African Eagle Resources plc : Audited Financial Results for year end 2012

African Eagle Resources plc (the "Company") (AIM: AFE; AltX: AEA) today
announces its results and the publication of its 2012 Annual Report and
Financial Statements for the year ended 31 December 2012.  This is being posted
to shareholders today and will be available on the Company's website shortly:
www.africaneagle.co.uk.

Chairman's Statement

2012 was a year of significant progress for the Company and the Dutwa project,
and in technical and commercial terms Dutwa has been significantly de-risked.
However, more recently in 2013 the Company has not been able to secure the
additional funding needed to advance its development programme in Tanzania as it
had planned.  While the Company considers Dutwa to be a strong and competitive
nickel project, in the absence of further funding from the capital markets we
took the decision in Q1 2013 to suspend project activities and thereafter to
consider further funding requests from the Company's Tanzanian subsidiaries on a
case by case basis.  Following this decision, the Company is now seeking to make
a partial or total sale of these assets.  These are challenging times however,
and there can be no guarantee that any value can be achieved for these assets.
 This Statement therefore covers both our achievements in the year and also
describes the Company's strategy in the light of the difficult situation I have
outlined above.

In July, 2012, Ambassador Paul Rupia joined the Board as a Non-Executive
Director. Paul is a former head of the Tanzanian Civil Service. He has brought
to the Board an intimate knowledge of Tanzania, and his advice has been
invaluable to all of us in African Eagle.

Test work performed on the Dutwa laterite ore identified the very favourable
impact of ore beneficiation on the metallurgical performance of Dutwa. The
results of the additional work, described in more detail in the Operations
Overview, improved the overall viability of Dutwa and defined an opportunity for
further exploration relating to potential for sulphides hosting nickel and
platinum group elements below the laterite resource. Despite this strong
progress, events subsequent to the year-end in capital markets, the mining
industry in general and the nickel sector in particular have meant that the
Company is unable to continue to fund the completion of the Dutwa Bankable
Feasibility Study (the "BFS") as planned even though considerable efforts have
been expended to engage a strategic investor which would be able to take the
project forward.

The Company raised £12,651,399 in new capital in 2012.  A subscription by the
IFC closed in the first quarter and in the second quarter further capital was
received from a placement and open offer.  While substantial, the Company
recognised that the capital raised was not sufficient to enable the Company to
complete the BFS as planned.  However, and with the resources available very
good progress was achieved on progressing the BFS with de-risking occurring in
many key areas including metallurgy, logistics and reagent supply and social and
environmental.  The remaining work to complete the BFS essentially comprises
large scale continuous pilot plant test work and detailed engineering sufficient
for capital and operating cost estimates with a nominal accuracy of 15%, and the
further development of commercial contract negotiations relating to logistics,
major equipment items and other key services.

Given that the cost of this further work is beyond the financial resources of
the Company, and that the current state of financial markets is such that the
Company cannot raise new funds to cover this activity, the Company retained
Cutfield Freeman & Co to assist in the search for a strategic partner to take a
majority position in the Dutwa project in return for funding the remainder of
the BFS and underwriting eventual project development financing arrangements. In
the currently depressed market and with the outlook for commodities we have not
been able to secure a strategic partner on this basis.

In April 2013, the Company announced that the Tanzanian Revenue Authority
("TRA") had undertaken a review of the previous tax filings of one of the
Company's Tanzanian subsidiaries. The Tanzanian subsidiary and its advisers have
recently been in further discussions with the TRA and have received
communication from the TRA outlining its initial view of the liability for the
period up to 31 December 2012. In the consolidated financial statements the
Company has fully provided its own estimate, approximately £600,000, to support
the potential liability of the subsidiary concerned. Whilst no formal tax demand
from the TRA has yet been received, the Directors of the Tanzanian subsidiary,
advised by the Company and its tax and legal advisers, will continue to discuss
the matter with the TRA in the hope that this matter can be brought to a
satisfactory close as expeditiously as possible. However, neither the Tanzanian
subsidiary nor the Company can forecast the level of any potential tax
assessments or tax liabilities with certainty and there can be no assurance that
the Tanzanian subsidiary will not be subject to a materially different value in
any assessment it may receive.

Following a review of the Company's strategy in early 2013, taking into account
the factors noted above, your Directors determined that the Company needed to
take immediate action to preserve the Company's cash position, and take the
steps necessary to retain the main licences related to the Company's nickel
assets, but that it could no longer provide funding to its Tanzanian subsidiary,
Red Hill Nickel Limited ("RHN"), the main operating entity for the Dutwa
project. The Board decided to progress three initiatives:

* To continue to seek a purchaser for the Dutwa assets, with the consideration
being in cash and/or a carried interest;
* To recover any value possible from the Miyabi JV and other non-Dutwa assets
via a sale of our interest for cash or equity; and
* To maintain the AIM-listed plc with a view to seeking new investment
opportunities in the natural resources and related sectors, thereby
retaining a possibility of securing some upside for shareholders.

An alternative, formally liquidating the Tanzanian assets and proposing to
return any residual cash in the Company to shareholders via a Members' Voluntary
Liquidation was rejected for two reasons. Firstly the residual cash in the plc
after closing out all business issues and the cost of liquidation was considered
unlikely to be significant in terms of cash per share. Secondly, the Board's
opinion following discussions with major shareholders was that a transaction
involving injection of new assets into the Company, whilst not quantifiable now,
could, if achieved, potentially offer greater value for shareholders.

The outcome remains uncertain in the absence of firm offers for the Company's
Tanzanian assets, and Directors are unable to estimate with any certainty
whether assets will be sold as a whole or in part, the timing of any sale, or
quantify the proceeds that may be receivable. In the absence of an orderly
realisation, further adjustments might have to be made and these could include,
but may not be limited to, the write down of assets and the inclusion of further
liabilities. The extent of such write-downs and liabilities might be higher if
the assets and liabilities had to be realised in a short timescale. For this
reason the Board has decided to prepare the consolidated financial statements on
a basis other than that of a going concern. The Board, however, continues with
its efforts to secure value from its investments in Tanzania, and to reduce
costs to an absolute minimum whilst doing so.

Finally, I would like to take this opportunity to express my and my fellow
Directors' appreciation for the hard work and dedication of our staff in
Tanzania and in London. It is very disappointing that, despite their efforts and
their talent, current market conditions mean that the Company may be unable to
see their plans fulfilled.

Chris Pointon
Chairman
12 June 2013

Operations Overview

Nickel Assets - Dutwa
2012 commenced with significant optimism regarding the development of the
Company's flagship nickel project in Tanzania - Dutwa.  It concluded with the
confirmation that Dutwa is a world-class nickel laterite project with properties
and potential at the leading edge of the nickel industry. Significant progress
was achieved with the development of Dutwa and in reorganising, stabilising and
focussing the Company in general.  A small team of dedicated staff worked
diligently and very efficiently throughout the year to achieve significant
results.

Despite the challenges of the nickel market and its poor commodity price
performance the mining industry overall remained robust in 2012.  In the first
month of the year the Company was able to complete the development of its BFS
team with the appointment of Aidan Schoonbee as Project Director.  Aidan brought
to the Company a depth of experience in project management and as an experienced
metallurgist was well positioned to join our project metallurgist Dr. Chad
Czerny in the BFS development.  Concurrent with Aidan's appointment the Company
engaged the services of Lycopodium Minerals as the BFS engineer.  This
appointment completed the core consulting BFS team and enabled a strong group to
be established to complete the BFS and the associated environmental and social
impact assessment (the "ESIA") being managed by Citrus Partners.  Working
together the project team embarked on the performance of all requisite studies
and the preparation of all the documentation required to confirm the economic
viability of the project and to apply for the mining licence required for the
development of Dutwa.

Concurrent with the commencement of the detailed activities of the BFS the
Tanzanian based exploration team were completing the diamond drilling for the
resource upgrade on the Dutwa hills.  Thereafter, the drilling for the 60t of
metallurgical core samples for use in the BFS pilot plant was performed.

As a result of the exploration drilling performed during 2012, under direction
of Exploration Manager Mark Davey, Snowden Mining Consultants of Perth Australia
("Snowden") prepared updated resource estimates with the gross Dutwa resources
expanding by 13% to 107Mt reported above a 0.55% Ni cut off grade while the
Indicated resource increased 108% to 101Mt with a total metal content at almost
1Mt of nickel.  The resource definition confirmed the unusually favourable
mineralogy of Dutwa defining the resource as having a high silica content at
~65% (silica is inert to acid) and only ~12% iron oxides.

The metallurgical performance of this favourable resource mineralogy was subject
to extensive test work throughout the year as a part of the BFS development.  A
significant programme of beneficiation batch test work performed in laboratories
in Perth, Australia, demonstrated that the majority of the ores particularly the
"ferruginous siliceous" respond well to straightforward low energy wet scrubbing
and screening at a coarse grain size which rejects a significant proportion of
the silica while retaining the majority (>70%) of the nickel.  Indeed over 50%
of the run-of-mine ore feed is typically rejected by this scrubbing resulting in
a plant throughput rate less than half that originally anticipated, for the same
nickel output. For "ferruginous siliceous" ores the run-of-mine nickel grade
(~0.9-1% Ni) is increased to between 1.7 and 1.8% Ni typically. Moreover, the
scrubbing results in partial removal of some detrimental, acid consuming
elements. The result of which is that the resultant ore feed to the
hydrometallurgical process plant performs more favourably in the leach
 resulting in a lower acid (and other reagent) demand compared to the run-of-
mine ore.  The impact of this on the project overall is a reduction in the
relative capital cost of the project per unit of nickel output (lower throughput
rate results in a smaller plant) and a reduction in operating cost (less reagent
consumption due to the lower acid demand and lesser levels of impurities
requiring removal) with both the requirements for sulphur importation and
limestone significantly reduced.

The reduction in the requirements for these key reagents in turn reduces the
demand for transportation into the project.  Transportation was also the subject
of significant evaluation during the year.  Specialist rail engineers with
significant experience in the transport of large quantities of coal on the
narrow gauge systems in eastern Australia (Lycopodium Rail) reviewed the
existing rail systems in Kenya and Tanzania.  Kenya is a viable option for
transport in conjunction with barge transport on Lake Victoria.  The project is
located within 25 km of the lake and an existing lake port in Kenya at Kisumu is
connected directly by rail to the port of Mombasa.  While the Kenyan rail system
offers opportunity it is the Tanzanian system that presently provides the best
transport option for Dutwa.

The Tanzanian Central Line connects the main Tanzanian port of Dar es Salaam to
Mwanza and passes within just 70km of the Dutwa project.  In its current
condition engineers consider that the Central Line has the capacity to support
the project with only limited work.  The Dutwa project would require transport
of up to 1.25Mt per annum; importantly, the existing spare capacity is estimated
to be substantially in excess of that. The World Bank is working with the
government of Tanzania to expand the capacity of the Central Line over a
significant portion of its length toward Dutwa to a level of capacity well
beyond the requirements of the project.  The World Bank has indicated that the
proposed upgrade project is scheduled for completion before Dutwa would be
brought into operation.  What is currently missing from the existing Central
Line is reliable rolling stock.  The planned World Bank project would provide a
certain rolling stock fleet but the Company determined that this capacity was
not sufficient to improve the confidence in the project and sought opportunities
with the government to develop a framework whereby privately owned and run
trains could be operated on the public infrastructure.  To this end the Company
developed a Memorandum of Understanding ("MoU") with the Tanzanian Ministry of
Transport and its associated rail and other port agencies.  The MoU was
developed in 2012 and executed in 2013, albeit no further development will be
undertaken by the Company.

Employing data from the metallurgical results described above Snowden prepared
early mine plans from the resource block models including mine production
schedules for use in cost planning and economic analyses.  Such schedules were
developed on a block-by-block basis to a level of detail usually only performed
during development stages beyond normal BFS work.  This activity significantly
improves the forecast performance of the project overall.

Reagent studies also advanced significantly during the year.  A large high
quality resource of limestone offering many years of life is currently in
production close to the coast and immediately adjacent to a spur of the Central
Line.  The central rail system enables this to be a potentially reliable source
for the limestone that the project requires.  Additional resources closer to the
Dutwa project in the nearby Shinyanga region have also been investigated as a
means to reduce the transportation requirements.  A sulphur market study
identified that significant raw sulphur production will commence in the Middle
East in the next year or two as by-product from sour gas projects already under
development.  Such production would provide multiples of the quantity required
to support the operation of a sulphuric acid-based atmospheric leach plant at
Dutwa.  The UAE sulphur source is well situated geographically for supply to the
port at Dar es Salaam thereby minimising transport costs.

All of these elements individually provide significant benefits to Dutwa, but
the resulting combination is much greater than the simple sum of the parts.  The
quality of the Dutwa project in the nickel laterite industry has been greatly
enhanced by the work performed to date on the BFS. Despite the significant
reduction in the price of nickel compounded by an increase in transport and
reagent pricing relative to the Scoping Study, the BFS optimisation has resulted
in the mitigation of numerous adverse market conditions. Internal Company-
developed operating cost estimates taking into account all of these BFS
developments, confirmed that  Dutwa will be a low cost laterite producer and
would be cash positive under all currently forecast floor prices for nickel.

Metallurgical continuous pilot plant test work and the resultant definitive BFS
engineering planned for performance in 2013 has ceased due to the lack of
available funding required to continue.

In conjunction with the BFS there have been extensive development activities
related to the baseline studies for the ESIA.  All standard environmental
baseline activities have been completed with greater than a year of data
accumulated and assessed. Data for more than one rainy season has been obtained
ensuring a robust and world class ESIA basis.  Social activities progressed
significantly concurrently with the environmental work.  Social studies included
health, socio-economic and land ownership studies combined with early skills
assessments directed toward predicting the available labour pool and training
programmes.  All ESIA work was performed to IFC performance standard 2012 and
activities were reviewed frequently by the IFC.

The tight capital markets and the long understood requirement that Dutwa would
need a strategic partner to ensure effective development resulted in the Company
appointing Cutfield Freeman and Co Ltd. as financial adviser for the development
of Dutwa. Significant efforts were directed toward discussions with the large
nickel producers and other potential parties. Although several large companies
expressed interest in Dutwa recognising its superior mineralogy and strategic
location, the global challenges currently being faced by the wider nickel
industry and commodities generally has meant that no potential strategic
partners have committed to the project.

In addition to the work performed on the known laterite resource a review of
work performed previously identified the potential for nickel sulphide and PGE
mineralisation existing below the lateritic caps of the two main hills. The data
from drill holes conducted over the many years of work at Dutwa was re-evaluated
and nickel sulphide mineralisation with promising nickel and PGE grades was
identified in a number of the short tails of holes drilled for the purpose of
the defining the laterite resource.  Exploration of the sulphide potential at
Dutwa was identified in early 2013 as a key activity to be performed concurrent
with the strategic partner search for the laterite.  Unfortunately, the appetite
of capital markets to support earlier stage exploration projects is very subdued
at present and these activities have not occurred.

Nickel Assets - Zanzui
Zanzui is cluster of licences comprising a large (140km2) area about 50km south
of Dutwa.  The main area of mineralisation is related to in a mafic/ultramafic
ring complex of about 75km2. Laterite resource drilling performed during 2008
and 2010 was provided to Snowden, which developed a maiden resource for Zanzui
of 27Mt at 0.81% nickel and 0.06% cobalt.  The mineralisation at Zanzui is
considered similar to that of Wamangola, the most favourable hill at Dutwa, and
is potential feed to the Dutwa project during the later stages of its operation
life.

Like Dutwa the potential for nickel and PGE sulphide mineralisation was also
identified at Zanzui. Revision of work, including drilling, by the United
Nations Development Programme and the Company confirmed the presence of sulphide
mineralisation with values of Ni and PGEs. Perhaps more exciting has been the
re-appraisal of early drill holes by the Company at Dutwa, where nickel
sulphides with grades in excess of 0.5% Ni have been observed in reverse
circulation drill cuttings. Although the intersections are few, they are at
shallow depth (less than 100m vertical) and appear to conform to a zone within
the ultramafic complex. Exploration programmes for Zanzui have been developed
but their execution is dependent upon the availability of funding.

Gold Assets - Tanzania
Miyabi - The Company continued its Joint Venture with Rift Valley Resources of
Perth WA on its Miyabi gold project, also in Tanzania, with Rift Valley
Resources (RVR), an ASX listed Australian company, whereby RVR could earn a 50%
interest in the project by continuing exploration, and a further 25% by
completing a Bankable Feasibility Study. In May 2013, the Company was able to
confirm that the 50% threshold had been achieved. During 2012 RVR completed more
than 11,000m of drilling at Miyabi identifying two new mineralised zones beyond
the extents of the current resource.   Some encouraging intersections were
reported including 18m at 18.3g/t gold and 12m at 21.6g/t gold.

Igurubi - a prior pending JV agreement established in 2010 did not close as
certain conditions were not achieved in the time period established.  The
Company commenced the search for an alternative investor and/or earn-in partner.
Little work was performed at Igurubi during 2012.

Msasa - Little work was performed at Msasa during 2012 and the Company commenced
efforts to search for an investor and/or earn-in partner for Msasa.

Copper Assets - Zambia
The Company's copper assets in Zambia were sold to Elephant Copper in July 2012
and the sale closed in November.  Despite challenging market conditions the
Company was able to identify and foster good interest in the Zambian copper
assets.  As a result of the transaction the Company holds a 21% interest in
Elephant Copper, a private company managed from South Africa.

We believe that inherent value remains in the Company's assets in Tanzania and
in particular the Dutwa project and the intellectual property that has been
developed for it to date under the BFS.  Accordingly the Company continues to
examine strategies to realise this value.  However, due to the lack of firm
offers, and the minimal cash reserves the Company has taken a decision to write
down the value of these assets to nil with the exception of our listed
investment in Kibo Mining Plc.

Trevor Moss
Director and Chief Executive Officer
12 June 2013

Financial and Risk Review

As set out in the Directors' Report and note 2(a) to the financial statements
the Company has adopted the break up basis of accounting for the year ended 31
December 2012 for the consolidated financial statements. As a consequence the
loss before taxation attributable to owners of the parent of £28,935,734 (2011:
£2,960,124) is significantly impacted by asset impairment charges of £25,366,967
(2011: £1,640,836) reflecting the Directors' evaluation of assets' realisable
value. Employee benefits and other expenses were £1,701,750 higher in 2012 than
2011 due principally to additional employees and Directors during the year. The
loss per share increased from 0.6 pence in 2011 to 4.7 pence in 2012.

Statement of financial position
On a break up basis cash and other liquid assets have been measured at fair
value at 31 December 2012. Capitalised costs and other assets where no value is
expected to be recovered have been written off.  Liabilities include
management's best estimate of amounts due to the Tanzanian Revenue Authorities
as set out in note 29.  On this basis net assets declined to £1,696,562 in 2012
compared to £18,953,784 in 2011.

Cash flow
Net cash increased over the year to £3,645,458 at 31 December 2012 compared to
£2,285,347 at 31 December 2011. £12,202,857 after expenses was raised by share
issuance during the year (2011: 3,561,325), of which £7,994,499 (2011:
£3,445,546) was used in investing activities, principally in relation to
preparing for the Dutwa Bankable Feasibility Study, and £2,837,194 (2011:
£999,651) in operations.

Key performance indicators
The Board of African Eagle monitors relevant KPIs on a monthly basis as follows:

Financial KPIs
* Total expenditure burn rates;
* Monthly cash flow budget comparisons
* Annual budget and reforecast reviews
Non-financial KPIs
Health and safety - number of reported incidents. There were no serious
incidents reported during the year;

Risk review
The risks inherent on the break up basis of accounting at 31 December 2012 have
been reviewed by the Board. The principal risks are detailed below.

Liquidity risk
Liquidity risk is the risk of running out of working and investment capital.
Such risk is further discussed in the Chairman's Statement and Operations
Overview on pages 2 to 4. Key sensitivities are discussed in the basis of
preparation note 2(a).

Taxation and other legislation
The Tanzanian Revenue Authority ("TRA") had undertaken a review of the previous
tax filings of one of the Company's Tanzanian subsidiaries. The extent and risks
relating thereto are set out in note 29 in the accompanying financial
statements.

Licence risk
Permits and other authorisations and/or such concessions, rights, licences,
permits and other authorisations may be suspended, terminated or revoked prior
to their expiration in light of the company preparing accounts on a break up
basis, and limiting the funding of its Tanzanian subsidiaries.

Trevor Moss
Chief Executive Officer
12 June 2013

Report of the Directors

To the members of African Eagle Resources plc, Company number 3912362

The Directors present their report together with the audited consolidated
financial statements for the year ended 31 December 2012.

Business review
A review of the Group's trading during the year and future developments is
contained in the Chairman's Statement and the Operations Overview as set out on
pages 2 to 4.

The Group's financial and non-financial indicators are set out in the Financial
and Risk Review on page 5. There was a Group loss after taxation for the year of
£28,935,734 (2011: £2,960,124).  The Directors do not recommend the payment of a
dividend.

Going Concern - consolidated financial statements
Financial statements are normally prepared on a going concern basis unless there
is a reason to depart from this basis.  The Company announced on 15 May 2013,
that the Directors were taking immediate steps to minimise costs and preserve
the Company's cash position, and were undertaking a restructuring in order to
examine strategies for realising value from the Group's assets.  Furthermore the
Company is currently exploring options, as set out in the Chairman's Statement,
to dispose of assets as a means to provide funding for the restructured group
which, if successful, would result in African Eagle Resources plc being
maintained as an AIM-listed plc with a view to an opportunistic transaction in
the next 6-12 months.  In the event that no transaction is concluded or
additional funding secured then the Company would be liquidated.

Given both the lack of availability of funding and a viable restructuring plan,
capable of execution at the present time, the Directors consider it
inappropriate to prepare the consolidated financial statements on a going
concern basis, and therefore the Directors have prepared  these Accounts on a
break-up basis as set out in note 2.

The effect of preparing the consolidated financial statements on a break-up
basis is that all group assets and liabilities have been restated to their
estimated recoverable value as at 31 December 2012:

* cash and other liquid assets have been measured at fair value at 31 December
2012;
* capitalised costs and other assets where no value is expected to be
recovered have been written off; and
* liabilities are only recognised if an obligation exists at the balance sheet
date.
Going Concern - Parent Company
The Directors consider that the Company has adequate financial resources to
continue in operational existence, subject to satisfactory conclusion to some
inherent uncertainties, including the ability of the Company to secure a
strategic partner or generate funds through the sale of subsidiary companies
assets. These matters represent material uncertainties that may cast significant
doubt on the Company's ability to continue as a going concern. Nonetheless, the
Directors consider it is appropriate to continue to adopt the going concern
basis of accounting in preparing the Parent Company financial statements, as set
out in note 2(a).

Directors
The Directors in office during the year and current at the date of this report
are listed below. The interests of the Directors in the shares of the Company at
31 December 2012 or the date of resignation, and 31 December 2011 were as
follows:

-------------------------------------------------------------------------------
    As at 31 December As at 31 December
2012 2011

    Ordinary Shares Options Ordinary Options
Shares
-------------------------------------------------------------------------------
Chris 26/01/2012 750,000 150,000 - -
Pointon (Appointed)

Trevor Moss 01/12/2011 1,187,500 6,000,000 - -
(Appointed)

David 02/07/2012 - 3,000,000 - -
Newbold (Appointed)
31/03/2013(Resigned)

Don Newport 26/01/2012 - - - -
(Appointed)

Julian 28/04/2011 78,530,761 - 46,030,761 -
McIntyre (Appointed)

Paul Rupia 27/07/2012 - 150,000 - -
(Appointed)

Robert 20/06/2012 - 262,000 - 262,000
McLearon (Appointed)
02/07/2012 (Resigned)

Mark Parker 24/04/2012 (Resigned) 4,563,967 3,676,328 4,563,967 3,676,328

Christopher 24/04/2012 (Resigned) 1,047,165 3,504,618 1,047,165 3,504,618
Davies

Andrew 01/12/2011 182,500 3,000,000 - 3,000,000
Robertson (Appointed)
07/06/2012 (Resigned)

Euan 24/04/2012 (Resigned) 1,193,333 2,205,824 1,193,333 2,205,824
Worthington

Geoffrey 04/04/2012 (Resigned) 975,967 1,637,230 975,967 1,637,230
Cooper

Bevan 25/11/2011 (Resigned)     260,833 1,931,000
Metcalf
-------------------------------------------------------------------------------
Total   88,431,193 23,586,000 54,072,026 16,217,000
-------------------------------------------------------------------------------

Substantial shareholdings
As at 31 May 2013, the only holdings of 3% or more in the issued share capital
are:

-------------------------------------------------------------------------------
  Shares in the Company Approximate % of the
Company's issued share
capital(1)
-------------------------------------------------------------------------------
Allard Services Ltd 78,530,761 11.32%

International Finance
Corporation 78,009,570 11.24%

Anglo Pacific Group Plc 30,550,000 4.40%

Barclays Wealth 29,916,569 4.31%

TD Waterhouse (Europe) Ltd 28,421,364 4.10%

Vestra Wealth LLP 27,225,678 3.92%

Salkeld Investments Ltd 25,675,000 3.70%

Intervantage Investments 25,000,000 3.60%

Hargreaves Lansdown Asset
Management 22,479,564 3.24%

Halifax Share Dealing
Services 21,378,327 3.08%
-------------------------------------------------------------------------------

(1) Based on 694,014,407 shares issued and outstanding at 31 May 2013
Directors' remuneration
Directors' emoluments are shown in note 8.

Directors' responsibilities for the financial statements
The Directors are responsible for preparing the Annual Report and Accounts in
accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare financial
statements in accordance with International Financial Reporting Standards
("IFRSs") as adopted by the European Union ("EU"). Under company law the
directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Group and the
Company and of the profit or loss for the Group for that period.  In preparing
these financial statements, the Directors are required to:

* Select suitable accounting policies and then apply them consistently;
* Make judgments and estimates that are reasonable and prudent; and
* Prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business, as
noted above under Going Concern.

The Directors are responsible for keeping adequate accounting records that
disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.

In so far as each of the Directors is aware:

* There is no relevant audit information of which the Company's auditors are
unaware; and
* The Directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information and to establish that the
auditors are aware of that information.

The Directors are responsible for the maintenance and integrity of the corporate
and financial information included on the Company's website. Legislation in the
United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.

Events after Balance Sheet date
Refer to note 27 for details of the events after the balance sheet date.

Payment policy and practice
It is the Group's normal practice to settle the terms of payment when agreeing
the terms of a transaction, to ensure that suppliers are aware of those terms,
and to abide by them.  The Company had no trade payables at the year end.

Financial risk management objectives and policies
The Group's financial risk management objectives and policies are set out in the
Financial and Risk Review on page 5 and comply with the disclosure made in note
23 relating to the disclosure required by IFRS 7 Financial Instruments.

Auditors
PricewaterhouseCoopers LLP replaced Grant Thornton UK LLP as auditors during the
year. PricewaterhouseCoopers LLP offer themselves for reappointment as auditors
in accordance with Section 489 (4) of the Companies Act 2006.

On Behalf of the Board

Trevor Moss
Director
12 June 2013

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AFRICAN EAGLE RESOURCES PLC

We have audited the consolidated financial statements of African Eagle Resources
plc for the year ended 31 December 2012 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated Statement of Financial
Position, the Consolidated Statement of Changes in Equity, the Consolidated Cash
Flow Statement and the related notes. The financial reporting framework that has
been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union.

Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on
page 6, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing Practices
Board's Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the
Company's members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose.  We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.

Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the group's circumstances and have been consistently applied and
adequately disclosed; the reasonableness of significant accounting estimates
made by the directors; and the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the
Annual Report and Accounts to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent material misstatements
or inconsistencies we consider the implications for our report.

Opinion on financial statements
In our opinion the consolidated financial statements:

* give a true and fair view of the state of the group's affairs as at 31
December 2012 and of its loss and cash flows for the year then ended;
* have been properly prepared in accordance with IFRSs as adopted by the
European Union; and
* have been prepared in accordance with the requirements of the Companies Act
2006.
Emphasis of matter - Basis of preparation
In forming our opinion on the consolidated financial statements, which is not
modified, we have considered the adequacy of the disclosures made in note 2 to
the financial statements concerning the going concern basis of accounting. Due
to the adverse position in relation to the funding of African Eagle Resources
plc, which has prevented the Company completing a bankable feasibility study for
the Dutwa project, there is significant uncertainty over the future of the
group. For this reason the directors consider that the consolidated financial
statements should be prepared on a basis other than that of a going concern. As
explained in note 2, adjustments have been made in these consolidated financial
statements as a result of preparing them on this basis.

Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial
year for which the consolidated financial statements are prepared is consistent
with the group financial statements.

Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:

* certain disclosures of directors' remuneration specified by law are not
made; or
* we have not received all the information and explanations we require for our
audit.
Other matter
We have reported separately on the Parent company financial statements of
African Eagle Resources plc for the year ended 31 December 2012. That report
includes an emphasis of matter.

Alison Baker (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
12 June 2013

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AFRICAN EAGLE RESOURCES PLC

We have audited the Parent Company financial statements of African Eagle
Resources plc for the year ended 31 December 2012 which comprise the Company
Statement of Financial Position, the Company Statement of Changes in Equity, the
Company Cash Flow Statement and the related notes. The financial reporting
framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European
Union and as applied in accordance with the Companies Act 2006.

Respective responsibilities of directors and auditors
As explained more fully in the Directors' Responsibilities Statement set out on
page 6, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing Practices
Board's Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the
Company's members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose.  We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.

Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant accounting estimates
made by the directors; and the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the
Annual Report and Accounts to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent material misstatements
or inconsistencies we consider the implications for our report.

Opinion on financial statements
In our opinion the Parent Company financial statements:

* give a true and fair view of the state of the Company's affairs as at 31
December 2012 and of its cash flows for the year then ended;
* have been properly prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the Companies Act 2006; and

* have been prepared in accordance with the requirements of the Companies Act
2006.
Emphasis of matter - going concern
In forming our opinion on the Parent Company financial statements, which is not
modified, we have considered the adequacy of the disclosures made in Note 2 to
the financial statements concerning the Company's ability to continue as a going
concern. The uncertainties over the future of the Company, including the ability
of the Company to secure a strategic partner or generate funds through the sale
of subsidiary companies' assets, indicate the existence of a material
uncertainty that may cast significant doubt about the Company's ability to
continue as a going concern. The financial statements do not include the
adjustments that would result if the Company was unable to continue as a going
concern.

Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial
year for which the Parent Company financial statements are prepared is
consistent with the Parent Company financial statements.

Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:

* adequate accounting records have not been kept by the Company, or returns
adequate for our audit have not been received from branches not visited by
us; or
* the Parent Company financial statements are not in agreement with the
accounting records and returns; or
* certain disclosures of directors' remuneration specified by law are not
made; or
* we have not received all the information and explanations we require for our
audit.
Other matter
We have reported separately on the consolidated financial statements of African
Eagle Resources plc for the year ended 31 December 2012. That report includes an
emphasis of matter.

Alison Baker (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
12 June 2013


Consolidated Statement of Comprehensive Income

For the year ended 31 December 2012

-------------------------------------------------------------------------------
    Year to Year to
  31 December 31 December
  2012  2011
Note £ £
-------------------------------------------------------------------------------
Employee benefits expense 4 (1,649,651) (677,784)

Impairment of assets 5 (25,366,967) (1,640,836)

Other expenses 6 (1,549,362) (819,479)

Depreciation expense 12 (46,670) (30,511)

Profit on disposal of assets held for sale 14 327,132 -

Share of loss in associate during the year 15 (11,806) (9,116)

Payroll levies related to prior years 29 (601,754) -
-------------------------------------------------------------------------------

Operating loss (28,899,078) (3,177,726)


Finance income:

Bank interest receivable   108,464 10,117

Foreign exchange (loss)/gain on translation   (145,120) 207,485
-------------------------------------------------------------------------------
Loss before tax   (28,935,734) (2,960,124)

Income tax expense 9 - -
-------------------------------------------------------------------------------
Loss attributable to owners of the parent   (28,935,734) (2,960,124)
-------------------------------------------------------------------------------
Other comprehensive (loss):

Exchange differences on translation of foreign   (799,667) (233,131)
operations

Available for sale investments fair value 13 (40,000) (170,400)
adjustment
-------------------------------------------------------------------------------
Other comprehensive (loss) for the year   (839,667) (403,531)
-------------------------------------------------------------------------------
Total comprehensive loss attributable to owners   (29,775,401) (3,363,655)
of the parent
-------------------------------------------------------------------------------


Loss per share:

Basic and diluted loss per share from total and 10 (4.7p) (0.7p)
continuing operations
-------------------------------------------------------------------------------
Headline loss per share from total and 10 (0.6p) (0.3p)
continuing operations
-------------------------------------------------------------------------------

At 31 December 2012 all operations are continuing, subject to post balance sheet
events set out in note 27. The Company has elected to take the exemption under
section 408 of the Companies Act 2006 not to present the Parent Company Income
Statement and Statement of Comprehensive Income.

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

Consolidated Statement of Financial Position

For the year ended 31 December 2012

-----------------------------------------------------------------------------
    31 December 31 December
  2012  2011
Note £ £
-----------------------------------------------------------------------------
Assets

Deferred exploration costs 11 - 11,126,684

Property, plant and equipment 12 - 81,259

Available for sale investments 13 68,000 160,000

Exploration assets held for sale 14 - 2,465,518

Investment in associates 15 - 2,677,921

Investment in joint ventures 17 - 32,993

Other receivables - Short term 18a 241,233 509,556

Cash and cash equivalents 19 3,645,458 2,285,347
-----------------------------------------------------------------------------
Total assets   3,954,691 19,339,278
-----------------------------------------------------------------------------

Liabilities


Current liabilities

Payroll related levies related to prior years 29 (601,754) -

Other payables 20 (1,656,375) (385,494)
-----------------------------------------------------------------------------
Total liabilities   (2,258,129) (385,494)
-----------------------------------------------------------------------------
Net assets   1,696,562 18,953,784
-----------------------------------------------------------------------------


Equity

Equity attributable to owners of the parent:

Share capital 21 6,940,145 4,095,862

Share premium account   36,559,743 27,201,169

Merger reserve   405,723 705,723

Available for sale revaluation reserve   - 40,000

Foreign currency reserve   (989,933) (190,266)

Retained losses   (41,219,116) (12,898,704)
-----------------------------------------------------------------------------
Total equity   1,696,562 18,953,784
-----------------------------------------------------------------------------

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

The financial statements were approved by the Board of Directors on 12 June
2013.

Trevor Moss
Director
12 June 2013

Company Statement of Financial Position

For the year ended 31 December 2012

------------------------------------------------------------------------------
  Note 31 December 31 December
  2012 2011
£ £
------------------------------------------------------------------------------
Assets

Property , plant and equipment 12 - 2,372

Available for sale investments 13 68,000 160,000

Investments in subsidiaries   - 79,857

Other receivables - Short term 18a 77,018 132,563

Other receivables - Long term 18b - 23,206,053

Cash and cash equivalents 19 3,590,516 2,025,646
------------------------------------------------------------------------------
Total assets   3,735,534 25,606,491
------------------------------------------------------------------------------

Liabilities


Current liabilities

Other payables 20 (547,889) (151,569)
------------------------------------------------------------------------------
Total liabilities   (547,889) (151,569)
------------------------------------------------------------------------------
Net assets   3,187,645 25,454,922
------------------------------------------------------------------------------

Equity

Equity attributable to equity holders of parent

Share capital 21 6,940,145 4,095,862

Share premium account   36,559,743 27,201,169

Available for sale revaluation reserve   - 40,000

Retained losses   (40,312,243) (5,882,109)
------------------------------------------------------------------------------
Total equity   3,187,645 25,454,922
------------------------------------------------------------------------------

The accompanying notes form an integral part of these Company financial
statements.

The financial statements were approved by the Board of Directors on 12 June
2013.

Trevor Moss
Director
12 June 2013

Consolidated Statement of Changes in Equity

For the year ended 31 December 2012

----------------------------------------------------------------------------------------------
  Share Share Merger Available Foreign Retained Total
Capital premium Reserve for sale currency Losses Equity
  account   revaluation reserve
      reserve
£ £ £ £ £ £ £
----------------------------------------------------------------------------------------------
Balance at 1 3,847,622 23,888,084 705,723 210,400 42,865 (10,220,415) 18,474,279
January 2011

Loss for year - - - - - (2,960,124) (2,960,124)

Other
comprehensive
income/(loss):

Exchange - - - - (233,131) - (233,131)
differences on
translation of
foreign
operations

Available for - - - (170,400) - - (170,400)
sale
investments -
fair value
adjustment
----------------------------------------------------------------------------------------------
Total - - - (170,400) (233,131) (2,960,124) (3,363,655)
comprehensive
loss for the
year
----------------------------------------------------------------------------------------------
Transactions
with equity
owners for
2011:

Issue of share 248,240 3,512,720 - - - - 3,760,960
capital

Share issue - (199,635) - - - - (199,635)
costs

Share-based - - - - - 281,835 281,835
payments
----------------------------------------------------------------------------------------------
Total 248,240 3,313,085 - - - 281,835 3,843,160
transactions
with equity
owners
----------------------------------------------------------------------------------------------
Balance at 31 4,095,862 27,201,169 705,723 40,000 (190,266) (12,898,704) 18,953,784
December 2011

Loss for year - - - - - (28,935,734) (28,935,734)

Other
comprehensive
income/(loss):

Exchange - - - - (799,667) - (799,667)
differences on
translation of
foreign
operations

Available for - - - (40,000) - - (40,000)
sale
investments -
fair value
adjustment

Transfer - - (300,000) - - 300,000 -
merger reserve
to profit and
loss
----------------------------------------------------------------------------------------------
Total - - (300,000) (40,000) (799,667) (28,635,734) (29,775,401)
comprehensive
loss for the
year
----------------------------------------------------------------------------------------------
Transactions
with equity
owners for
2012:

Issue of share 2,844,283 9,807,116 - - - - 12,651,399
capital

Share issue - (448,542) - - - - (448,542)
costs

Share-based - - - - - 315,322 315,322
payments
----------------------------------------------------------------------------------------------
Total 2,844,283 9,358,574 - - - 315,322 12,518,179
transactions
with equity
owners
----------------------------------------------------------------------------------------------
Balance at 31 6,940,145 36,559,743 405,723 - (989,933) (41,219,116) 1,696,562
December 2012
----------------------------------------------------------------------------------------------


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

Company Statement of Changes in Equity

For the year ended 31 December 2012

-------------------------------------------------------------------------------
  Share Share Available for Retained Total
Capital premium sale Losses Equity
  account revaluation
    reserve
£ £ £ £ £
-------------------------------------------------------------------------------
Balance at 1 3,847,622 23,888,084 210,400 (4,837,258) 23,108,848
January 2011

Loss for year - - - (1,326,686) (1,326,686)

Other
comprehensive
income/(loss):

Available for - - (170,400) - (170,400)
sale investments
- fair value
adjustment
-------------------------------------------------------------------------------
Total - - (170,400) (1,326,686) (1,497,086)
comprehensive
loss for the year
-------------------------------------------------------------------------------
Transactions with
equity owners for
2011:

Issue of share 248,240 3,512,720 - - 3,760,960
capital

Share issue costs - (199,635) - - (199,635)

Share-based - - - 281,835 281,835
payments
-------------------------------------------------------------------------------
Total 248,240 3,313,085 - 281,835 3,843,160
transactions with
equity owners
-------------------------------------------------------------------------------
Balance at 31 4,095,862 27,201,169 40,000 (5,882,109) 25,454,922
December 2011

Loss for year - - - (34,745,456) (34,745,456)

Other
comprehensive
income/(loss):

Available for - - (40,000) - (40,000)
sale investments
- fair value
adjustment
-------------------------------------------------------------------------------
Total - - (40,000) (34,745,456) (34,785,456)
comprehensive
loss for the year
-------------------------------------------------------------------------------
Transactions with
equity owners for
2012:

Issue of share 2,844,283 9,807,116 - - 12,651,399
capital

Share issue costs - (448,542) - - (448,542)

Share-based - - - 315,322 315,322
payments
-------------------------------------------------------------------------------
Total 2,844,283 9,358,574 - 315,322 12,518,179
transactions with
equity owners
-------------------------------------------------------------------------------
Balance at 31 6,940,145 36,559,743 - (40,312,243) 3,187,645
December 2012
-------------------------------------------------------------------------------


The accompanying notes form an integral part of these Company financial
statements.

Consolidated Cash Flow Statement

For the year ended 31 December 2012

-------------------------------------------------------------------------------
    Year to Year to
  31 December 31 December
  2012 2011
Note £   £
-------------------------------------------------------------------------------
Operating activities

Loss before taxation   (28,935,734) (2,960,124)

Adjustments for non-cash items:

Exchange gain   (12,386) (3,953)

Impairment of assets 5 25,366,967 1,640,836

Loss on disposal of property, plant and 6 586 1,082
equipment

Depreciation expense 12 46,670 30,511

Profit on disposal of assets held for sale 14 (327,132) -

Share of loss in associate 15 11,806 9,116

Share of joint venture loss 17 716 680

Share-based payments 22 315,322 281,835

Interest received   (108,464) (10,117)

Increase in other receivables   (177,562) (59,300)

Payroll related levies related to prior years 29 601,754

Increase in other payables   380,263 69,783
-------------------------------------------------------------------------------
Cash flows used in operating activities   (2,837,194) (999,651)
-------------------------------------------------------------------------------


Investing activities

Payments to acquire property, plant and 12 (123,486) (69,828)
equipment

Deferred exploration expenditure   (8,080,191) (2,728,447)

Exploration assets held for sale   (290,959) (408,648)

Interest received   108,464 10,117

Investments in associates 15 (74,634) (248,740)

Proceeds from sale of licences   471,462 -

Disposal of cash in Katanga Resources Limited   (5,155) -
-------------------------------------------------------------------------------
Cash flows used in investing activities   (7,994,499) (3,445,546)
-------------------------------------------------------------------------------


Financing activities

Net proceeds from issue of share capital   12,202,858 3,561,325
-------------------------------------------------------------------------------
Cash flows from financing activities   12,202,858 3,561,325
-------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash   1,371,165 (883,872)
equivalents

Cash and cash equivalents at beginning of year 19 2,285,347 3,170,709

Exchange loss   (11,054) (1,490)
-------------------------------------------------------------------------------
Cash and cash equivalents at end of year 19 3,645,458 2,285,347
-------------------------------------------------------------------------------

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

Company Cash Flow Statement

For the year ended 31 December 2012


-------------------------------------------------------------------------------
    Year to Year to
  31 December 31 December
  2012 2011
Note £   £
-------------------------------------------------------------------------------
Operating activities

Loss after taxation   (34,745,456) (1,326,686)

Adjustments for non-cash items:

Impairment of assets 5 31,779,570 -

Depreciation expense 12 14,515 1,030

Loss on disposal of property, plant and   694 416
equipment

Share-based payments 22 315,322 281,835

Write off intercompany balance   - (86,356)

Interest received   (108,448) (10,093)

Increase in other receivables   (39,669) (66,991)

Increase in  other payables   396,319 30,692
-------------------------------------------------------------------------------
Cash flow used in operating activities     (2,387,153) (1,176,153)
-------------------------------------------------------------------------------


Investing activities

Payments to acquire property, plant and 12 (87,964) (2,590)
equipment

Funds advanced to subsidiaries   (8,271,318) (3,299,141)

Interest received   108,448 10,093
-------------------------------------------------------------------------------
Cash flow used in investing activities   (8,250,834) (3,291,638)
-------------------------------------------------------------------------------


Financing activities

Net proceeds from issue of share capital   12,202,857 3,561,325
-------------------------------------------------------------------------------
Cash flow from financing activities   12,202,857 3,561,325
-------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash   1,564,870 (906,466)
equivalents

Cash and cash equivalents at beginning of year 19 2,025,646 2,932,112
-------------------------------------------------------------------------------
Cash and cash equivalents at end of year 19 3,590,516 2,025,646
-------------------------------------------------------------------------------

The accompanying notes form an integral part of these Company financial
statements.

Notes to the Financial Statements

For the year ended 31 December 2012
1   NATURE OF OPERATIONS AND GENERAL INFORMATION

African Eagle Resources plc ("African Eagle" or the "Company") whose registered
address is 1(st) Floor, 6 - 7 Queen Street, London, EC4N 1SP is a public limited
company incorporated and domiciled in England and is listed on the AIM market of
the London Stock Exchange and on the Alternative Exchange of the Johannesburg
Stock Exchange Limited ("AltX").

2   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
African Eagle's consolidated financial statements are presented in pounds
sterling (£), which is also the functional currency of the Parent Company.

The Group is required because of its listing on AIM to prepare its financial
results for the year ending 31 December 2012 in accordance with International
Financial Reporting Standards ("IFRSs") as adopted by the EU. Other than as
explained below, the accounting policies set out below have been applied
consistently to the 12 month period presented in the Parent Company and
Consolidated financial statements.

As permitted by Section 408 Companies Act 2006, the Company has not presented
its own income statement or statement of comprehensive income. The Company's
loss for the financial year was £34,745,456 (2011: £1,326,686). The Company's
other comprehensive loss for the financial year was £40,000 (2011: £170,400).

Consolidated financial statements:
As set out in the Report of the Directors, due to the Company having not been
able to secure the additional funding needed to advance its development
programme in Tanzania as it had planned, and following a review of the previous
tax filings of one of the Company's Tanzanian subsidiaries, the directors have
decided to prepare the consolidated financial statements on a basis other than
that of a going concern.  The consolidated financial statements have been
prepared on a break up basis. In adopting the break up basis at the year end the
following policies and procedures were implemented at the year-end:

* At that date all assets are considered as realisable as current assets
within one year.
* Capitalised costs and other assets where no value is expected to be
recovered have been impaired as set out  in Note 5:
* Intangible Deferred Exploration Costs (Note 11) relate to licences and
project costs within Tanzania that the Directors expect to have no near
term value in the absence of funding and an executable offer
* Property, Plant and Equipment (Note 12) has been fully impaired as the
realisable value is anticipated, net of disposal costs, is currently
expected to be nil
* Available For Sale Investments (Note 13) have been impaired to reflect
their realisable value at the balance sheet date including, where
applicable, the market value for listed investments at that date
* Assets Held for Sale (Note 14) have been fully impaired for the Group to
reflect the Directors estimate of fair value at the balance sheet date
less costs to dispose
* Other Receivables - Short Term (Note18a) have been written down to their
estimated realisable value at the balance sheet date
* Other Receivables - Long Term (Note 18b) have been fully written off
reflecting the Directors estimate of the realisable value from group
undertakings considering their restricted funding and probable
liquidation referred to in Note 28
* Payables reflect the full value of payables, including the full value of the
estimated taxation payable referred to in Note 29.
Parent Company financial statements:

As set out in the Report of the Directors, there are inherent uncertainties
regarding the future of the Company, including the ability of the Company to
secure a strategic partner or generate funds through the sale of subsidiary
companies assets. These indicate the existence of material uncertainties that
may cast significant doubt on the ability of the Company to continue as a going
concern.
The Company had cash at 31st May of £1.0m and net liabilities (excluding cash)
of approximately £325k. The Directors have considered forthcoming cash outflows
for termination of employees and professional fees and consider that the
restructured operations have sufficient cashflow for the next six months,
although there are inherent uncertainties which could result in cash balances
being eroded in a shorter timescale.
Key risks and sensitivities:

* Short term receivables of £120k are not collected on a timely basis, in
particular amounts to be refunded from JV partners in relation to
exploration drilling activity.
* Following legal advice some short term creditors included in the net
liabilities above, amounting to £170k are not included in the cashflow
forecast. In the event of these requiring payment cash balances will be
eroded more quickly.
* No cash outflows are assumed in relation to other costs associated from the
Group ceasing operations in Tanzania that could fall due to the Company in
the unlikely event that unidentified guarantees or claims are made.
* Further funding would need to be forthcoming in order for the Company to
conclude a transaction, probably in the form of a reverse takeover, and
whilst there are expressions of interest to fund such a transaction, no
funds have been received to date.  The Directors have also not assumed
receipt of funds in relation to asset sales nor the sale of shares in Kibo
mining which could generate additional funds.
Having considered the inherent uncertainties detailed above, the Directors
consider, having made due enquiries, that it is appropriate for the Parent
Company financial statements to be prepared on a going concern basis.
(b) Basis of consolidation
The Group financial statements consolidate those of the Company and its
subsidiary, joint venture and associate undertakings drawn up to 31 December
2012. The acquisition of African Eagle Resources Limited and its subsidiary
Katanga Resources Limited in 2002 was accounted for using the acquisition method
of accounting. The Company took advantage of the merger relief provisions of
section 131 of the Companies Act 2006 to record the shares issued in connection
with the acquisition at their nominal value. In the consolidated accounts the
shares issued were accounted for at fair value with an appropriate transfer to
the merger reserve. African Eagle Resources Limited has since been dissolved and
its investment in Katanga Resources Limited transferred to Twigg Resources
Limited and the Company. The combination of the Company with Twigg Resources
Limited and its subsidiaries in 2000 was accounted for using merger accounting
as applicable to group reconstructions. Profits or losses on intra-group
transactions, and balances are eliminated on consolidation.

 (c) Taxation
Current income tax assets and liabilities comprise those obligations to,
including company estimates, or claims from, fiscal authorities relating to the
current or prior reporting period, that are unpaid at the 31 December. They are
calculated according to the tax rates and tax laws applicable to the fiscal
periods to which they relate, based on the taxable profit for the year.

Deferred income taxes are calculated using the liability method on temporary
differences. Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases. However,
deferred tax is not provided on the initial recognition of goodwill or on the
initial recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit.

Deferred tax on temporary differences associated with shares in subsidiaries is
not provided if reversal of these temporary differences can be controlled by the
Group and it is probable that reversal will not occur in the foreseeable future.
In addition tax losses available to be carried forward as well as other income
tax credits to the Group are assessed for recognition as deferred tax assets.

 Deferred tax liabilities are provided in full. Deferred tax assets are
recognised to the extent that it is probable that the underlying deductible
temporary differences will be able to be offset against future taxable income.
Current and deferred tax assets and liabilities are calculated at tax rates that
are expected to apply to their respective period of realisation, provided they
are enacted or substantively enacted at the 31 December. Changes in deferred tax
assets or liabilities are recognised as a component of tax expense in the profit
or loss, except where they relate to items that are charged or credited to other
comprehensive income or directly to equity in which case the related deferred
tax is also charged or credited to equity. The deferred tax asset in Note 9 has
not been recognised. The deferred tax asset will be recognised when it is more
likely than not that it will be recoverable.

(d) Property, plant and equipment
Property, plant and equipment are held at historical cost net of depreciation
and any provision for impairment. Depreciation is calculated to write down the
cost or valuation less estimated residual value of all property, plant and
equipment over their estimated useful economic lives. The useful economic lives
are assessed at least annually. The rates generally applicable are:

Motor vehicles             25%

Equipment                  25%

Fixtures and fittings     20%

Material residual value estimates are updated as required, but at least
annually, whether or not the asset has been revalued. Where the carrying amount
of an asset is greater than its estimated recoverable amount, it is written down
immediately to its recoverable amount.

(e) Exploration and development costs
Exploration and development costs represent capitalised expenditures related to
the acquisition, exploration and evaluation of mineral properties and related
plant and equipment.

Exploration assets acquired are recognised as assets at fair value, less
adjustments which arise from subsequent impairment reviews.

Exploration and evaluation costs relating to properties for which there is
insufficient evidence of economically recoverable mineralisation are expensed in
the period incurred. Exploration costs relating to properties for which
economically recoverable reserves are believed to exist are capitalised until
the project to which they relate is sold, abandoned, placed into production or
becomes impaired.

 (f) Share-based payments
All goods and services received in exchange for the grant of any share-based
payment are measured at their fair values. Where employees are rewarded using
share-based payments, the fair values of employees' services are determined
indirectly by reference to the fair value of the instrument granted to the
employee. This fair value is appraised at the grant date and excludes the impact
of non-market vesting conditions. Shares options granted by the Group vest one
year from the date of grant. All equity-settled share-based payments are
ultimately recognised as an expense in the consolidated statement of
comprehensive income with a corresponding credit to retained losses in the
consolidated statement of financial position. If vesting periods or other non-
market vesting conditions apply, the expense is allocated over the vesting
period, based on the best available estimate of the number of share options
expected to vest. Estimates are revised subsequently if there is any indication
that the number of share options expected to vest differs from previous
estimates. Any cumulative adjustment prior to vesting is recognised in the
current year. No adjustment is made to any expense recognised in prior periods
if share options that have vested are not exercised. Upon exercise of share
options, the proceeds received net of attributable transaction costs are
credited to share capital and, where appropriate, share premium. The fair value
has been arrived at using the Black-Scholes model. The key inputs to these
models include: exercise price; share price volatility; dividend yield (if any)
and lapse rate.

(g) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial assets are recognised in the consolidated statement of financial
position at fair value on initial recognition and include cash and cash
equivalents, other receivables, and equity instruments of another enterprise.
Cash and cash equivalents includes cash in hand, deposits held at call with
banks, and other short-term highly liquid investments with original maturities
of three months or less from acquisition.

Financial assets in the financial statements are divided into loans and
receivables and available for sale assets. Financial assets are assigned to the
different categories by management on initial recognition, depending on the
purpose for which they were acquired. The designation of financial assets is re-
evaluated at every reporting date at which a choice of classification or
accounting treatment is available. Other receivables include non-derivative
financial assets with fixed or determinable payments that are not quoted in an
active market. After initial recognition these assets are measured at amortised
cost using the effective interest method less provision for impairment. Any
change in their value is recognised in the consolidated statement of
comprehensive income.

Financial liabilities are obligations to pay cash or other financial assets and
are recognised when the Group becomes a party to the contractual provisions of
the instrument. Financial liabilities categorised at fair value through the
profit or loss are recorded initially at fair value; all transaction costs are
recognised immediately in profit or loss. All other financial liabilities are
recorded initially at fair value, net of direct issue costs. Other payables are
financial liabilities which are expected to be settled within 12 months of the
31 December.

Recognition occurs when a Group company becomes a party to the contractual
provisions of the instrument. Most obligations are legally enforceable and arise
under contractual arrangements. Accrued expenses are liabilities to pay for
goods or services that have been received or supplied but have not been paid,
invoiced or formally agreed with the supplier. The recognition of accrued
expenses results directly from the recognition of expenses for items of goods
and services consumed during the year. The initial measurement of other payables
is usually at fair value. The Group has not entered into any derivative
financial instruments for hedging or any other purpose.

Interest receivable and payable is accrued and credited/charged to the
consolidated statement of comprehensive income in the year to which it relates.

(h) Available for sale financial assets
Available for sale financial assets include non-derivative financial assets that
are either designated as such or do not qualify for inclusion in any of the
other categories of financial assets. All financial assets within this category
are measured subsequently at fair value, with changes in value recognised
through other comprehensive income, through the consolidated statement of
comprehensive income. Gains and losses arising from investments classified as
available for sale are recognised in profit or loss when they are sold or when
the investment is impaired. In the case of impairment of available for sale
assets, any loss previously recognised through other comprehensive income is
transferred from equity reserve to profit and loss. Impairment losses recognised
in the consolidated statement of comprehensive income on equity instruments are
not recognised through other comprehensive income. Impairment losses recognised
previously on debt securities are reversed through the profit or loss when the
increase can be related objectively to an event occurring after the impairment
loss was recognised in the consolidated statement of comprehensive income.

(i) Held for sale
Assets that meet the criteria to be classified as held for sale are to be
measured at the lower of carrying value and fair value less costs to sell and
depreciation on such assets ceases. Assets that meet the criteria to be
classified as held for sale are to be presented separately in the statement of
financial position and the results of discontinued operations to be presented
separately in the statement of comprehensive income.

The Group shall classify a non-current asset as held for sale if its carrying
amount will be recovered principally through a sale transaction rather than
through continuing use. For this to be the case the asset must be available for
immediate sale in its present condition subject to terms that are customary for
sales of such assets and its sale must be highly probable.

For the sale to be highly probable management must be committed to a plan to
sell the asset and an active programme to locate a buyer must have been
initiated. Further the asset must be actively marketed for sale at a price that
is reasonable in relation to its fair value. In addition the sale should be
expected to qualify as a completed sale within one year from the date of
classification.

The Group should recognise an impairment loss for any initial or subsequent
write-down of the asset to fair value less costs to sell. The impairment loss
reduces the carrying amount of the non-current assets. An entity shall recognise
a gain for any subsequent increase in fair value less costs to sell but not in
excess of the cumulative impairment loss.

(j) Joint Venture
A joint venture is a contractual arrangement whereby the Group and other parties
undertake an economic activity that is subject to joint control. Joint control
is when the strategic, financial and operating policies relating to the joint
venture require the unanimous consent of the parties sharing control.

The Group reports its interests in jointly controlled entities using the equity
method of accounting. Under the equity method investments in joint ventures are
carried on the consolidated statement of financial position at cost as adjusted
for the post acquisition charges in the Group's share of the net assets of the
joint venture, less any impairment in the value of individual investments.

(j) Associates
An associate is an entity, over which the Group has significant influence and
which is neither a subsidiary nor an interest in a joint venture.  Significant
influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those
policies. If an entity holds directly or indirectly more than 20% of the voting
rights it is presumed the entity has significant influence. An entity loses
significant influence when it loses the power to participate in the financial
and operating policy decisions of the investee.  IAS 28 clarifies that
investments in associates over which the investor has significant influence must
be accounted for using the equity method. Under the equity method the investment
is initially recognised at cost and adjusted thereafter for the post acquisition
change in the investors share of net assets in the investee. The profit or loss
of the investor includes the investors share of the profit and loss of the
investee. If the associate uses accounting policies other than those of the
investor for like transactions and events in similar circumstances, adjustment
is made to conform the associates accounting policies to those of the investor
when the associates' financial statements are used by the investor in applying
the equity method.

(l) Income and expense recognition
The Group's only income is interest receivable from bank deposits. Operating
expenses are recognised in the consolidated statement of comprehensive income
upon utilisation of the service or at the date of their origin. Interest
received is recognised upon receipt and any outstanding interest is accrued at
the end of the year. All other income and expenses are reported on an accrual
basis.

(m) Foreign currency translation
The financial information for the Group is presented in pounds sterling, which
is also the functional currency of the Parent Company. Items included in the
financial statements of each of the Group's subsidiaries are measured using the
functional currency. For UK subsidiaries the functional currency is sterling and
for the Tanzanian entities the functional currency is US dollars. Functional
currency transactions are translated into the functional currency of the
subsidiary using the exchange rates prevailing at the date of the transaction.
Exchange rate differences arising when monetary items are settled or upon
translation at the spot rate ruling at the end of the year, are separately
reported in the consolidated statement of comprehensive income.

In the consolidated financial statements, all separate financial statements of
subsidiary entities, originally presented in a currency different from the
Group's presentation currency, have been converted into sterling. Monetary
Assets and liabilities have been translated into sterling at the closing rate at
the 31 December. Income and expenses have been translated into sterling at the
average rates over the reporting period. Any differences arising from this
procedure have been charged/credited to the "Foreign currency reserve" in
equity.

Exchange differences arising on a reporting entities net investment in a foreign
operation are recognised in the consolidated financial statements in a separate
component of equity ("Foreign currency reserve"). These exchange differences
will be recognised in the consolidated statement of comprehensive income on
disposal of the net investment.

(n) Equity
Equity comprises the following:

* "Share capital" is the nominal value of equity shares.
* "Share premium account" represents the excess over nominal value of the fair
value of consideration received for equity shares, net of expenses of the
share issue.
* "Merger reserve" is the difference between the net assets of the subsidiary
acquired and the nominal value of the consideration (e.g. shares issued) to
acquire the subsidiary.
* "Available for sale revaluation reserve" represents the difference between
the fair value of the available for sale investments and the acquisition
cost of those investments.
* "Foreign currency reserve" represents the differences arising from
translation of investments in overseas subsidiaries.
* "Retained losses" represents retained earnings.
(o) Operating lease agreements
Leases in which a significant portion of the risks and rewards of ownership
are not transferred to the lessee are classified as operating leases. Payments
made under operating leases are charged to the consolidated statement of
comprehensive income on a straight-line basis over the period of the lease.

(p) Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position
comprise cash on hand and demand deposits together with other short-term, highly
liquid investments that are readily convertible into known amounts of cash and
which are subject to an insignificant risk of changes in value.

(q) New and amended standards adopted by the Group
No new accounting standards were adopted during the year. As the company
accounts have been prepared on a break up basis no future amendments, standards
or interpretations are considered to impact the Group.

 (r) Segmental Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the Chief Operating Decision Maker ("CODM").  The CODM is
the person or group that allocates resources to and assesses the performance of
the operating segments of an entity.  The Group has determined that its CODM is
the Board of Directors of the Company and that its reportable segments are
Other, which includes Tanzania and, until their disposal during the period
Zambia and Mozambique, and the UK.

The segmental information provided to the Board can be found in Note 7 -
Operating Segments.

3   CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The Group makes estimates and assumptions concerning the future. The resulting
estimates will by definition, seldom equal the actual results. Estimates and
judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be
reasonable under the circumstances.  Many of the amounts included in the
financial statements involve the use of judgement and/or estimation. These
judgements and estimates are based on management's best knowledge of the
relevant facts and circumstances, having regard to prior experience, but actual
results may differ from the amounts included in the financial statements.  The
Board has considered the critical accounting estimates and assumptions used in
the historical financial information and concluded that the areas of judgement
that have the most significant effect on the amounts recognised in the financial
statements are set out in note 2(a).

4        EMPLOYEE BENEFITS EXPENSE

------------------------------------------------------
  2012 2011

  £ £
------------------------------------------------------
Share-based payments 315,322 281,835

Salaries and employment taxes 1,320,625 385,009

Other 13,704 10,940
------------------------------------------------------
  1,649,651 677,784
------------------------------------------------------

The employee benefits expense above is expensed to the consolidated statement of
comprehensive income. The difference between this note and note 8 relates to
"project related" staff costs which have been capitalised as deferred
exploration expenditure in the year.

5   IMPAIRMENT

As a result of post balance sheet events the accounts have been prepared on a
break up basis. The impairment of assets resulting from such accounting
treatment at the balance sheet date together with those made during the year
are:

Group

-------------------------------------------------------------------
  Note 2012 2011

    £ £
-------------------------------------------------------------------
Deferred exploration costs 11   19,631,661 1,640,836

Property plant and equipment 12 152,054 -

Available for sale investments 13 1,456,144 -

Assets held for sale 14 1,870,506 -

Associates 15 1,733,211 -

Joint ventures 17 21,667 -

Loss on disposal of subsidiary   80,820 -

Other receivables - short term 18a 420,904 -
-------------------------------------------------------------------
    25,366,967 1,640,836
-------------------------------------------------------------------

Company

------------------------------------------------------------------------
  Note 2012 2011

    £ £
------------------------------------------------------------------------
Property plant and equipment 12 75,127 -

Disposal of available for sale investments   978,774 -

Loss on disposal of subsidiary   7,415,757 -

Other receivables - short term 18a 95,214 -

Amounts owed by group undertakings 18b 23,214,698 -
------------------------------------------------------------------------
    31,779,570 -
------------------------------------------------------------------------

6(a)   OTHER EXPENSES

Other expenses included in the consolidated statement of comprehensive income
include the following items:

-------------------------------------------------------------------------------
  2012 2011

  £ £
-------------------------------------------------------------------------------
Loss on sale of property, plant and equipment 586 1,082

Operating lease costs: Land & Buildings 35,990 26,800

                                     Equipment 6,774 1,468

Business and professional development 39,574 67,943

Legal & professional fees 724,616 275,348

Travel & subsistence 108,903 69,002

Group share of joint venture loss 716 680
-------------------------------------------------------------------------------



6(b)       AUDITORS'S REMUNERATION
During the year the group (including its overseas subsidiaries) obtained the
following services from the company's auditor and its Associates:


  2012 2011

  £ £
-------------------------------------------------------------------------------
Fees payable to the company's auditor and its associates for 95,000 25,935
the audit of the Parent Company and Consolidated financial
statements

Tax and other advisory services 55,908 -
-------------------------------------------------------------------------------
Total 150,908 25,935
-------------------------------------------------------------------------------

7   OPERATING SEGMENTS

As set out in note 1 these accounts have been prepared on a break up basis. In
presenting information on such break up basis the Company considers its business
to be divided into its UK operations being head office and its other operations.
The comparatives have been restated to be presented on a consistent basis.
Accounting on a break up basis gives rise to negative net assets for the group's
non-UK operations at the balance sheet date.
-------------------------------------------------------------------------------

2012 Other UK Total
£ £ £
-------------------------------------------------------------------------------
Depreciation expense (32,100) (14,570) (46,670)

Employee benefits expense - (1,649,651) (1,649,651)

Impairment of assets (23,740,483) (1,626,484) (25,366,967)

Share of loss in associate (11,806) - (11,806)

Other expenses (20,150) (1,529,212) (1,549,362)

Payroll levies related to prior years (601,754) - (601,754)

Profit on disposal of assets held for 327,132 - 327,132
sale



Operating income/(loss) (24,079,161) (4,819,917) (28,899,078)

Finance income/(loss)

Bank interest receivable - 108,464 108,464

Foreign exchange gain/(loss) (202) (144,918) (145,120)
-------------------------------------------------------------------------------
Loss before tax (24,079,363) (4,856,371) (28,935,734)

Income tax expense - - -
-------------------------------------------------------------------------------
Loss attributable to equity owners for (24,079,363) (4,856,371) (28,935,734)
the year
-------------------------------------------------------------------------------


Assets

Property, plant and equipment - - -

Investment in associates - - -

Investment in joint ventures - - -

Available for sale investments - 68,000 68,000

Deferred exploration costs - - -

Cash and cash equivalents 54,942 3,590,516 3,645,458

Other receivables 164,215 77,018 241,233
-------------------------------------------------------------------------------
Total assets 219,157 3,735,534 3,954,691
-------------------------------------------------------------------------------


Current liabilities

Other payables (1,692,186) (565,943) (2,258,129)
-------------------------------------------------------------------------------
Total liabilities (1,692,186) (565,943) (2,258,129)
-------------------------------------------------------------------------------
Net (liabilities)/assets (1,473,029) 3,169,591 1,696,562
-------------------------------------------------------------------------------
Other data:

Property, plant and equipment additions 35,522 87,964 123,486

Deferred exploration additions 8,992,634 - 8,992,634
-------------------------------------------------------------------------------


-------------------------------------------------------------------------------
2011 Other UK Total
£ £ £
-------------------------------------------------------------------------------
Depreciation expense (27,786) (2,725) (30,511)

Employee benefits expense (148,519) (529,265) (677,784)

Impairment of assets (1,640,836) - (1,640,836)

Share of loss in associate (9,116) - (9,116)

Other expenses (18,891) (800,588) (819,479)

Operating loss (1,845,148) (1,332,578) (3,177,726)

Finance income/(loss)

Bank interest receivable - 10,117 10,117

Foreign exchange (loss)/gain 509 206,976 207,485
-------------------------------------------------------------------------------
Loss before tax (1,844,639) (1,115,485) (2,960,124)

Income tax expense - - -
-------------------------------------------------------------------------------
Loss attributable to equity owners for the (1,844,639) (1,115,485) (2,960,124)
year
-------------------------------------------------------------------------------


Net Assets

Non-current assets

Property, plant and equipment 78,832 2,427 81,259

Investment in associates 2,677,921 - 2,677,921

Investment in joint ventures 32,993 - 32,993

Available for sale investments - 160,000 160,000

Deferred exploration costs 11,126,684 - 11,126,684
-------------------------------------------------------------------------------
Total non-current assets 13,916,430 162,427 14,078,857
-------------------------------------------------------------------------------


Current assets

Cash and cash equivalents 225,217 2,060,130 2,285,347

Other receivables 373,278 136,278 509,556

Exploration assets held for sale 2,465,518 - 2,465,518
-------------------------------------------------------------------------------
Total current assets 3,064,013 2,196,408 5,260,421
-------------------------------------------------------------------------------
Total assets 16,980,443 2,358,835 19,339,278



Current liabilities

Other payables (162,155) (223,339) (385,494)
-------------------------------------------------------------------------------
Total liabilities (162,155) (223,339) (385,494)
-------------------------------------------------------------------------------
Net assets 16,818,288 2,135,496 18,953,784
-------------------------------------------------------------------------------
Other data:

Property, plant and equipment additions 67,238 2,590 69,828

Deferred exploration additions 2,649,459 - 2,649,459
-------------------------------------------------------------------------------


8   DIRECTORS AND EMPLOYEES

Staff costs of the Group and the Company during the year were as follows:

                   Group             Company
-------------------------------------------------------------------------
  2012 2011 2012 2011
£ £ £ £
-------------------------------------------------------------------------
Wages and salaries 2,019,021 1,113,135 1,219,217 596,206

Share-based payments 315,322 281,835 315,322 281,835

Social security costs 92,011 108,779 82,542 72,013

Other 36,208 20,903 32,570 14,858
-------------------------------------------------------------------------
  2,462,562 1,524,652 1,649,651 964,912
-------------------------------------------------------------------------


The monthly average number of employees in the Group during the year was 56
(2011: 48) and in the Company was 12 (2011:10).

Project related staff costs for the Group of £812,911 (2011: £832,972) have been
capitalised as deferred exploration expenditure in the year.  The Directors
constitute the only key management personnel of the Group and the Company.

Remuneration in respect of Directors was as follows:
-------------------------------------------------------------------------
    2012 2011
£ £
-------------------------------------------------------------------------
Emoluments including share-based payments   1,338,249 598,996
-------------------------------------------------------------------------

The Group does not contribute towards pension schemes in the UK or overseas.
Directors' emoluments in respect of 2012 and 2011 are detailed below:

----------------------------------------------------------------------------
2012 Salary Fees Compensation(3) Share Other Total
£ £ Options   2012
£ £ £
----------------------------------------------------------------------------
Christopher Pointon - 36,250 - 1,250 - 37,500

Trevor Moss(1) 150,000 107,035 - 33,170 1,057 291,262

David Newbold 88,000 - - 16,585 1,240 105,825

Don Newport - 23,301 - - - 23,301

Paul Rupia - 10,417 - 1,250 - 11,667

Robert McLearon 2,222 - - 8,308 137 10,667

Mark Parker 39,896 - 189,750 31,322 1,175 262,143

Christopher Davies 37,121 - 176,550 29,143 1,449 244,263

Andrew Robertson 90,500 - - 15,867 - 106,367

Euan Worthington(2) - 20,162 112,000 16,342 - 148,504

Geoffrey Cooper - 10,217 77,000 9,533 - 96,750
----------------------------------------------------------------------------
  407,739 207,382 555,300 162,770 5,058 1,338,249
----------------------------------------------------------------------------


(1 )This includes £107,035 paid to HAWM Consulting, Inc a Company owned by
Trevor Moss.

(2 )This includes £2,500 paid to Mining Finance Solutions a Company owned by
Euan Worthington.

(3 )The compensation to directors of £555,300 is payable in two tranches,
£292,200 in 2012 and £263,100 in 2013.

Only Trevor Moss served a full year as a Director.

-----------------------------------------------------------------------
2011 Salary Fees Share Other Total
options 2011

  £ £ £ £ £
-----------------------------------------------------------------------
Trevor Moss(1) 12,500 41,590 - - 54,090

Andrew Robertson 14,667 - - - 14,667

Mark Parker 126,500 - 30,008 3,350 159,858

Christopher Davies 117,700 - 27,920 4,160 149,780

Euan Worthington(2) - 66,000 15,656 - 81,656

Geoffrey Cooper - 38,500 9,133 - 47,633

Bevan Metcalf(3) 74,779 - 13,104 3,429 91,312
-----------------------------------------------------------------------
  346,146 146,090 95,821 10,939 598,996
-----------------------------------------------------------------------


(1 )This includes accrued fee £41,590 to HAWM Consulting, Inc a Company owned by
Trevor Moss.

(2 )This includes £10,000 paid to Mining Finance Solutions a Company owned by
Euan Worthington.

(3 )Bevan Metcalf resigned on 25 November 2011.

9   INCOME TAX EXPENSE

The tax on the Company's profit before tax differs from the theoretical amount
that would arise using the weighted average tax rate applicable to profits of
the company as follows:

                   The              The
Group Company
-------------------------------------------------------------------------------
  2012 2011 2012 2011
£ £ £ £
-------------------------------------------------------------------------------
Loss for year multiplied by
standard rate of UK
corporation tax 24.5% (2011:
26.5%) (7,089,255) (801,709) (8,512,637) (358,205)

Expenses not deductible for 1,938,528 19,610 7,798,842 23,734
tax purposes

Movement in un-recognised 925,550 331,776 713,795 334,471
deferred tax asset

Unrealised foreign exchange 36,056 (39,329) - -
losses/(gains)

African losses 4,189,121 489,652 - -
-------------------------------------------------------------------------------
Tax charge for the year - - - -
-------------------------------------------------------------------------------
Unrecognised deferred tax
asset:

UK tax losses 2,463,910 1,643,293 1,829,686 1,295,304

Short term temporary 487,928 444,198 487,928 444,198
differences

Net property, plant and 3,327 13,183 (1,028) 6,018
equipment  temporary
differences
-------------------------------------------------------------------------------
  2,955,165 2,100,674 2,316,586 1,745,520
-------------------------------------------------------------------------------

The deferred tax asset would be recoverable if taxable profits were generated.
 Deferred tax relating to share-based payments is a short term temporary
difference. The standard rate of corporation tax in the UK changed from 26% to
24% with effect from 1 April 2012. Accordingly, the company's profits for this
accounting period are taxed at an effective rate of 24.5%.

10   LOSS PER SHARE
Basic and diluted loss per share
The calculation of basic loss per share is based on the loss for the year
divided by the weighted average number of shares in issue during the year. 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. Details of share options and warrants in issue that could potentially
dilute earnings per share in the future are detailed in Note 21.

--------------------------------------------------------------------------
  2012 2011
£ £
--------------------------------------------------------------------------
Loss for the year (28,935,734) (2,960,124)
--------------------------------------------------------------------------
Weighted average number of shares in issue 613,317,814 407,793,202
--------------------------------------------------------------------------
Basic and diluted loss per share (4.7p) (0.7p)
--------------------------------------------------------------------------

Headline loss per share
Headline loss per share has been calculated in accordance with the Institute of
Investment Management and Research's ("IMR") Statement of Investment Practice
No.1 entitled 'The Definition of Headline Earnings' and The South African
Institute of Chartered Accountants Circular 3/2009 entitled 'Headline Earnings'.
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 anti-
dilutive by reducing the headline loss per share.

-------------------------------------------------------------------------------
Headline loss 2012 2011
£ £
-------------------------------------------------------------------------------
Loss for the year (28,935,734) (2,960,124)

Adjusted for:

   Plus loss on disposal of property, plant and 586 1,082
equipment

  Less profit on disposal of assets held for sale (327,132) -

   Impairment of assets 25,366,967 1,640,836

   Plus Group share of associate loss 11,806 9,116

   Plus Group share of joint venture 716 680
-------------------------------------------------------------------------------
Headline loss for the year (3,882,791) (1,308,410)
-------------------------------------------------------------------------------
Weighted average number of shares in issue 613,317,814 407,793,202
-------------------------------------------------------------------------------
Basic headline loss per share (0.6p) (0.3p)
-------------------------------------------------------------------------------

11   DEFERRED EXPLORATION COSTS

---------------------------------------------------------------------
  2012 2011
£ £
---------------------------------------------------------------------
Cost:

At 1 January 11,126,684 11,176,584

Foreign currency exchange differences (487,657) (101,550)

Additions 8,992,634 2,649,459

Assets held for sale - (956,973)

Impairment of assets* (19,631,661) (1,640,836)
---------------------------------------------------------------------
Carrying amount at 31 December - 11,126,684
---------------------------------------------------------------------

*refer to note 5
12   PROPERTY, PLANT AND EQUIPMENT

The Group 2012

-------------------------------------------------------------------------------
  Leasehold Motor Fixtures and Total
Improvement Vehicles Fittings
£ £ £ £
-------------------------------------------------------------------------------
Cost:

At 1 January 2012 685 237,825 260,984 499,494

Foreign currency exchange - (10,479) (8,904) (19,383)
differences

Additions 55,576 20,154 47,756 123,486

Disposals - (102,593) (80,181) (182,774)
-------------------------------------------------------------------------------
At 31 December 2012 56,261 144,907 219,655 420,823
-------------------------------------------------------------------------------


Depreciation:

At 1 January 2012 685 187,845 229,705 418,235

Adjustment - (2,053) 2,053 -

Adjusted opening balance 685 185,792 231,758 418,235

Foreign currency exchange - (8,711) (7,815) (16,526)
differences

Charge for the year 8,336 17,468 20,866 46,670

On disposals - (101,974) (77,636) (179,610)

Impairments at the balance sheet 47,240 52,332 52,482 152,054
date
-------------------------------------------------------------------------------
At 31 December 2012 56,261 144,907 219,655 420,823
-------------------------------------------------------------------------------
Carrying amount at 31 December - - - -
2012
-------------------------------------------------------------------------------

The Group 2011

-------------------------------------------------------------------------------
  Leasehold Motor Fixtures and Total
Improvement Vehicles Fittings
£ £ £ £
-------------------------------------------------------------------------------
Cost:

At 1 January 2011 685 202,497 245,419 448,601

Foreign currency exchange - (3,352) (4,035) (7,387)
differences

Additions - 49,740 20,088 69,828

Disposals - (11,060) (488) (11,548)
-------------------------------------------------------------------------------
At 31 December 2011 685 237,825 260,984 499,494
-------------------------------------------------------------------------------


Accumulated depreciation:

At 1 January 2011 685 191,639 212,699 405,023

Foreign currency exchange - (3,512) (3,347) (6,859)
differences

Charge for the year - 10,087 20,424 30,511

On disposals - (10,369) (71) (10,440)
-------------------------------------------------------------------------------
At 31 December 2011 685 187,845 229,705 418,235
-------------------------------------------------------------------------------
Carrying amount at 31 December 2011 - 49,980 31,279 81,259
-------------------------------------------------------------------------------


The Company 2012

-------------------------------------------------------------------------------
  Leasehold Fixtures and Total
improvement fittings
£ £ £
-------------------------------------------------------------------------------
Cost:

At 1 January 2012 685 27,033 27,718

Additions 55,576 32,388 87,964

Disposals - (984) (984)
-------------------------------------------------------------------------------
At 31 December 2012 56,261 58,437 114,698
-------------------------------------------------------------------------------
Accumulated depreciation:

At 1 January 2012 685 24,661 25,346

Charge for the year 8,337 6,178 14,515

Disposals - (290) (290)

Impairments at the balance sheet date 47,239 27,888 75,127
-------------------------------------------------------------------------------
At 31 December 2012 56,261 58,437 114,698
-------------------------------------------------------------------------------
Carrying amount at 31 December 2012 - - -
-------------------------------------------------------------------------------

The Company 2011

----------------------------------------------------------------------------
  Leasehold Fixtures and Total
improvement fittings
£ £ £
----------------------------------------------------------------------------
Cost:

At 1 January 2011 685 24,931 25,616

Additions - 2,590 2,590

Disposals - (488) (488)
----------------------------------------------------------------------------
At 31 December 2011 685 27,033 27,718
----------------------------------------------------------------------------
Accumulated depreciation:

At 1 January 2011 685 23,702 24,387

Charge for the year - 1,030 1,030

Disposals - (71) (71)
----------------------------------------------------------------------------
At 31 December 2011 685 24,661 25,346
----------------------------------------------------------------------------
Carrying amount at 31 December 2011 - 2,372 2,372
----------------------------------------------------------------------------

All of the Group's and the Company's property plant and equipment listed above
are free of any mortgage and charge.

13   AVAILABLE FOR SALE INVESTMENTS

The Group and Company:
---------------------------------------------------------------------------
  2012 2011
£ £
---------------------------------------------------------------------------
Investment in Kibo Mining plc

Cost:

At 1 January 160,000 330,400

Release of revaluation reserve during the year (40,000) (170,400)

Impairment (52,000)
---------------------------------------------------------------------------
Carrying amount at 31 December 68,000   160,000
---------------------------------------------------------------------------
Investment in Elephant Copper Limited

Cost:

At 1 January - -

Investments during the year 1,404,144 -

Impairment (1,404,144) -
---------------------------------------------------------------------------
Carrying amount at 31 December -   -
---------------------------------------------------------------------------

Kibo Mining plc

The Kibo 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). The Company holds 8 million
shares in Kibo Mining.  £40,000 previously credited to the revaluation reserve
was released on the revaluation of Kibo at the balance sheet date. The resulting
balance was further impaired by £52,000 to reflect an assessed permanent
diminution of market value at that date to a revised carrying value of £68,000.

Investment in Elephant Copper Limited

On 30 November 2012 the Group disposed of its interests in a number of assets as
detailed below, in exchange 15 million shares in Elephant Copper Limited
("Elephant Copper"), a private BVI incorporated company. The assets that were
disposed of included:

* Katanga Resources Limited (Subsidiary Company, refer to Note 16);
* Mokambo (Asset Held for Sale, refer to Note 14);
* Kujima Mining & Exploration Limited (Joint Venture, refer to Note 17); and
* Mkushi Copper Joint Ventures Ltd ("MCJV") (Investment in Associate, refer to
Note 15).

The shares in Elephant Copper Limited were valued at US$0.15 per share on the
basis of the most recent issue of shares by Elephant Copper prior to the
completion of the transaction resulting in a carrying value of £1,404,144 using
the exchange rate at 30 November 2012. On a break up basis of accounting such
value was fully impaired at the balance sheet date reflecting the underlying
unquoted nature of the shares of Elephant copper and the consequential lack of
liquidity.

14   ASSETS HELD FOR SALE

---------------------------------------------------------------------
  2012 2011
£ £
---------------------------------------------------------------------
Cost:

At 1 January 2,465,518 1,098,843

Foreign currency exchange differences (119,215) 1,054

Transfer from deferred exploration costs - 956,973

Additions (Igurubi & Mokambo) 290,959 408,648

Impairment:

Mokambo (1,031,926) -

Igurubi (838,580) -

Proceeds from sales:

Mokambo (505,287) -

Wembere and Sena (261,469) -
---------------------------------------------------------------------
Carrying amount at 31 December - 2,465,518
---------------------------------------------------------------------

Mokambo Project
The Mokambo copper project in Zambia, transferred to assets held for sale in
2011, during the year additional development expenditure of £281,134 was
incurred on the project which was subsequently disposed of as part of the
transaction with Elephant Copper which closed on 30 November 2012. An impairment
of £1,031,946 was realised reflecting the fair value of the asset realised on
disposal of £505,287.

Igurubi Project
At the Igurubi gold project in Tanzania during the year additional development
expenditure of £9,825 was incurred. On 29 October 2012 the Company announced
that the agreement with Peak Resources Ltd for its sale had been terminated as
certain conditions precedent had not been met. The asset has been fully impaired
by £838,580 to reflect its fair value at the balance sheet date.

Wembere and Sena Projects
The Wembere project in Tanzania and the Sena project in Mozambique were sold
during the year, including property and plant located in Mozambique, at a profit
of £327,132.

15   INVESTMENT IN ASSOCIATES

Disposal of the Group's 49% share in MCJV formed part of the transaction with
Elephant Copper, refer to Note 13. The Group's share of associate loss is shown
for the period up until the date of disposal, 30 November 2012. The functional
currency for MCJV is US dollars. MCJV has expensed the costs associated with the
Mkushi copper project. The loss reported by MCJV has been restated to reflect
the policy for treating deferred exploration expenditure as detailed in
accounting policy 2(e). The Group share of the adjusted loss in 2012 until the
date of disposal is £11,806 (2011: £9,116) which has been included in the
consolidated statement of comprehensive income with a contra entry to investment
in associates.

The Group's share of the summarised financial information of MCJV for
comparative purposes is detailed below:

----------------------------------------------------------------------
  2012 2011
£ £
----------------------------------------------------------------------
Total non-current assets - 5,244,196

Total current assets - 16,482

Total current liabilities - -

Total non-current liabilities - (5,403,108)
----------------------------------------------------------------------
Group share of associate net liabilities - (142,430)
----------------------------------------------------------------------
Group share of associate loss for the year (11,806) (9,116)
----------------------------------------------------------------------
An impairment of £1.7 million was made to the carrying value of MCJV to reflect
its fair value prior to disposal.



------------------------------------------------------------------
  2012 2011
£ £
------------------------------------------------------------------
At 1 January 2,677,921 2,564,515

Foreign currency exchange (loss)/gain (158,864) (126,218)

Additions 74,634 248,740

Share of loss in associate (11,806) (9,116)

Impairments (1,733,211) -

Proceeds from sales (848,674) -
------------------------------------------------------------------
Carrying amount at 31 December   - 2,677,921
------------------------------------------------------------------

16   SIGNIFICANT SUBSIDIARIES

Details of the Company's significant subsidiaries at 31 December 2012 are as
follows:

-------------------------------------------------------------------------------
  Country of Class of Proportion Proportion Nature of
registration or share held by the held by the business
incorporation capital Company subsidiary
held
-------------------------------------------------------------------------------
Twigg England and Wales Ordinary 100% - Mineral
Resources exploration
Limited

Twigg Gold Tanzania Ordinary 10% 90% Mineral
Limited exploration

Red Hill Tanzania Ordinary - 100% Mineral
Nickel exploration
Limited

Tanzania British Virgin Ordinary 100% - Investment
Nickel Islands holding
Holdings
Limited
-------------------------------------------------------------------------------

Katanga Resources Limited was disposed on the 30 November 2012 and Twigg
Exploration & Mining Limitada was disposed on the 17 February 2012.

17   INVESTMENT IN JOINT VENTURES

The Group disposed of its 49.9% interest in Kujima Mining & Exploration Ltd as
part of the transaction with Elephant Copper on 30 November, refer to Note 13.
 The Group's share of the joint venture loss until that date is shown in the
financial statements.

The Group's share of the summarised financial information in respect of the
joint venture for comparative purposes is set out below:

----------------------------------------------------------------------
  2012 2011
£ £
----------------------------------------------------------------------
Total assets - 43,690

Total liabilities - (46,422)
----------------------------------------------------------------------
Group's share of net liabilities - (2,732)
----------------------------------------------------------------------
Group's share of joint venture loss for the year (716) (680)
----------------------------------------------------------------------



-----------------------------------------------------------------------
  2012 2011
£ £
-----------------------------------------------------------------------
Carrying amount at 1 January 32,993 33,664

Foreign currency exchange loss - 9

Group's share of joint venture loss for the year (716) (680)

Impairments (21,667) -

Proceeds from sales (10,610) -
-----------------------------------------------------------------------
Carrying amount at 31 December - 32,993
-----------------------------------------------------------------------

18a   OTHER RECEIVABLES - SHORT TERM

-----------------------------------------------------
Group 2012 2011
£ £
-----------------------------------------------------
Other receivables 544,460 387,409

Prepayments & accrued income 117,677 122,147

Impairments (420,904) -
-----------------------------------------------------
  241,233 509,556
-----------------------------------------------------


----------------------------------------------------
Company 2012 2011
£ £
----------------------------------------------------
Other receivables 62,863 55,369

Prepayments & accrued income 109,369 77,194

Impairments (95,214) -
----------------------------------------------------
  77,018 132,563
----------------------------------------------------

18b   OTHER RECEIVABLES - LONG TERM

-----------------------------------------------------------------
Company 2012 2011
£ £
-----------------------------------------------------------------
Amounts owed by group undertakings 23,214,698 23,206,053

Bad debt provision (23,214,698) -
-----------------------------------------------------------------
  - 23,206,053
-----------------------------------------------------------------

The Group's other receivables have been collected subsequent to the year end, so
have not been provided for on a break up basis. The Group's and Company's
receivables are unsecured. During the year the intercompany balances between
African Eagle Resources and Katanga Resources Ltd amounting to £8.5 million were
written off on disposal of the Zambian assets.

19   CASH AND CASH EQUIVALENTS

---------------------------------------------------
Group 2012 2011
£ £
---------------------------------------------------
Cash at bank and in hand 3,645,458 2,285,347
---------------------------------------------------
  3,645,458 2,285,347
---------------------------------------------------


---------------------------------------------------
Company   2012 2011
£ £
---------------------------------------------------
Cash at bank and in hand 3,590,516 2,025,646
---------------------------------------------------
  3,590,516 2,025,646
---------------------------------------------------


20   OTHER PAYABLES

--------------------------------------------------------
Group 2012 2011
£ £
--------------------------------------------------------
Other payables 27,261 70,988

Social security and other taxes 29,930 35,548

Accruals and deferred income 1,599,184 278,958
--------------------------------------------------------
  1,656,375 385,494
--------------------------------------------------------


------------------------------------------------------
Company 2012 2011
£ £
------------------------------------------------------
Other payables 27,261 24,993

Social security and other taxes 29,930 35,548

Accruals and deferred income 490,698 91,028
------------------------------------------------------
  547,889 151,569
------------------------------------------------------


21   SHARE CAPITAL

----------------------------------------------------------------------
  2012 2011
£ £
----------------------------------------------------------------------
Allotted, called up and fully paid

Balance brought forward 4,095,862 3,847,622

Additions 2,844,283 248,240
----------------------------------------------------------------------
Ordinary shares of 1p each at 31 December 6,940,145   4,095,862
----------------------------------------------------------------------

The share capital consists only of ordinary shares with a par value of one pence
each. All shares are equally eligible to receive dividends and the repayment of
capital and entitle the member to one vote per share at a shareholders' meeting
of the Company.

During the year the Company allotted shares with an aggregate nominal value of
£12,651,399 as follows:

-------------------------------------------------------------------------------
  Price per Number Share Share* premium Total
share (pence) Capital £
£ £
-------------------------------------------------------------------------------
Placement 6.8p 45,509,570 455,096 2,639,555 3,094,651
proceeds

Placement 4.0p 238,918,709 2,389,187 7,167,561 9,556,748
proceeds
-------------------------------------------------------------------------------
Total   284,428,279 2,844,283 9,807,116 12,651,399
-------------------------------------------------------------------------------

*Before share issue costs of £448,542
Warrants
At 31 December 2012 the Company had in issue 122,754,785 warrants to subscribe
for shares, (2011: Nil), as follows:

* On 27 January 2012 the Company issued 22,754,785 unlisted share purchase
warrants at an exercise price of 6.8 pence per share and an exercise period
of four years from the closing date, 27 January 2016. No warrants have been
exercised to date.
* On 26 April 2012 the Company issued 100,000,000 unlisted share purchase
warrants at an exercise price of 5.5 pence per share and an exercise period
of one year from the closing date, 26 April 2013. No warrants have been
exercised to date.
Options
The Company has granted options to subscribe for shares as follows:

-----------------------------------------------------------------------------------------------
  Exercise At 31 Adjustments At 1 Granted in Exercised Cancelled At 31
price December January the year in the in the year December
(pence) 2011 2012 year 2012
-----------------------------------------------------------------------------------------------
Options 15 250,000 - 250,000 - - (250,000) -
(25 Oct
2007 to
25 Oct
2012)

Options 6.5 9,679,000 (5,509,000) 4,170,000 - - - 4,170,000
(14 May
2009 to
14 May
2014)

Options 6.5 8,859,000 (4,916,036) 3,942,964 - - (628,000) 3,314,964
(26 May
2010 to
26 May
2015)

Options 6.5 - 10,425,036 10,425,036 - - (2,378,000) 8,047,036
(04 Oct
2010 to
04 Oct
2015)

Options 10 4,996,000 - 4,996,000 - - (470,000) 4,526,000
(29 Jul
2011 to
29 Jul
2016)

Options 10 3,000,000 - 3,000,000 - - - 3,000,000
(05 Oct
2011 to
05 Oct
2016)

Options 10 - 3,000,000 3,000,000 - - (3,000,000) -
(01 Dec
2011 to
01 Dec
2016)

Options 3.36 - - - 10,000,000 - - 10,000,000
(27 Jul
2012 to
27 Jul
2018)

Options 4 - - - 3,000,000 - - 3,000,000
 (27
Jul
2012 to
27 Jul
2018)

Options 3.36 - - - 300,000 - - 300,000
(27 Jul
2012 to
27 Jul
2016)
-----------------------------------------------------------------------------------------------
    26,784,000 3,000,000 29,784,000 13,300,000 - (6,726,000) 36,358,000

-----------------------------------------------------------------------------------------------
All share options except those that were granted in 2012 were exercisable at the
year-end. The highest and lowest price of the Company's shares during the year
was 7.56p and 2.12p respectively, and the share price at the year end was 2.12p.

22   SHARE-BASED PAYMENTS

The Company's current share option scheme was adopted on 27 July 2012. Under
this scheme no share options shall be granted which would, at the date of grant,
cause the aggregate number of share options granted to exceed 10% of the issued
ordinary share capital of the Company. At December 31 2012 the number of share
options granted as a percentage of the issued share capital was 5.2%. Share
options granted under the scheme may be made in tranches subject to separate
exercise periods. There are no performance conditions associated with the share
options.

On 27 July 2012 the Company announced that the Board had approved the grant of
10,300,000 share options to certain directors and key employees. The exercise
price of such options was 3.36 pence and was determined on the 90 day volume
weighted average price at market close on 26 July 2012. On 27 July, 2012 a grant
of 3,000,000 share options at an exercise price of 4.00 pence was made to a
retiring director. The aggregate of the options are exercisable in tranches up
to the fifth anniversary of the award date.

The fair value of the stock options granted during the year was determined to be
a sum of £277,390 which represent £21,098 for options granted to employees and
£256,292 for options granted to Directors based on the Black-Scholes option
pricing model with the following assumptions: spot price based on the share
price at the dates of grant, no dividends paid, an overall weighted average
volatility of the Company's share price of 84.95%, a weighted average annual
risk free rate of 0.656%, an expected life of five years with a one year vesting
period. The fair value was calculated as the difference between the options
granted at the exercise price less the fair value of the stock options granted
at the exercise price ruling at the original date of grant. The fair value is
allocated over the vesting periods and in 2012 the charge to the consolidated
statement of comprehensive income is £315,322 in relation to options having
vesting periods within 2012. A lower fair value would be arrived at if the share
price at the date of issuing the accounts was used.

23   FINANCIAL INSTRUMENTS

The Group and Parent Company use financial instruments, comprising short-term
deposits, cash, liquid resources and various items such as other receivables and
other payables that arise directly from its operations. The main purpose of
these financial instruments is to manage the cash raised to finance operations.
The Group and Parent Company have not used derivatives, embedded derivatives or
hedging as defined under IAS 39 during the year. The main risks arising from the
use of financial instruments are liquidity risk and currency risk. The Directors
review and agree policies for managing these risks and these are summarised
below:

Liquidity risk
The Group and Parent Company, at their present stage of development, have no
sales revenues. Operations are financed through the issue of equity share
capital and by joint venturing projects in order to ensure sufficient cash
resources are maintained to meet short-term liabilities. Management monitors the
availability of funds in relation to budget expenditures in order to ensure fund
raising is planned in a timely fashion. Funds are raised in discreet tranches to
finance activities for limited periods. Funds surplus to immediate requirements
are placed in liquid, low risk investments. The ability to raise finance is
subject to a number of factors including but not limited to: the state of the
world financial markets; attractiveness of the Group's projects; price of the
Group's main minerals, namely nickel, gold and copper.

Foreign currency risk
Foreign exchange transactions are settled at spot rate and the Group takes its
profit or loss on these transactions as they arise. The Directors review the
policy on foreign currency risk on a regular basis. The Group's exposure to US
dollars is detailed below and is expressed in pounds sterling.

------------------------------------------
Foreign currency monetary assets US$
------------------------------------------
  2012 2011
Functional Currency £ £
------------------------------------------
Pounds Sterling 508,332 640,009

Tanzanian Shillings 30,353 119,289

Zambian Kwacha - 70,487

Mozambique Metical - 1,480
------------------------------------------
  538,685 831,265
------------------------------------------

* A sensitivity analysis has been prepared on the basis that the components of
financial instruments in foreign currencies are all constant, as in place at
31 December 2012. As a consequence, this sensitivity analysis relates to the
position as at 31 December 2012. The following assumption were made in
calculating the sensitivity analysis:

* All consolidated statement of comprehensive income sensitivities also
impact equity.
* Translation of foreign subsidiaries and operations into the Group's
presentation currency has been excluded from the sensitivity.

* Using the above assumptions, the following tables show the illustrative
effect on the consolidated statement of comprehensive income and equity that
would result from possible changes in the foreign currency:

----------------------------------------------------------------------------
2012 Group Projection:
----------------------------------------------------------------------------
£000,s Comprehensive income/(loss) Equity
----------------------------------------------------------------------------
5% fall in value of GBP vs USD 27 27

5% increase in value of GBP vs USD (25) (25)
----------------------------------------------------------------------------

* Group sensitivities detailed above would not be materially different for the
Parent Company.
Market risk
* The Group's financial instruments affected by market risk include bank
deposits, other receivables and other payables. The following analysis,
required by IFRS 7, is intended to illustrate the sensitivity of the Group's
financial instruments as at 31 December 2012 to changes in market variables,
being exchange rates and interest rates.
* A sensitivity analysis has been prepared on the basis that the components of
financial instruments in foreign currencies are all constant, as in place at
31 December. As a consequence, this sensitivity analysis relates to the
position as at 31 December. The following assumptions were made in
calculating the sensitivity analysis:

* All consolidated statement of comprehensive income sensitivities also
impact equity.
* The majority of debt and other deposits are carried at amortised cost
and therefore carrying value
does not change as interest rates move.

* Using the above assumptions, the following tables show the illustrative
effect on the consolidated statement of comprehensive income and equity that
would result from possible changes in interest rates:

--------------------------------------------------------------------------
2012 Group Projection:
--------------------------------------------------------------------------
£000,s Comprehensive Income/(loss) Equity
--------------------------------------------------------------------------
5% fall in UK interest rates (5) (5)

5% increase in UK interest rates 5 5

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

Group sensitivities detailed above would not be materially different for the
Parent Company.

At the 31 December 2012 there were no term deposits. The Company held the
majority of its cash and cash equivalents in instant access deposit accounts.
The majority of zero interest rate funds are held by our overseas affiliates to
meet short term other creditor commitments.
Cash and cash equivalents
  The  Group The Company
-------------------------------------------------------------------------------
  2012 2011 2012 2011
£ £ £ £
-------------------------------------------------------------------------------
Floating interest rate (by reference 2,829,759 1,424,206 2,829,759 1,947,849
to bank base rate)

Zero interest rate 815,699 861,141 760,757 77,797
-------------------------------------------------------------------------------
  3,645,458 2,285,347 3,590,516 2,025,646
-------------------------------------------------------------------------------

The Company's credit risk exposure is solely in connection with the cash and
cash equivalents held with financial institutions. The Company manages its risk
by holding surplus funds in high credit worthy financial institution and
maintains minimum balances with financial institutions in remote locations.

  The  Group The Company
-------------------------------------------------------------------------------
  2012 2011 2012 2011
£ £ £ £
-------------------------------------------------------------------------------
Financial institution with Standard & 3,626,063 2,261,020 3,590,516 2,025,646
Poor's AA - rating or higher

Financial institution un-rated or 19,395* 24,327* - -
unknown rating
-------------------------------------------------------------------------------
  3,645,458 2,285,347 3,590,516 2,025,646
-------------------------------------------------------------------------------
*This includes cash balances of £19,395 (2011: £19,264)

Fair value of financial instruments
The fair values of the Group's and the Company's financial instruments at the
31 December 2012 and 2011 did not differ materially from their carrying values.

The Group and the Company does not have any long term borrowings, nor does it
hold any derivative financial instruments.

24   COMMITMENTS UNDER OPERATING LEASES

At 31 December 2012 the Group and the Company had annual commitments under non-
cancellable operating leases in respect of land, buildings and equipment
totalling £41,203 (2011: £5,935).

25   CAPITAL COMMITMENTS

The Group and Company had no capital commitments at 31 December 2012 or 31
December 2011.  After the year end the Group has terminated all major
contractors' agreements for work on the feasibility study at Dutwa.

26   CONTINGENT LIABILITIES

As set out in note 29 a Tanzanian subsidiary may be subject to tax assessments
materially different from that provided in the financial statements.

27   EVENTS AFTER BALANCE SHEET DATE

100,000,000 unlisted share purchase warrants referred to in note 21 lapsed on
26 April 2013 without being exercised.

On 2 April 2013 the Company announced its intention to manage its resources and
revise the near term focus of its development activities to reduce costs and
optimise its financial resources in the near term. Additionally, at that time,
David Newbold resigned from the Board of Directors. On 15 May 2012 the Company
further announced the need to take immediate steps to minimise costs, in order
to preserve the Company's cash position, and undertake a restructuring to retain
the main licences related to the Company's nickel assets, but that it will no
longer provide funding to its Tanzanian subsidiary, Red Hill Nickel Limited
("RHN"). The Company anticipated that a process would commence for the orderly
winding up of RHN in due course. It was also resolved to closely control the
funding made available to the Company's remaining subsidiaries with all further
funding requests being considered on a case by case basis. Furthermore, the
Company undertook to seek opportunities to dispose of assets, including the
Tanzanian gold licences, as a means to provide funding for the restructured
Company.

28   RELATED PARTY TRANSACTIONS

There were no related party transactions during 2012 or 2011 for the Group other
than the Directors' remuneration as disclosed in Note 8. Directors' remuneration
includes £2,500 paid to Mining Finance Solutions in 2012 (2011: £10,000), a
Company owned by Euan Worthington and includes accrued fees of £107,035 to HAWM
Consulting, Inc in 2012, (2011: £41,590) a Company owned by Trevor Moss.

29        Payroll levies related to prior years

On 2 April 2013, the Company announced that the Tanzanian Revenue Authority
("TRA") had undertaken a review of the previous tax filings of one of the
Company's Tanzanian subsidiaries. The Tanzanian subsidiary and its advisers have
recently been in further discussions with the TRA and have received
communication from the TRA outlining its initial view of the liability for the
period up to 31 December 2012.  Management's best estimate is an amount due of
£601,754 which has been provided for in the accounts.  Whilst no formal tax
demand from the TRA has been received, the Directors of the Tanzanian
subsidiary, advised by the Company and its tax and legal advisers, will continue
to discuss the matter with the TRA in the hope that this matter can be brought
to a satisfactory close as expeditiously as possible. Neither the Tanzanian
subsidiary nor the Company can forecast the level of any potential tax
assessments or tax liabilities with certainty and there can be no assurance that
the Tanzanian subsidiary will not be subject to a materially different value in
any assessment it may receive.

For further information, please visit www.africaneagle.co.uk or contact:

African Eagle Resources plc
Trevor Moss, CEO
+44 20 7248 6059

Strand Hanson Limited (NOMAD)
Stuart Faulkner
Angela Hallett
James Dance
+ 44 20 7409 3494

Ocean Equities Limited (Broker)
Guy Wilkes
+44 20 7786 4370

Russell & Associates, Johannesburg
Charmane Russell or Marion Brower
+27 11 880 3924









This announcement is distributed by Thomson Reuters on behalf of
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(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#1708926]




Unternehmen: African Eagle Resources PLC - ISIN: GB0003394813