| Fri 28 Sep 2007, 8:46 | | AEA - African Eagle Resources plc - Chairmans Revi |
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AEA
AEA
AEA - African Eagle Resources plc - Chairmans Review of progress
African Eagle Resources plc
(Incorporated in England and Wales, registered number 3912362)
AIM share code: AFE AIM ISIN: GB0003394813
JSE share code: AEA JSE ISIN: GB0003394813
African Eagle
Chairman`s Review of Progress
African Eagle Resources plc ("African Eagle" or "the Company"; Ticker: AIM:
AFE, AltX: AEA) today outlines progress made so far in 2007. The financial
results for the half year ended 30 June 2007 have been released in a separate
RNS.
Highlights
* GBP7.4M raised on AltX listing in Johannesburg in August
* Progress to pre-feasibility at Mkushi and delineation of new high-grade L-
Zone
* Partnership signed with Randgold on Miyabi and drilling already well
advanced
* Ndola Copperbelt project advancing positively in partnership with Phelps
Dodge
* Phase-1 drilling completed to test Kampumba (Tandalwe Hill) oxide copper
zone
* Formal resource estimate at Eagle Eye (Mweze) and new drill targets
identified
* Drilling to commence shortly at Dutwa, Igurubi and new Rupa projects in
Tanzania
* Uranium division established to drive forward significant project assets
* Alliance with Troll Mining on uranium, copper and gold projects in
southern Tanzania
* Mokambo South licence granted in the Zambian Copperbelt
Statement by John Park, African Eagle`s Chairman:
Dear shareholder,
This has been an active and successful period for your Company, culminating in
our share listing on the Johannesburg AltX exchange at the end of August.
The Company`s strategy of focusing on making discoveries, maintaining a
diverse exploration portfolio and signing up partners to ensure timely
development of our advanced projects, has proved to be extremely successful.
African Eagle and its partners have made excellent progress on many of our
projects and I believe that we are well on track to our goal of holding
significant interests in several revenue-generating mines within three to five
years.
Corporate
The Company`s ground-breaking secondary listing of its shares on the
Johannesburg AltX exchange with a R88 million placing to South African
investors, together with a further GBP1.1 million raised in the UK, must rate
as a remarkable corporate success.
We are proud to have notched up some important AltX firsts:
* we are the first AIM-listed resource company without South African assets
or previous South African connections to list on AltX;
* we are the first AIM company to raise capital through a secondary AltX
listing; and
* this is the biggest capital-raising on AltX to date by an exploration and
development company.
The South African market`s understanding of mining and Africa together with
its current appetite for exploration, coupled with the relative ease of
meeting AltX`s listing requirements, ranked high amongst African Eagle`s
reasons for choosing AltX over other markets.
African Eagle now has 22% of its shares on its South African register and we
believe that altogether, about 30% of its shares are South African managed.
The capital we raised means that African Eagle`s exploration programme will be
fully funded for at least the next 24 months, and together with JV partners`
funding commitments, the Company will have enough capital to bring most of its
key projects to the feasibility stage.
Additional good news for our UK based private investors is that Her Majesty`s
Revenue and Customs have confirmed to us that they now do not consider AltX to
be a "recognised exchange" for UK tax purposes. This ruling means that the
Company`s dual listing does not disturb the beneficial tax status granted to
AIM-listed shares in the UK.
Strategy
The period has seen the further development of the Company`s strategy and
business model, namely to continue to focus on exploration, making discoveries
and maintaining a diverse exploration portfolio, while signing up partners
with the engineering and mining skills and capital to ensure timely
development of our advanced projects.
The signature in May of our deal bringing Randgold Resources into the Miyabi
Gold Project is a major step along this path. Randgold has a record of
exploration and development success, notably the Morila and Yalea gold mines
in Mali, and Tongon in Cote d`Ivoire. Randgold began work at Miyabi almost as
soon as the agreement was signed and it has now almost completed its phase-1
drilling programme.
The Company`s establishment of a Uranium Division was another significant step
during the period. There are 8 projects which have uranium potential, with
targets including calcrete and playa type deposits in Neogene to recent
sediments, sandstone hosted deposits of Karoo and Cretaceous ages and vein
deposits in crystalline basement rocks. The portfolio includes 11 licences
and 8 applications, with a total area of some 13,000 square kilometres.
There are listed uranium exploration companies with far fewer and less
promising assets than these. In order to optimise value to shareholders, the
Company has been investigating a number of alternative ways to develop these
uranium licences, including exploring them in-house, joint venturing with a
uranium specialist company, or developing them in a new listed subsidiary.
Our strategic alliance with a Tanzanian company Troll Mining, signed in May,
gives African Eagle a majority interest in a portfolio of promising uranium,
gold and copper prospects.
In Mozambique, we established a local company for our exploration operations.
We also signed a farm-out agreement with Pan African Mining Corp for the
exploration of the Fingoe area of northwest Mozambique.
Research Note
A Research Note on the Company was recently written by Loeb Aron & Company
Ltd, and we have made this available for download from our web site.
The Note concludes that "African Eagle combines the potential of grassroots
exploration plays with a number of less speculative resource definition and
development projects being carried forward by partners. A `by parts` market
valuation, carried out on a reasonably conservative basis, suggests a present
day market value of 24.7p per share. Our 12-month target, based on outcomes of
reasonably high probability, is 30.7p per share. African Eagle is now well
funded, active and likely to be increasingly news generative".
The Note supports the Company`s contention that it is now in a very strong
position, with several advanced projects progressing towards production
decisions, resting on a firm foundation of earlier stage projects. The
analysts vindicate African Eagle`s strategy of signing up industry partners to
bring projects into production as quickly as possible.
The Note may be viewed at www.africaneagle.co.uk/investors/LoebNoteSept07.pdf
Project Updates
Mkushi
Mkushi in Zambia is our nearest to production project and we hope to give the
green light to development by the end of next year. The high resolution
airborne geophysical survey carried out in Q1 showed geological and structural
features in extraordinary detail and the soil geochemical survey revealed
unexpected as well as predicted copper targets. Follow-up ground geophysical
and additional geochemical surveys are underway to investigate these targets.
Drilling by our development partner CGA Mining revealed a new mineralised
structure, now known as L-Zone, with intercepts up to 37m at 2.4% copper. CGA
is on track to produce a pre-feasibilty study in the coming weeks and is
likely to announce a significant resource update, having increased the total
drilling from 10,000m to more than 25,000m since entering the joint venture in
July 2006. The metallurgical, environmental and mine planning work for the
pre-feasibility study is also well advanced.
Ndola
The systematic exploration of our 450km2 Ndola licence in Zambia is also
progressing very well. Again, the high resolution airborne geophysical survey
and the soil geochemical survey have given us important geological and
structural insights, and with our partner Phelps Dodge (now part of Freeport-
McMoRan) we have identified several promising copper targets. Drilling at
Msindu, the first of these, intercepted significant copper mineralisation.
Geophysical electromagnetic surveys are underway to help elucidate the complex
structure in this area. Assay and drill results are currently being analysed
and it is hoped these will be received shortly.
Miyabi
After Mkushi, Miyabi in Tanzania is our next most advanced project. As noted
above, our development partners on the Miyabi Gold Project, Randgold
Resources, mobilised a diamond drill rig very soon after signing the earn-in
agreement in early May, and the phase one programme is now almost complete.
This drilling was aimed principally at helping Randgold`s geologists to
understand the shear zones and geological structures at Miyabi. Randgold has
until May 2008 to elect to fund and perform the pre-feasibility to earn a 50%
interest in the project. The Company is expecting the current gold resource of
just over half a million ounces to increase, as there are many anomalies still
to be drilled.
Eagle Eye
At our Eagle Eye project in Zambia the soil geochemical grid has been extended
to cover almost all of the prospective area of the iron-oxide copper gold
system. As part of its Competent Person`s Report for our AltX listing, SRK
Consulting (UK) Limited carried out a formal resource estimate on the Mweze
area. SRK`s JORC indicated resource estimate, based on the 10 holes drilled
which have intersected the Mweze mineralised zone to date, was 1.4Mt at 1.2%
copper. More important than the estimate itself was the insights which the 3-
dimensional modelling provided into the structural and geological controls on
the mineralisation. These insights will be used to site new drill holes later
this year. We have also identified new drill targets from our thorough review
of past data, and a trenching programme is underway to fine-tune these.
Other exploration activities
Tanzania
Positive progress has been made with our holdings in the Lake Victoria
Goldfield, where results from the Dutwa and Rupa projects have been especially
encouraging. We have started exploration of the Troll licences in southwest
Tanzania and early results are promising.
Zambia
We have conducted a drilling programme at Tandalwe Hill in the Kampumba
project area, together with a complete soil geochemistry survey of the
licence. The drill will now move to test targets in the Lunga licence.
Most recently, the Company was granted the Mokambo South licence, an area of
the Zambian Copperbelt lying on the eastern limb of the Mufulira Syncline and
containing a significant mineralised zone over which drilling was carried out
in the 1950s and 1970s. The Company will explore this area and the adjacent
Mokambo North licence in partnership with Copperbelt Minerals Limited.
Mozambique
We completed the regolith sampling programme at Namama (Majele) and we expect
the multi-element assay results very soon.
We made application for 11 new exploration licences covering areas prospective
for gold, silver, nickel, uranium and other commodities.
Conclusion
I believe that African Eagle has adopted the right strategy, combining the
comfort of portfolio diversity with the ability to advance projects as fast as
possible towards production. We have the right people looking for the right
commodities in the right geological and political settings. With our partners`
funding of advanced projects to feasibility we can use the cash in the bank to
fund our next two years` exploration programmes.
John Park
Chairman
African Eagle Resources plc
28 September 2007
For further information, see the Company`s web site www.africaneagle.co.uk or
contact one of the following:
Mark Parker
Managing Director
+44 20 7248 6059
+44 77 5640 6899
Nicola Marrin
Seymour Pierce
+44 20 7107 8000
Ed Portman / Leesa Peters
Conduit PR, London
+44 20 7429 6607
James Duncan
Russell & Associates, Johannesburg
+ 27 11 8803924 / +27 82 8928052
About African Eagle
African Eagle is a diversified mineral exploration and development company
operating in eastern and central Africa. The Company`s principal advanced
projects are the Mkushi Copper Mines project in Zambia and the Miyabi gold
project in Tanzania, which are being fast-tracked towards production. The
Company also holds a large well-balanced portfolio of promising earlier stage
gold and base metal projects, including the Ndola copper project and the Eagle
Eye iron-oxide copper gold project.
Zambia, Tanzania and Mozambique, the sites of African Eagle`s projects, are
all countries which have highly prospective geology, relatively low above
ground risks and track records of successful major investments in the metals
and minerals industries.
African Eagle specialises in project generation and exploration. To take its
discoveries into production, it seeks to sign up industry partners with
records of successful mine development. These joint ventures and, in time, the
revenue from advanced projects, will finance future exploration and new
discoveries.
Qualified Person
Information in this report relating to exploration results is based on data
reviewed by Mr Christopher Davies BSc, MSc, DIC, FSEG, FAusIMM, Operations
Director for African Eagle, who is a Fellow of the Australasian Institute of
Mining and Metallurgy, has more than 26 years relevant experience in mineral
exploration and is a Qualified Person under AIM rules. Mr Davies consents to
the inclusion of the information in the form and context in which it appears.
Technical terms
A glossary of technical terms used by African Eagle in this announcement and
other published material may be found at www.africaneagle.co.uk/african-eagle-
projects-glossary.html
Date: 28/09/2007 08:46:27 Produced by the JSE SENS Department.
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