African Eagle Resources plc: Preliminary Results for 2011

PRELIMINARY ANNOUNCEMENT OF AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011

6 June 2012 - African Eagle Resources plc ("African Eagle" or the "Company") (AIM: AFE; AltX: AEA) today announces its preliminary results for the year ended 31 December 2011

Dutwa Project:
· Majority of Wamangola resource upgraded to JORC indicated category

· Positive results from testwork establish atmospheric tank leaching as most competitive project economics

· Aidan Schoonbee appointed as Dutwa Project Manager

· SGS Metallurgy of Perth selected for pilot-scale hydrometallurgical testing programme

· Lycopodium Minerals of Perth selected as engineer to prepare the bankable feasibility study


Corporate:
· Julian McIntyre appointed as Non-Executive Director

· Trevor Moss appointed as Chief Executive Officer

· IFC invests in the Company and becomes major shareholder

· Don Newport and Christopher Pointon appointed as Independent Non-Executive Directors

· Placing and open offer raises £9.5 million

· Board restructured and Chris Pointon appointed Chairman


African Eagle's recently appointed Chairman, Chris Pointon, said "Over the past six months, African Eagle has transitioned from a diversified explorer into a project development company fully focused on the development of the Dutwa nickel project. We have confirmed that Dutwa has the size and metallurgical characteristics to become a highly competitive nickel producer.

As part of this transition, the Board and management team have been restructured to bring in development, operating and project finance skills and I am confident we now have the right project team, ably supported by world class consultants. Most of the Company's non-core assets have been successfully spun off to free up the Company's management and financial resources to concentrate exclusively on Dutwa.

The bankable feasibility study is progressing well.  A resource upgrade is due to be announced shortly and the bulk sample for the pilot plant testwork, due to commence in August, has been shipped."

The Company also announces the publication of its 2011 Annual Report and Financial Statements, which is being posted to shareholders today and is available on the Company's website: www.africaneagle.co.uk.

The information in this preliminary announcement has been extracted from the audited financial statements for the year ended 31 December 2011 and as such, does not contain all of the information required to be disclosed in the financial statements prepared in accordance with IFRS.



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

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

Canaccord Genuity Limited (NOMAD and Joint Broker)
Rob Collins or Andrew Chubb
+ 44 20 7523 8000

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

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



Letter from the Chief Executive Officer

Dear Shareholders,

It is six months since I took over from my able predecessor, the Company's founder Mark Parker, with a mandate to lead African Eagle and to transform it from an exploration company into a focused nickel development company.

Much has changed in that time and African Eagle is now well positioned to develop into a mid cap base metal producer. During my short time as CEO we have made good progress in our efforts to focus the Company's activities towards the timely development of our flagship Dutwa nickel project in Tanzania.

From my first day I have sought to extract the maximum benefit from the inherent strengths of the project - its location in a mining friendly and stable democratic country, its exceptionally favourable metallurgy, the favourable location of the resources on the tops of two hills and the skills of the Tanzanians who have already ably assisted in the considerable development efforts so far.

In these past six months we have thoughtfully assembled a world-class team of dedicated professionals who are working in an integrated way to rapidly advance the development of Dutwa through old-fashioned common sense, hard work and teamwork. Engineers, social and environmental specialists, brokers, JV partners, investors and all levels of Company's management and staff are working closely together with a single collective objective. We have much to accomplish and have set a bold target for ourselves. The project deserves the best we can muster and we have mustered the best.

Trevor A. Moss
CEO


Chairman's Statement*

Dear Shareholders

In my Statement last year, I reported that we were taking steps towards the pre-
feasibility stage of the Dutwa project, and throughout 2011, we continued work
towards that goal. On his arrival at the Company, Trevor conducted a thorough
review, and recommended that the project was robust enough to move directly to a
bankable feasibility study (BFS).

We can look back on 2011 as the year when African Eagle changed from being a
mineral explorer to a mine developer. Resource drilling, metallurgical test work
and economic analysis continued to demonstrate the value of our Dutwa Nickel
Project.

We have made key board and management changes, to give African Eagle the
capabilities needed to develop Dutwa. It has been a particular pleasure for me
to have welcomed Trevor Moss as our new Chief Executive Officer, Andrew
Robertson as Finance Director, Julian McIntyre as a Non-Executive Director,
Aidan Schoonbee as Dutwa Project Manager and (just after the year end), Don
Newport and Dr. Chris Pointon as Independent Non-Executive Directors.

Key Appointments
On the finance front, Andrew Robertson joined us as Finance Director in
December, taking over from Bevan Metcalf. Andrew is a Chartered Accountant with
35 years experience and prior to joining us, was Chief Financial Officer for
several TSX listed Canadian gold mine operators and developers. Andrew has
extensive experience in capital and debt funding and in setting up the financial
systems which will be necessary for a producing mine in Tanzania. In May 2011,
Julian McIntyre, a founder of MWB Capital, joined the Board as a Non-Executive
Director after MWB bought an 11% stake in African Eagle. Julian brings a City
background and the skills of a successful entrepreneur.

Early in 2012, the Board further enhanced its base of expertise by appointing Dr
Chris Pointon and Mr Don Newport as independent Non-Executive Directors. Don and
Chris are two of the best qualified people in our industry and we count
ourselves extremely lucky to attract them. Chris worked for Rio Tinto, Billiton
and BHP Billiton, where he headed the Stainless Steel Materials Division,
building it into one of the world's largest nickel and ferrochrome producers. He
was a member of BHP Billiton's Executive Committee from the Company's formation
in 2001 until his retirement in 2006.

With 23 years of sector-specific experience, Don is a veteran of the London
mining finance industry who, after heading up the Metals & Mining Team at
Barclays Bank, went on to lead the Global Mining Finance team at Standard Bank.
In 2008, Don was honoured with the Mining Journal's Lifetime Achievement Award
for "an outstanding contribution to the advancement of the international mining
industry".

A year ago, I reported that Mark Parker, our Managing Director and African
Eagle's founder, had made the pragmatic decision to step aside as soon as the
Board found the right person to take over as Chief Executive Officer and drive
the development of Dutwa. We were delighted when Trevor Moss, a seasoned
professional engineer with 30 years experience in the mining industry, agreed to
lead the team. Trevor, who has worked for such major groups as Barrick Gold,
Cyprus Amax and Newmont Mining, was attracted to African Eagle by the
opportunity to build Tanzania's first industrial metals mine. His most recent
role, which particularly attracted us, was as Chief Operating Officer of Nevsun
Resources, for whom he successfully brought the Bisha gold mine in Eritrea into
production, below budget and on time.

In addition to these important additions to our Board, in January we appointed
Mr Aidan Schoonbee as the Project Manager for the development of Dutwa. Aidan
has more than 20 years of experience in the African mining industry and has
managed projects from feasibility study through to operation. Aidan will work
closely with Dr. Chad Czerny (Project Manager of Metallurgy), a world authority
on nickel laterite processing who is now overseeing metallurgical test work and
process design in Australia.

IFC Subscription
At the end of the year, we were very pleased to welcome the International
Finance Corporation (IFC), the commercial investment arm of the World Bank
Group, as a leading investor and strategic long term partner. The IFC carried
out detailed due diligence on the Dutwa project, which covered not only
technical and legal matters but also environmental and social aspects. The
latter are criteria which the Board believes are critical to the responsible
development of mining operations, a view shared by the Government of Tanzania.
We will be working with the IFC and the Government of Tanzania to ensure the
Dutwa project is developed in full compliance with the Equator Principles.

Technical Progress
2011 was a year of good progress on the Dutwa project. I refer you to our
Operational Review for the details. In my Statement last year, I reported that
we were taking steps towards the pre-feasibility stage of the Dutwa project, and
throughout 2011, we continued work towards that goal. On his arrival with the
Company, Trevor conducted a thorough review, and recommended that the project
was robust enough to dispense with a formal pre-feasibility report and move
directly to a bankable feasibility study (BFS). The Board agreed with this
judgement, which will avoid repetition, save management time and costs, and lead
to faster project development. We are confident that the deep experience of
Trevor and his team will enable us to manage the risks of fast tracking the
project.

To this end in early 2012 we have appointed the key contractors for the
completion of the BFS all located in Perth Western Australia, the global heart
of nickel laterite expertise, namely Lycopodium as study engineer, SGS Oretest
for the pilot plant, Snowden as resource geologists and mine planners and Knight
Piésold as geotechnical engineer. These appointments followed the 2011
engagement of both Citrus Partners of the UK and MTL Consulting a Tanzanian
consultancy for preparation of the environmental and social impact study.

Legacy Projects
Although we didn't reach the end 2011 target to spin out or divest our Zambian
copper assets, as anticipated in my statement last year, this is being actively
progressed at the time of writing. Chris Davies moved over to be interim CEO of
Cobra Copper and resigned from the Board of African Eagle, I would like to thank
him for his 11 years service as Operations Director. At the Miyabi gold project
in Tanzania, our joint venture partner, ASX listed Brightstar Resources, has
achieved encouraging drilling results. BrightStar is earning a 75% interest from
African Eagle by funding and managing the project through to a Feasibility
Study.

Instead of its planned listing on the ASX, Jacana Resources Limited was
successfully sold into ASX listed Syrah Resources Limited. African Eagle's
agreement with Jacana to transfer a number of licences in Mozambique, Tanzania
and Zambia, mainly for uranium exploration, was fulfilled by Syrah and the
Company received £0.47 million out of a total of about £0.64 million expected
under the transaction, with the balance expected to be received later this year.

Financing
In January 2011, we took advantage of the strong demand for our shares and
placed 23.86 million shares at 15.5p to raise gross proceeds of £3.7 million.
With the market weakness that share price momentum was not maintained, however,
and the placing price for the IFC subscription agreed in November was 6.8p for a
total of £3.1 million. After receiving that sum in February this year, we had
£4.6 million in the bank.

In April 2012 we raised £9.5 million to secure a significant contribution to the
funding for the BFS through a placing with existing and new shareholders, and
from an open offer.

The Year Ahead
Challenges lie ahead to raise capital for the development of Dutwa but banks,
government lending agencies and potential off-take customers are already making
encouraging approaches.

Our management and Board will seek the best advice, capital structure and
optimal pricing to fund this project. The appointment of our new CEO signalled a
significant acceleration of progress on the Dutwa project and I can assure you
that there is much work going on in Tanzania, Western Australia and London,
towards a successful completion of a BFS to be published in the first quarter of
2013.

It is the Board's intention to appoint an Advisor to work with us on the project
finance for Dutwa and we will maintain an aggressive timetable to finance and
construct Dutwa and bring it into production by the end of 2015.

The new direction that the Company is taking requires a fresh Board of Directors
and as such, Mark Parker, Geoffrey Cooper and I have resigned as directors.
Great thanks must go to them all for their hard work, commitment and financial
support over the past decade. Particular thanks go to Mark Parker, founder of
the Company who recognised the great potential of Dutwa.

I welcome all our new Directors to the Board as our Company takes its next steps
towards becoming a nickel mine developer and I would like to thank all our
employees and managers for their hard work and commitment during this period of
change.

Euan Worthington
Chairman
*(Covering the period 1 January 2011 - 24 April 2012)



Consolidated Statement of Comprehensive Income

For the year ended 31 December 2011

Year to 31 December Year to 31 December 2010
2011

    £ £



Depreciation expense   (30,511) (41,661)

Employee benefits expense   (677,784) (588,557)

Impairment of deferred   (1,640,836) (57,498)
exploration expenditure

Share of loss in associate   (9,116) (2,337)

Other expenses   (819,479) (469,169)

Other income   - 120,000
-------------------------------------------------------------------------------
Operating loss   (3,177,726) (1,039,222)



Finance income:

Bank interest receivable   10,117 28,182

Foreign exchange   207,485 (23,490)
gain/(loss) on translation
-------------------------------------------------------------------------------
Loss before tax   (2,960,124) (1,034,530)



Income tax expense   - -
-------------------------------------------------------------------------------
Loss attributable to equity   (2,960,124) (1,034,530)
owners for the year
-------------------------------------------------------------------------------
Other comprehensive
income/(loss):



Exchange differences on   (233,131) 182,155
translation of foreign
operations

Available for sale
investments:

 Fair value adjustment   (170,400) 210,400
-------------------------------------------------------------------------------
Other comprehensive   (403,531) 392,555
(loss)/income for the year
-------------------------------------------------------------------------------
Total comprehensive loss   (3,363,655) (641,975)
attributable to equity
owners for the year
-------------------------------------------------------------------------------




Loss per share:

Basic and diluted loss per   (0.7p) (0.3p)
share from total and
continuing operations

Headline loss per share   (0.3p) (0.3p)
from total and continuing
operations
-------------------------------------------------------------------------------

Consolidated Statement of Financial Position
For the year ended 31 December 2011


    31 31
   December 2011 December 2010



    £ £



ASSETS



Non-current assets

Property, plant and equipment   81,259 43,578

Available for sale investments   160,000 330,400

Investment in associates   2,677,921 2,564,515

Investment in joint ventures   32,993 33,664

Deferred exploration costs   11,126,684 11,176,584
----------------------------------------------------------------------------
Total non-current assets   14,078,857 14,148,741
----------------------------------------------------------------------------
Current assets

Cash and cash equivalents   2,285,347 3,170,709

Other receivables - Short term   509,556 451,239
----------------------------------------------------------------------------
    2,794,903 3,621,948

Exploration assets held for sale   2,465,518 1,098,843
----------------------------------------------------------------------------
Total current assets   5,260,421 4,720,791
----------------------------------------------------------------------------
Total assets   19,339,278 18,869,532
----------------------------------------------------------------------------


LIABILITIES



Current liabilities

Other payables   (385,494) (395,253)
----------------------------------------------------------------------------
Total liabilities   (385,494) (395,253)
----------------------------------------------------------------------------
Net assets   18,953,784 18,474,279
----------------------------------------------------------------------------


EQUITY



Equity attributable to owners of the parent:

Share capital   4,095,862 3,847,622

Share premium account   27,201,169 23,888,084

Merger reserve   705,723 705,723

Available for sale revaluation reserve   40,000 210,400

Foreign currency reserve   (190,266) 42,865

Retained losses   (12,898,704) (10,220,415)
----------------------------------------------------------------------------
Total equity   18,953,784 18,474,279
----------------------------------------------------------------------------

Andrew Robertson
Director


Consolidated Statement of Changes in Equity
For the year ended 31 December 2011

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

    £ £ £ £ £ £ £



Balance   2,967,622 21,678,832 705,723 - (139,290) (9,422,679) 15,790,208
at 31
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
----------------------------------------------------------------------------------------------




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
income/(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
-------------------------------------------------------------------------------------------



Consolidated Statement of Cash Flows

For the year ended 31 December 2011

  Year to 31 December Year to 31 December
  2011 2010


    £ £



Operating activities

Loss before taxation   (2,960,124) (1,034,530)

Adjustments for non-cash
items:

Depreciation   30,511 41,661

Exchange loss/(gain)   (3,953) (1,115)

Loss on disposal of property,   1,082 423
plant and equipment

Impairment of deferred   1,640,836 57,498
exploration expenditure

Share-based payments   281,835 236,794

Share of loss in associate   9,116 2,337

Share of joint venture loss   680 975

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

Other cash flows

Interest received   (10,117) (28,182)

(Increase)/decrease in other   (59,300) (326,205)
receivables

Increase in other payables   69,783 2,043


-------------------------------------------------------------------------------
Cash flows from operating   (999,651) (1,168,301)
activities


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

Payments to acquire property,   (69,828) (1,961)
plant and equipment

Deferred exploration   (3,137,095) (1,800,872)
expenditure

Interest received   10,117 28,182

Investments in associates   (248,740) (270,436)


-------------------------------------------------------------------------------
Cash flows used in investing   (3,445,546) (2,045,087)
activities


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


Financing activities

Proceeds from issue of share   3,561,325 3,089,252
capital


-------------------------------------------------------------------------------
Cash flows from financing   3,561,325 3,089,252
activities


-------------------------------------------------------------------------------
Net (decrease)/increase in   (883,872) (124,136)
cash and cash equivalents

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

Exchange (loss)/gain   (1,490) 1,831


-------------------------------------------------------------------------------
Cash and cash equivalents at   2,285,347 3,170,709
end of year
-------------------------------------------------------------------------------

Basis of Preparation
The financial information set out above do not constitute statutory accounts as
defined in Section 435 of the Companies Act 2006 in respect of the 2011 Accounts
but have been extracted from the Group's 2011 audited statutory financial
statements. The auditor's report on the statutory financial statements for the
years ended 31 December 2011 and 2010 were unqualified and did not contain any
statement under Section 498(2) or (3) of the Companies Act 2006.








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Unternehmen: African Eagle Resources PLC - ISIN: GB0003394813