended 31 December 2010, which were prepared under
International Financial Reporting Standards ("IFRS") as adopted by the European
Union ("EU").

The financial information is prepared under the historical cost convention and
in accordance with the recognition and measurement principles contained within
IFRS as endorsed by the EU.

The comparative amounts in the Financial Statements include extracts from the
Company's consolidated financial statements for the year ended 31 December
2010. These extracts do not constitute statutory accounts within the meaning of
Section 435 of the Companies Act 2006.

3          Loss Per Share

 (a) Basic loss per share

The calculation of basic loss per share is based on the loss for the period
divided by the weighted average number of shares in issue during the period. In
calculating the diluted loss per share potential ordinary shares such as share
options and warrants have not been included as they would have the effect of
decreasing the loss per share. Decreasing the loss per share would be anti-
dilutive.

Loss per share 30 June 30 June 31 December

2011 2010 2010

£ £ £

Loss for the period (712,583) (387,831) (1,034,530)

Weighted average number of shares in issue 405,960,448 296,762,128 318,942,950

Basic & diluted headline loss per share (0.2p) (0.1p) (0.3p)



Notes to the Condensed Interim Consolidated Financial Statements

For the six months ended 30 June 2011

(b) Headline loss per share

Headline loss per share has been calculated in accordance with the South African
Institute of Chartered Accountants Circular 3/2009 - Headline Earnings. Circular
3/2009 is effective for interim and/or annual financial periods ending on or
after 31 August 2009.

The calculation of headline loss per share is based on the headline loss for the
year divided by the weighted average number of shares in issue during the year.
No diluted headline loss per share has been calculated as it would be
antidilutive by reducing the headline loss per share.

    30 June 30 June 31 December

    2011 2010 2010

    £ £ £



Loss for the period   (712,583) (387,831) (1,034,530)

Adjusted for:

  Plus loss on sale of fixed assets   - 238 423

  Plus impairment of deferred exploration   47,017 14,337 57,498
assets

  Plus Group share of associated loss   1,873 4,920 2,337

  Plus/(Less) Group share of Joint Venture   368 (460) 975

  Less Recognition of investment in a   - (120,000) (120,000)
listed company
--------------------------------------------------------------------------------


Headline loss   (663,325) (488,796) (1,093,297)
--------------------------------------------------------------------------------


Weighted average number of shares in issue   405,960,448 296,762,128 318,942,950

Basic and undiluted headline loss per   (0.2p) (0.2p) (0.3p)
share




4    Deferred Exploration

  30 June 30 June 31 December

  2011 2010 2010

  £ £ £



Cost:

At 1 January 11,176,584 10,261,104 10,261,104

Foreign currency exchange differences (387,441) 308,119 201,181

Additions 1,019,018 889,490 1,870,640

Assets held for sale - (882,148) (1,098,843)

Impairment charge (47,017) (14,337) (57,498)


-------------------------------------------------------------------------------
Balance at the period end 11,761,144 10,562,228 11,176,584


-------------------------------------------------------------------------------

Notes to the Condensed Interim Consolidated Financial Statements

For the six months ended 30 June 2011

5    Available for sale investments

  30 June 30 June 31 December

  2011 2010 2010

  £ £ £

Cost:

Balance brought forward 330,400 - -

Investments during the period - 120,000 120,000

Adjustment to fair value (110,400) 20,000 210,400


-------------------------------------------------------------------
Balance at the period end 220,000 140,000 330,400



Investment in listed companies at 30 June 2011 represents the Company's 2.12%
interest in Kibo Mining, a AIM listed explorer (ticker: KIBO). This investment
was received in respect of compensation arising from the termination of a joint
venture between the Company and Sloane Developments Limited (a wholly owned
subsidiary of Kibo Mining). Available for sale assets in the 30 June 2010
Accounts, included the Igurubi gold project in Tanzania (£882,148), which has
been reclassified as assets held for sale.

6     Assets held for sale

  30 June 30 June 31 December

  2011 2010 2010

  £ £ £

Cost:



Balance brought forward 1,098,843 - -

Foreign currency exchange (loss)/gain (37,225) - -

Transfer from deferred exploration costs - 882,148 1,098,843

Additions 17,016 - -


------------------------------------------------------------------------------
Balance at the period end 1,078,634 882,148 1,098,843





This relates to African Eagle's Igurubi gold project in Tanzania and uranium
projects in Tanzania, Zambia and Mozambique. The Company has agreed terms for
Peak Resources (Ticker: ASX: PEK) to acquire the Company's 75% interest in
Igurubi. The delay in completing the deal is down to non-receipt of the licence
due to administrative delays at the Ministry of Mines. In November 2010 the
Company announced it had vended its uranium division to Jacana Resources Limited
a privately owned Australian company in return for cash and shares. Jacana is
progressing with its due diligence. An update on both agreements is expected
shortly.


7     Events after the balance sheet date

On 1 July 2011 the Company announced that employees had exercised 239,000 share
options at an exercise price of 6.5 pence.

On 1 August 2011 the Company announced that it had granted 4,996,000 share
options to employees at an exercise price of 10 pence, being 19.3% above the
closing price of the Company's shares on 29 July 2011. None of the options were
granted to directors.







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#1550666]


Unternehmen: African Eagle Resources PLC - ISIN: GB0003394813