Preliminary Results

AFRICAN EAGLE RESOURCES plc

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010

African Eagle Resources plc ("African Eagle" or "the Company", ticker AIM: AFE,
AltX: AEA) today announces its preliminary results for the year ended 31
December 2010. The Company's annual consolidated financial statements have been
prepared in accordance with International Financial Reporting Standards ("IFRS")
as adopted by the European Union. The information in this preliminary
announcement has been extracted from the audited financial statements for the
year ended 31 December 2010 and as such, does not contain all of the information
required to be disclosed in the financial statements prepared in accordance with
IFRS. The Company will publish its full Annual Report and Financial Statements
to shareholders in May 2011.

Highlights from 2010 and early 2011:

* Dutwa resource upgrade:

* Total Dutwa JORC resource 98.6Mt at 0.93% nickel
* 46.2Mt at 0.93% nickel and 0.03% cobalt in the JORC indicated category
* 917,000 tonnes contained nickel

* Pre-feasibility study on track for Q3 2011, leading into a bankable
feasibility study
* New economic model including full Whittle optimisation:

* Confirms that Dutwa is likely to be economically viable
* Post-tax NPV of US$870 million at a nickel price of US$10/lb
* Cash costs estimated at around US$3.37/lb
* Indicates tank leaching would give the best return

* Zanzui complex targeting 20Mt at up to 1% nickel
* Oversubscribed private placing in January 2011 raised £3.7 million
* Successful September 2010 placing raised £3.3 million
* Divestment of non-core assets to focus on Dutwa Project continues:

* Farm-in signed on Miyabi Gold Project with BrightStar Resources
* Interest in Igurubi Gold Project sold for shares subject to due
diligence
* Uranium division vended in to Jacana Resources

Mark Parker, Managing Director of African Eagle, commented:

"The significant resource upgrades and improved economics achieved at our Dutwa
project during the year greatly helped to de-risk the project. These
achievements and others drove up the share price by 208% during 2010. The Board
believes that the Company is still significantly undervalued against its nickel
resources and plans to unlock this potential by delivering on its 2011
commitments"

CHAIRMAN'S STATEMENT

Dear Shareholder

I am very pleased to report that 2010 was the year in which the investment
community began to recognise the value of our Company, as I predicted in my
Statement a year ago. The reasons for this included de-risking of our world
class Dutwa nickel project in Tanzania, firmer commodity prices and signing up
our new joint broker, Ocean Equities Limited. Ocean Equities has introduced some
major institutional investors to our share register, whom I am pleased to
welcome to African Eagle.

We are now well into the pre-feasibility study of the Dutwa nickel project,
which we expect to complete by the end of Q3 this year before moving into a
bankable feasibility study.

Dutwa economics

A key component of the Dutwa feasibility study will be the financial model of
the project, which has been built for us by independent consultant Simulus, of
Perth, Western Australia using inputs from Snowden Mining Industry Consultants
and AMEC Minproc. The new model has allowed us to update the mid-2009 scoping
study economics. It has given us the ability to test the economic impacts of
different strategies, such as heap versus tank leaching, different rates of
throughput, choices of financing structure and options for the source and
transport of reagents. In March 2011, Snowden delivered a Whittle pit
optimisation report which further confirmed the economic viability of the
project.

The table below shows the results of the latest financial model for both tank
and heap leaching at a yearly throughput of 3Mt of ore, for nickel prices of
US$8 and US$10 per pound. The nickel price as I write is over US$11.50/lb and I
will leave you to estimate what value that could generate.

------------------ -------- ------------- -------------
| 3Mtpa throughput | | Heap Leach | Tank Leach |
------------------ -------- ------ ------ ------ ------
| Nickel price | US$/lb | $10 | $8 | $10 | $8 |
------------------ -------- ------ ------ ------ ------
| NPV(10) post-tax | US$M | 705 | 260 | 870 | 385 |
------------------ -------- ------ ------ ------ ------
| IRR post-tax | % | 26 | 17 | 29 | 20 |
------------------ -------- ------ ------ ------ ------
| Cash costs | US$/lb | 3.56 | 3.56 | 3.37 | 3.37 |
------------------ -------- ------ ------ ------ ------

Increasing the throughput to 5Mtpa would improve the project returns, but
logistical challenges will make 3Mtpa a more realistic production target until
proposed infrastructure developments within Tanzania allow the operation to be
scaled up.

The predicted cash costs of around US$3.37/lb place Dutwa around the median of
the global nickel production curve. This cash cost includes US$1.60/lb leaching
reagent costs and US$1.00/lb for transporting the reagents and end product. We
are working hard to find ways to minimise these component costs.

The inputs to the financial model will be improved as the feasibility study
advances. At this stage, we should regard the results at the level of advanced
scoping study, but confidence will increase as more information becomes
available. The next big milestone will be completion of the bulk metallurgical
tests now being undertaken by three specialist laboratories in Perth, Western
Australia to determine which process route will provide the optimum financial
return.

We are pleased that our partner on the Dutwa project, SAFINA of the Czech
Republic, has agreed to finance its share of the pre-feasibility and bankable
feasibility studies and estimate that on completion of the bankable feasibility
study, African Eagle will hold between 76% and 80% and SAFINA will hold between
24% and 20%, respectively, of the equity in the Dutwa project.

Zanzui and other regional targets

The Zanzui complex, which lies 60km southwest of Dutwa, is a roughly circular
layered mafic-ultramafic intrusive with a diameter of around 12km that covers an
area of more than 140km2. Drill results from 2009 and 2010 allowed our
geologists to calculate an exploration target of at least 20Mt at 0.91% nickel
equivalent in laterite ore, though this is not yet defined to JORC resource
standard. Numerical interpretation of our VTEM geophysical survey suggests that
there are other thick laterite targets yet to be tested and bedrock conductors
which may prove to be nickel sulphides. Anomalous gold and platinum samples have
also been found.

We have identified other regional targets, including one 20km to the east of our
Dutwa project, where a nickel in soil anomaly occurs over an area with no rock
outcrop. This anomaly will be drill tested during Q4 2011.

Legacy projects

African Eagle is divesting its interests in its non-core assets in order to
focus on the Dutwa project and make the transition from an explorer to a nickel
producer. A key objective in this process is to maximise the value of these
assets.

Aside from its nickel projects, African Eagle's Board believes that the
Company's most valuable asset is its copper portfolio in Zambia. Progress to
divest this portfolio has been slower than planned, because the Board has not
been prepared to split this asset and give it away cheaply. As the copper price
continues to reach new records, I believe that we have been fully justified in
holding on for the best value.

Our copper division represents a fully integrated copper exploration and
development company in one of the great copper producing regions of the world,
and the Board believes that the portfolio has greatest value if maintained as
one entity. Therefore, the Board has appointed Chris Davies, our Operations
Director, as CEO designate and mandated him to raise private equity and
implement an accelerated work programme ahead of listing shares in a new copper
company later this year. We are pleased that Michael Mundashi, a senior Zambian
attorney, has agreed to join the Board of the new company, especially as we are
considering a dual listing on the Lusaka Stock Exchange.

The improved copper price has also allowed us, with our joint venture partner
Ratel Group Limited, to begin to develop the Mkushi Copper Mine. A staged
development of the project is planned, with an initial start-up operation using
heap leaching or alternative processing methods. Ratel is updating the 2008
feasibility study with the aim of building up to a larger scale operation in the
latter part of 2012. The funding of our interest in Mkushi will be through
equity directly into the copper division so will not deflect resources away from
Dutwa.

In November, African Eagle vended its uranium projects in Mozambique, Tanzania
and Zambia, subject to due diligence, for shares and cash into Jacana Resources
Limited, a private Australian group. Jacana expects to list its shares in
Australia later this year, at which time we can expect to benefit from
participation in a focussed uranium explorer.

In April 2010, the Company agreed terms with ASX-listed Peak Resources Limited
to dispose of the Igurubi gold project in Tanzania for cash and shares. Peak is
currently awaiting receipt of the licence from the Tanzanian authorities, a pre-
condition of the agreement, before issuing shares to African Eagle. The delay in
the process is not uncommon and we expect the licence to be issued shortly.

Following Macquarie Harbour Mining Limited's decision to relinquish its joint
venture agreement on Miyabi, the Company has signed a farm-in agreement with
BrightStar Resources Limited, a company listed on the ASX (Ticker: BUT).

Corporate

In September 2010, with our shares at 3.75p, we raised £3.3 million before
expenses through a placing with institutions and private client brokers. In
January 2011, we took advantage of the strong demand for our shares and the
headroom that you authorised at our last Annual General Meeting, to place a
further 23.86 million shares at 15.5p for a gross £3.7 million. These extra
funds have given us the ability to carry out further drilling and detailed
metallurgical testwork at Dutwa while maintaining the momentum of the pre-
feasibility study.

To enhance our investor relations efforts, we signed up Ocean Equities as joint
broker in September 2010 and, in February 2011, appointed Canaccord Genuity
Limited as our new nominated adviser and joint broker.

The year ahead

We have much to look forward to in the year ahead, with improvements and
refinement to the Dutwa nickel project, regional exploration, the IPO of our
copper division and news from other non-core assets. We recognise that the
interest that investors have shown in us over the past few months is only the
start and we believe that the Company remains undervalued compared to many of
its peers. Our market capitalisation today is still only a fraction of the NPV
of Dutwa plus the value of our other assets. Together with Ocean Equities and
Canaccord Genuity Limited, the Board, management and employees of African Eagle
will continue to strive to maximise shareholder value and reduce that valuation
gap.

I would like to thank all our employees for their hard work and commitment
during the year. I would also like to commend our Managing Director, Mark Parker
who has been very pragmatic and unselfish in recognising that his particular
skills are in exploration and not best suited to bringing Dutwa into production.
Consequently, the Board has begun the search for a new CEO. Mark, who founded
the Company in 1996, remains a committed shareholder. He will stay on the Board
as a director but will focus his efforts on business development and identifying
other regional nickel targets.

I am sure that we can continue to add value in 2011 and close the wide gap
between our market capitalisation and the underlying value of our assets.

Euan Worthington
Chairman

Consolidated Statement of Comprehensive Income
For The Year Ended 31 December 2010


Note   Year to 31 December Year to 31 December
2010 2009


  £ £



Depreciation expense   (41,661) (60,659)

Employee benefits expense   (588,557) (500,305)

Impairment of deferred 3 (57,498) (221,169)
exploration expenditure

Share of loss in associate   (2,337) (7,476)

Other expenses   (469,170) (453,200)

Other income   120,000 -



Operating loss   (1,039,222) (1,242,809)



Finance income:

Bank interest receivable   28,182 29,887

Foreign exchange   (23,490) 23,328
(loss)/gain



Loss before tax   (1,034,530) (1,189,594)



Income tax expense   - -



Loss attributable to equity   (1,034,530) (1,189,594)
owners for the year



Other comprehensive
(loss)/income:



Exchange differences on   182,155 (857,040)
translation of foreign
operations

Available for sale
investments:

Disposal   - 12,718

Fair value adjustment   210,400 976



Other comprehensive   392,555 (843,346)
(loss)/income for the year




Total comprehensive loss   (641,975) (2,032,940)
attributable to equity
owners for the year






Loss per share:

Basic/diluted loss per 2 (0.3p) (0.5p)
share from total and
continuing operations

Headline/diluted loss per 2 (0.3p) (0.4p)
share from total and
continuing operations



All operations are continuing.

Consolidated Statement of Financial Position
For The Year Ended December 2010


  31 December 2010 31 December 2009

Note

    £ £



ASSETS



Non-current assets

Property, plant and equipment   43,578 80,706

Available for sale investments   330,400 -

Investment in associates   2,564,515 2,319,435

Investment in joint ventures   33,664 34,626

Deferred exploration costs 3 11,176,584 10,261,104



Total non-current assets   14,148,741 12,695,871



Current assets

Cash and cash equivalents   3,170,709 3,293,014

Other receivables   451,239 124,063



Exploration assets held for sale 4 1,098,843 -

Total current assets   4,720,791 3,417,077



Total assets   18,869,532 16,112,948



LIABILITIES



Current liabilities

Other payables   (395,253) (322,740)



Total liabilities   (395,253) (322,740)



Net assets   18,474,279 15,790,208



EQUITY



Equity attributable to owners of the
parent:

Share capital   3,847,622 2,967,622

Share premium account   23,888,084 21,678,832

Merger reserve   705,723 705,723

Available for sale revaluation reserve   210,400 -

Foreign currency reserve   42,865 (139,290)

Retained losses   (9,422,679) (9,422,679)



Total equity   18,474,279 15,790,208

Consolidated Statement of Changes in Equity
For The Year Ended 31 December 2010

    Share Share Merger Available Foreign Retained Total
Capital premium Reserve for sale currency Losses equity
account revaluation reserve
reserve

    £ £ £ £ £ £ £



Balance   2,125,402 19,323,784 705,723 (13,694) 717,750 (8,280,445) 14,578,520
at 31
December
2008





Loss for year   - - - - - (1,176,876) (1,176,876)

Other
comprehensive
income/(loss):

Exchange   - - - - (857,040) - (857,040)
differences on
translation of
foreign
operations

Available for   - - - 976 - - 976
sale
investments -
fair value
adjustment

Disposal of   - - - 12,718 - (12,718) -
available for
sale
investments



Total   - - - 13,694 (857,040) (1,189,594) (2,032,940)
comprehensive
income/(loss)
for the year

Transactions
with equity
owners for
2009:

Issue of share   842,220 2,526,660 - - - - 3,368,880
capital

Share issue   - (171,612) - - - - (171,612)
costs

Share-based   - - - - - 47,360 47,360
payments



Total   842,220 2,355,048 - - - 47,360 3,244,628
transactions
with equity
owners

Balance at 31   2,967,622 21,678,832 705,723 - (139,290) (9,422,679) 15,790,208
December 2009
Loss for year   - - - - - (1,034,530) (1,034,530)

Other
Comprehensive
income/(loss):

Exchange   - - - - 182,155 - 182,155
differences on
translation of
foreign
operations

Available for   - - - 210,400 - - 210,400
sale
investments -
fair value
adjustment



Total   - - - 210,400 182,155 (1,034,530) (641,975)
comprehensive
income/(loss)
for the year

Transactions
with equity
owners for
2010:

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

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

Share-based   - - - - - 236,794 236,794
payments



Total   880,000 2,209,252 - - - 236,794 3,326,046
transactions
with equity
owners

Balance at 31   3,847,622 23,888,084 705,723 210,400 42,865 (10,220,415) 18,474,279
December 2010

Consolidated Statement of Cash Flows
For The Year Ended 31 December 2010


  Year to 31 December Year to 31 December
  2010 2009
Note

    £ £



Operating activities

Loss before taxation   (1,034,530) (1,189,594)

Adjustments for:

Depreciation   41,661 60,659

Exchange gain   (1,115) (3,251)

Loss on disposal of property,   423 705
plant and equipment

Interest received   (28,182) (29,887)

Impairment of deferred 57,498 221,169
exploration expenditure

Share-based payments   236,794 47,360

Share of loss in associate   2,337 7,476
venture

Disposal of available for sale   - 12,718
investments

(Increase)/decrease in other   (326,205) 8,544
receivables

Increase in other payables   2,043 3,797

Share of joint venture loss   975 630

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



Cash flows from operating   (1,168,301) (859,674)
activities



Investing activities

Payments to acquire property,   (1,961) (26,505)
plant and equipment

Payments for deferred   (1,800,872) (1,458,630)
exploration expenditure

Interest received   28,182 29,887

Investments in associates   (270,436) (290,308)

Sale of investment for resale   - 2,943



Cash flows used in investing   (2,045,087) (1,742,613)
activities





Financing activities

Proceeds from issue of share   3,089,252 3,197,268
capital



Cash flows from financing   3,089,252 3,197,268
activities



Net increase/(decrease) in   (124,136) 594,981
cash and cash equivalents

Cash and cash equivalents at   2,709,957 2,709,957
beginning of year

Exchange (gain)/loss   1,831 (11,924)



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

Notes to the Consolidated Statements
For The Year Ended 31 December 2010


1.  NATURE OF OPERATIONS AND GENERAL INFORMATION

African Eagle Resources plc ("African Eagle" or the "Company") is a public
limited company incorporated and domiciled in England and is listed on the AIM
market of the London Stock Exchange and on the Alternative Exchange of the
Johannesburg Stock Exchange Limited (AltX).

African Eagle is a holding company of a group of mineral exploration and
development companies (the "Group"). The principal activities of the Group are
the exploration and development of mineral deposits, with a focus on nickel in
Tanzania. The Company also has gold projects in Tanzania and copper projects in
Zambia.

African Eagle's consolidated financial statements are presented in pounds
sterling (£), which is also the functional currency of the parent company.

2.  LOSS PER SHARE

Basic 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.

  2010 2009

  £ £


Loss for the year (1,034,530) (1,189,594)


Weighted average number of shares in issue 318,942,950 246,459,673


Basic & diluted loss per share (0.3p) (0.5p)

Headline loss per share

Headline loss per share has been calculated in accordance with the Institute of
Investment Management and Research's ("IIMR") 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.

    2010 2009

    £ £
Headline loss

Loss for the year   (1,034,530) (1,189,594)

Adjusted for:

   Plus loss on sale of fixed assets   423 705

   Plus impairment of deferred exploration assets   57,498 221,169

   Plus Group share of associated loss   2,337 7,476

   Plus Group share of joint venture   975 630

   Plus impairment of available for sale financial   - 12,718
assets

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


Headline loss for the year   (1,093,297) (946,896)


Weighted average number of shares in issue   318,942,950 246,459,673


Basic and diluted headline loss per share   (0.3p) (0.4p)


3.  INTANGIBLES

Deferred exploration costs

  2010 2009

  £ £



Cost:

At 1 January 2009 10,261,104 9,717,268

Foreign currency exchange differences 201,181 (746,873)

Additions 1,870,640 1,511,878

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

Impairment charge (57,498) (221,169)



At 31 December 2010 11,176,584 10,261,104

4.  ASSETS HELD FOR SALE

  2010 2009

  £ £



Cost:

Balance brought forward - -

Exploration assets held for sale 1,098,843 -

At 31 December 2010 1,098,843 -

Assets held for sale relate to the Igurubi gold project in Tanzania with Peak
Resources and uranium projects in Tanzania and Mozambique with Jacana Resources.
Both agreements are subject to a number of pre-conditions which at 31 December
2010 had not yet been satisfied.

Peak Resources

The Company announced on 7 April 2010 that it had agreed terms for Peak
Resources to acquire the Company's 75% interest in Igurubi gold project. Under
the agreement, Peak will issue shares on achievement of agreed milestones, in
consideration for the 75% interest.

The principal commercial terms of the agreement between Peak and African Eagle
are:

1. Issue of AUD$250,000 in Peak ordinary fully paid shares within 14 days of
satisfaction of certain conditions precedent, based upon the Volume-Weighted
Average Price ("VWAP") of Peak shares trading on ASX in the five trading
days preceding the announcement that the transfer of African Eagle's
interest has been completed.
2. Issue of AUD$500,000 in Peak ordinary fully paid shares on the later of the
anniversary of the issue of the AUD$250,000 in Peak ordinary shares above
and the issue of certain new mineral licences which are subject to the
agreement. The price will be based upon the VWAP of Peak shares traded on
ASX in the five days prior to allotment.
3. Payment of AUD$1 per resource ounce in Peak ordinary fully paid shares or in
cash on announcement of an audited resource greater than 500,000 ounces.
4. Payment on first commercial production of AUD$1 million.
5. A Net Smelter Royalty of 2%, subject to the total of all non-government
royalties not exceeding 3.5%.

The agreement and the consideration are conditional on certain undertakings by
African Eagle in regard to the grant or offer of tenure extensions.

Jacana Resources

Under the terms of the agreement, the Company will transfer all its uranium
holdings to Jacana Resources Limited in exchange for AUD$1 million in shares and
cash. The payment will be made in two tranches:

* AUD$200,000 in shares on signature of the agreement (20% of Jacana's share
capital); and
* AUD$300,000 in shares plus AUD$500,000 in cash or shares on Jacana's IPO.

5.  Going Concern


It is the prime responsibility of the Board to ensure the Company remains a
going concern. At December 31, 2010 the Company had cash and cash equivalents of
£3.2 million and no borrowings. On January 21, 2011 the Company announced that a
private placing of 23,860,000 new ordinary shares was oversubscribed, and
successfully raised £3.7 million before expenses at 15.5p per share. The
expenses of the placing will be approximately £0.2 million. The Board considers
it has sufficient cash to maintain the Company as a going concern for a period
of twelve months from the date of signing the annual report and accounts.
Although African Eagle has been successful in raising finance in the past, there
is no assurance that it will be able to obtain adequate finance in the future.
However, the directors have a reasonable expectation that they will secure
additional funding when required to. For this reason, the directors continue to
adopt the going concern basis in preparing the financial statements.

6.  Summary Accounts

The summary accounts set out above do not constitute statutory accounts as
defined in Section 435 of the Companies Act 2006 in respect of the 2010
Accounts. The summarised consolidated statement of comprehensive income together
with the consolidated statement of financial position, the summarised
consolidated statement of changes in equity and the summarised consolidated
statement of cash flow for the year then ended have been extracted from the
Group's 2010 audited statutory financial statements. The auditor's report on the
statutory financial statements for the years ended 31 December 2010 and 2009
were unqualified and did not contain any statement under Section 498(2) or (3)
of the Companies Act 2006.

7.  Preliminary Statement

Copies of the Annual Report will be sent to shareholders that have elected to
receive hardcopy documents in May 2011 and will be available from the Company at
2nd Floor, 6-7 Queen Street, London, EC4N 1SP. The full financial statements
will be made available on the Company's website www.africaneagle.co.uk at the
same time they are mailed to shareholders.

For further information, see the Company's website www.africaneagle.co.uk or
contact one of the following:

Bevan Metcalf - Finance Director /
Euan Worthington - Chairman
African Eagle Resources plc, London
44 20 7248 6059
44 7753 862 097

Andrew Chubb / Bhavesh Patel
Canaccord Genuity Limited
44 20 7050 6500

Guy Wilkes
Ocean Equities Limited, London
44 20 7786 4370

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

About African Eagle

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

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







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Source: African Eagle Resources PLC via Thomson Reuters ONE

[HUG#1508089]


Unternehmen: African Eagle Resources PLC - ISIN: GB0003394813