Mid-year progress report

African Eagle Resources plc

MID-YEAR PROGRESS REPORT

Dutwa

* Second bulk ore sample drilling nears completion
* Geotechnical testwork completed on first bulk ore sample
* Mineralogical study conducted by London Natural History Museum
* Metallurgical testwork progressing well at labs in Australia and South
Africa
* Environmental baseline and social impact assessment started
* Significant progress on logistics and reagents studies

Other Projects

* JV partner BrightStar commences 10,000m drilling programme at Miyabi gold
project, Tanzania
* Zambian copper spin-out company Cobra Copper incorporated
* Board reorganisation well advanced


Dutwa is a unique nickel project with a JORC resource of 99 million tonnes at
0.93% Ni, easily mined from two hilltop deposits and amenable to simple, low
acid consumption atmospheric leaching, leading to world class economics. The
updated independent financial modelling prepared for the feasibility study by
Simulus in March 2011 indicated a net present value for a 3Mtpa project of $870M
at today's nickel price of $10/lb, with cash operating costs of approximately
$3.40/lb and a projected capital payback of between three and five years.

The African Eagle board's intention is to deliver a definitive feasibility study
("DFS") on Dutwa by the end of Q4 2012 - the pre-feasibility stage of this is on
track for late 2011. Mineral processing and metallurgical testwork, key
components of the DFS, are currently underway on carefully chosen bulk samples
of each of the ore types. The new testwork will build on the results of past
tests which demonstrated that the Dutwa ore can be treated by simple atmospheric
leaching at low acid consumption, with no requirement to employ costly and
challenging HPAL (high pressure acid leaching) technology. The new tests will
help to optimise the process flow-sheet and investigate various ways to cut
operating costs to improve the favourable economics already demonstrated by our
scoping studies.

Several elements of the DFS are already underway in parallel with the pre-
feasibility work, including drilling a second bulk ore sample for pilot-plant
testwork and the environmental and social impact assessment.

African Eagle's Managing Director Mark Parker comments: "We are pleased to
report good progress on our Dutwa DFS. Geotechnical tests have been completed on
Bulk Ore Sample 1; metallurgical test programmes are well underway; and diamond
drilling to obtain Bulk Ore Sample 2 is almost complete. We expect to recommence
drilling for the resource upgrade at the Ngasamo part of Dutwa in early July. We
have made a start on the baseline work for our environmental and social impact
assessment and advanced our logistics and reagents studies. We are on schedule
with the DFS and expect to establish the preferred treatment process for Dutwa
ore and complete the pre-feasibility stage of the study in late 2011.

"Our management reorganisation, which is intended to put in place the skills and
expertise we will need for the finance and construction of the Dutwa project, is
making good progress. The spin out of our Zambian copper projects into a new
company, Cobra Copper, is advancing well. In Tanzania, our partner BrightStar
Resources has begun a major drill programme at the Miyabi gold project."

Dutwa progress

Tests are well underway on Bulk Ore Sample 1 ("BOS1"), which was shipped to the
ALS AMMTEC lab in Perth WA in Q1 2011. BOS1 consists of about 10 tonnes of large
diameter mineralised drill core, from holes carefully selected to be
representative of the averages and variations of the principal ore types from
both Wamangola and Ngasamo. Testwork so far has focused on investigating the
properties of the ore in crushing and grinding prior to leaching, and on
geotechnical tests to determine the rock parameters for mining engineering and
pit design. The test data have been incorporated into a request to quote for
accurate mining cost estimates for input to the feasibility study, sent to
international mining contractors. Beneficiation tests now underway on BOS1
employ commonly used laterite ore processing steps such as crushing, drum
scrubbing, attritioning and screening to determine the upgrade potential of the
various types of ore, ahead of integrated feed slurry preparation and leaching
tests.

This testwork has been complimented by a mineralogical study by the London
Natural History Museum ("NHM"), which is giving valuable insights into the style
and nature of the nickel and cobalt mineralisation. Understanding the mineralogy
of nickel laterites is vital in developing the optimum ore treatment method. The
information from the NHM study will help us to design a process flow-sheet which
minimises the amount of acid required to leach the nickel and reduce the process
energy requirements, reducing the operating cost per pound of nickel.

Atmospheric agitated tank leaching tests by Mintek, Johannesburg, on composite
samples from Ngasamo covering a wide range of lithologies returned encouraging
results, confirming that the leach performance of Dutwa ores is superior to many
nickel laterites elsewhere in the world. The ferruginous siliceous ore from
Ngasamo, which accounts for about 20% of the total Dutwa resource, does not
leach quite as well as its equivalent at Wamangola, but nickel can still be
recovered easily from this ore with extractions approaching 80% at a low acid
consumption of 375 kg/t after 8 hours at 90-95 Celsius. Ngasamo transition ore
averaged 75% extraction with 425 to 440 kg/t acid, while even the saprolitic ore
required only 550-660kg/t acid to extract 75 to 80% of the nickel. Such ores
from other laterite deposits are characteristically high acid consumers, needing
up to 900-1000 kg/t. As the Dutwa ores are generally low in iron, aluminium and
manganese, we expect that extraction of nickel and cobalt from the liquors
produced by atmospheric leaching will be relatively straight forward.

The financial models for the DFS are now fully built and checked. Inputs will be
modified and improved as better data become available, such as the mining and
processing costs noted above. The models will also be used to test the economic
impact of potential cost-saving measures such as using rail instead of road
transport or using magnesium-bearing saprolite ore in place of some of the
limestone needed to neutralise residual acid after leaching.

Well ahead of schedule, diamond drilling, for bulk ore sample 2 ("BOS2") is
nearing completion. BOS2 consists of a further 15 tonnes of material from the
two Dutwa deposits and will be shipped to Perth for use as feedstock for our
first pilot-scale metallurgical tests later this year or early 2012. Results
from this will inform the detailed plant design engineering and costing for the
DFS, and will provide product samples for potential off-take buyers.

The mineral resources at Dutwa have been almost completely defined to JORC
standards, but some drilling is still needed, mostly at Ngasamo, to extend the
resource and upgrade it from inferred to indicated category. This will commence
in early July, using a new track-mounted drill rig which has been designed to
operate safely on the relatively steep slopes of Ngasamo hill. Flooding of the
drill rig factory in Brisbane early in the year delayed this start of this
drilling programme somewhat and due to the specialised nature of the rig, it was
not practical to source an alternative, but we expect to complete the programme
in time to finish the pre-feasibility phase of the DFS in late 2011.

We are making good progress with other elements of the feasibility study: our
studies of logistics, infrastructure and reagents are well advanced and our
contractor has started the baseline surveys for the environmental and social
impact assessment, which will be conducted to full Equator Principles standards.

Miyabi Gold project

BrightStar Resources Limited ("Brightstar"), who signed a joint venture over the
Miyabi gold project in April, has already begun operations on the ground,
commencing a 10,000 metre drilling programme which will cover a three kilometer
strike length of a highly prospective zone along the granite contact, as well as
other promising targets. BrightStar's announcement can be found on its web site,
www.brightstar.com.au

Corporate reorganisation

The Company is advancing its plan to reorganise its board of directors, in order
to put in place the skills it will need to take Dutwa through construction and
into production, and to spin out its non-core legacy projects. The search for a
new CEO is making good progress and the Company is on track for Mark Parker to
shift to a new opportunities role at the year end. Our part time Finance
Director, Bevan Metcalf, will step aside once a full time replacement has been
appointed, with input from the new CEO. Chris Davies has been mandated to steer
AFE's copper division to full independence, and Julian McIntyre joined the Board
as a non-executive director in May.

African Eagle's plan to divest its legacy assets in order to focus on the Dutwa
project is advancing well. Under the guiding hand of Chris Davies, AFE's copper
division is well on the way to being spun out into a new company, Cobra Copper.
Cobra represents a fully integrated copper exploration and development company
in one of the great copper producing regions of the world, and we expect it to
realise the value of AFE's copper assets.

Qualified Person

Information in this report relating to metallurgical test results is based on
data reviewed by Chad Czerny PhD, Project Manager, Metallurgy for African Eagle
Resources, who is a Member of the Australasian Institute of Mining and
Metallurgy, has more than 20 years' relevant experience in the mining and
metallurgical industry, and is a Qualified Person under AIM guidelines. Dr
Czerny consents to the inclusion of the information in the form and context in
which it appears.

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

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

Canaccord Genuity Limited
Andrew Chubb
Bhavesh Patel
44 20 7050 6500

Ocean Equities Limited
Guy Wilkes
44 20 7786 4370

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







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Source: African Eagle Resources PLC via Thomson Reuters ONE

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Unternehmen: African Eagle Resources PLC - ISIN: GB0003394813