(AFE.L) African Eagle Resources PLC Buy/Sell

In August, the Company raised £3.3M additional capital through a Placing and Offer, to address these issues and progress the project towards feasibility. Further metallurgical testing has commenced on drill core samples at Mintek laboratories in South Africa and the Company has started infill drilling at Dutwa and resource drilling at Ngasamo.

African Eagle acquired the Dutwa project for its gold potential, but the Company's exploration team quickly recognised that there was significant nickel laterite potential. There is very little outcrop, so the Company conducted extensive ground magnetic surveys to reveal the underlying structure and geology. The Company also compiled historical data, including detailed geological maps and trench results dating from 1956, when rock chip samples from the trenches over the ultramafic rocks were reported as yielding up to 1.9% nickel.

Greenstones and granites underlie the project area. The greenstones, of Archaean Nyanzian age, are mostly metamorphosed volcanic and sedimentary rocks, with some banded iron formation in the east. Several large ultramafic bodies occur within the greenstones and the nickel laterites form a blanket up to 60m thick on top of these.

To investigate the nickel discovery, the Company undertook trial drilling in June 2008. The results were very encouraging and a 139-hole reverse circulation (RC) drilling programme was completed to delineate the resource. African Eagle also undertook a 10-hole diamond drill programme to obtain core samples for metallurgical testing and density measurements.

In November 2008, African Eagle announced an initial Inferred Mineral Resource estimate of 31 million tonnes at an average grade of 1.1% nickel and 0.034% cobalt. At a cut-off grade of 0.5% nickel, this gives Dutwa a contained metal endowment of some 340,000 tonnes of nickel and 11,000 tonnes of cobalt. The estimate was prepared by independent consultants SRK Consulting (UK) Ltd in line with the Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC Code). A little additional drilling and more advanced geostatistics and deposit modelling will be needed to upgrade the resource to Indicated category.

Ngasamo Hill, 5km west of the Dutwa deposit, is geologically very similar and holds a laterite deposit of the order of 15 to 20 million tonnes, which would increase the global resource at Dutwa from the currently defined 31 million tonnes at 1.1% nickel, to some 45 - 50 million tonnes. Drilling and metallurgical tests will be needed to
confirm the size, grade and compatibility of Ngasamo. Under its

agreement with Ngasamo's owners, (Safina a.s. of the Czech Republic and its Tanzanian subsidiary Precious Metals Refinery Company Ltd), African Eagle can earn an interest of at least 50% and up to 75% in Ngasamo by carrying out exploration and evaluation work, up to a feasibility study.

Mintek Laboratories in Johannesburg investigated the mineralogy and metallurgy of mineralised drill samples from the deposit, including extended 'bottle roll' sulphuric acid leach tests to investigate metal recoveries and acid consumption. Mintek also carried out mineralogical characterisation by X-ray diffraction (XRD), scanning electron microscopy (SEM) and polished section work.

The bottle roll test results showed nickel extractions of 70-90% with an average of 83%. Cobalt extractions were mostly in the range 70 to 85%. The acid consumptions, averaging 209kg/t, are very low compared to other Ni laterite ores worldwide.

The mineralogical investigations show that the laterite is extremely silica-rich, with low iron and magnesium content, indicating that Dutwa is not a typical laterite nickel deposit. Mintek believes that much of the nickel and cobalt occurs in "wad" with manganese content of 20-60%, nickel content of up to 20% and cobalt content of up to 10%.

The unusual mineralogy of the deposit is highly beneficial, as it results in lower acid consumption and is expected to give good heap leach permeability or favourable liquid-solid separation in tank leaching. The concentration of nickel and cobalt in the manganese wad offers the possibility that mechanical selection of high-grade material may allow reduced throughput and hence a lower cost processing plant.

The Company is also investigating other potential nickel laterite deposits in Tanzania, and has completed a trial programme of RC drilling to test a laterite at its Zanzui project, 60km to the south
of Dutwa. Results included 42m at 1.05% nickel (including 6m at

2.80%) and 33m at 0.91% nickel (including 9m at 1.41%).

---END OF MESSAGE---

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

African Eagle's Managing Director Mark Parker comments, "We are pleased to report significant progress at our exciting Dutwa Nickel Project in Tanzania. Our 120-hole RC drilling programme is now underway and laboratory testwork is well advanced. We have chosen a contractor for a transport and logistics study and will appoint a contractor for advanced deposit modelling shortly."

"We have also advertised for a Project Manager with a process metallurgical background, one of a number of recruitments and management changes required to transform African Eagle from an exploration group into a nickel development and mining company."

The Dutwa Scoping Study, delivered in July, made a strong investment case for the project, indicating a likely Internal Rate of Return of about 25% at the current nickel price of around US$8.50/lb, or 17% at the base case price of US$7/lb. Net Present Value estimates at these nickel prices were US$530 million and US$200 million (pre-tax) respectively.

The Study identified several key areas which could have major positive impacts on the economics of the project. These include increasing the global resource by delineating the adjacent Ngasamo deposit, determining the optimum processing method by conducting further metallurgical testwork, and reducing the cost of transporting chemical reagents to the mine site.

Through a successful Offer and Placing in August, the Company raised £3.3 million additional capital to fund these studies and progress the project towards feasibility.

Drilling and deposit modelling

African Eagle has now begun a programme of approximately 60 infill and step-out drill holes on the main nickel deposit at Wamangola Hill, with the objective of increasing the JORC Inferred Mineral Resource of 31 million tonnes at an average grade of 1.1% nickel, estimated by SRK in November 2008. The drilling should allow the resource to be delineated to Indicated category.

After completion of this programme, drilling will move to the nearby Ngasamo Hill, which has a laterite blanket similar to Wamangola Hill and affords the opportunity to increase the current resource by another 15-20 million tonnes. African Eagle is in joint venture with Safina a.s. of the Czech Republic, owners of the mineral title to Ngasamo Hill, and can earn a 75% interest by including Ngasamo in the global feasibility study.

An independent consultant will be contracted shortly to carry out deposit modelling and mine planning on the drill results.

Metallurgical Testwork

Another 250 kilograms of drill core has been despatched to Mintek laboratories in South Africa for the second phase of metallurgical testwork, which includes tank and column leach tests, rock strength
and abrasion measurements and agglomeration tests. This work will

help to determine the best extraction process and optimise the parameters such as acid concentration, residence time and leach temperature.

Once the results of the phase two testwork are in hand, the Company plans to undertake more diamond drilling to provide a further one tonne of drill core for advanced metallurgical testwork.

Transport Study

Transport and logistics costs will be a significant contributor to overall operating costs and the Company is currently assessing bids to conduct a detailed investigation into the transport alternatives. The study will examine port options and road, rail and lake transport in both Tanzania and Kenya, with the aim of minimising transport costs.

Project Manager

African Eagle has begun the process of transformation from an exploration group into a nickel development and mining company. New staff will be recruited to bring in the skills needed, and the Company is currently advertising for a Project Manager with a process metallurgical background and project management experience. Details of the post are available on the Company's web site and in the mining press.

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/p/glossary.asp

For further information:

Mark Parker Managing Director African Eagle +44 20 7248 6059 +44 77 5640 6899

Nicola Marrin Seymour Pierce Limited, London Nominated Adviser + 44 20 7107 8000

Charmane Russell Russell & Associates, Johannesburg + 27 11 8803924 +27 82 8928052

Ed Portman / Leesa Peters Conduit PR, London +44 20 7429 6607 +44 77 3336 3501

About African Eagle

African Eagle is a diversified mineral exploration and development company operating in eastern and central Africa. The Company's principal advanced assets are the Dutwa nickel laterite discovery in Tanzania, where the Company completed a scoping study in June 2009, and its 49% interest in the Mkushi Copper Mines joint venture project in Zambia, for which a draft feasibility study was completed in Q4 2008.

African Eagle is evaluating a second promising nickel laterite deposit at Zanzui in Tanzania and has defined a JORC gold resource estimated at half a million ounces at its Miyabi gold project in Tanzania. The Company holds a well-balanced portfolio of promising earlier stage gold, copper, platinum and uranium projects, including the Ndola and Mokambo projects in the Zambian Copperbelt and the Igurubi gold project in Tanzania.

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.

In December 2008, African Eagle resolved to prioritise the Dutwa project, because the Board believes that, of all the Company's projects, it offered the greatest potential to add value. To take its other discoveries into production, African Eagle is seeking industry partners with records of successful mine development, by means of joint ventures, farm-ins, spin-outs or other mechanisms.

About the Dutwa Project

African Eagle has discovered a significant nickel laterite deposit in
the Dutwa project area in the Lake Victoria Goldfield. Within

Tanzania, the project is favourably situated 100km east of the railhead at Mwanza and close to the main Mwanza-Nairobi trunk road, a major power line and the shore of Lake Victoria.

The Company holds a 90% interest, with option to acquire 100%, over the Dutwa laterite deposit and in 2009, signed a Letter of Intent for an option and joint venture over another nickel laterite at Ngasamo, 5km west. In all, African Eagle has explored a total area of more than 750km² in the project area.

Since the discovery of the Dutwa nickel deposit in June 2008, African Eagle has explored the project very quickly and cost-effectively, including resource drilling and an independent resource estimate; laboratory metallurgical and mineralogical tests which revealed that
the deposit could be processed efficiently by sulphuric acid

leaching. On 24 June 2009, the Company announced the results of its "proof of concept" scoping study. The study, by GRD Minproc of Perth, Western Australia, indicated that the project can be economically viable, and African Eagle has now begun work towards a definitive feasibility study.

The Study indicates that Dutwa, if it were in production today, would be profitable. Earnings, on an EBIT basis, would be of the order of $110 million per annum on average over the life of mine, giving an internal rate of return around 20%.

As a potentially low-cost producer, the upside for the Dutwa project is considerable if nickel prices are above the $7/lb used in the base case. The following table shows the key metrics for several upside cases.

Ni price US$/lb 9.00 8.50 8.00 7.50 7.00 6.50
Life of mine EBIT $M 2,600 2,300 2,000 1,800 1,500 1,200
Pre-tax IRR % 31 27 24 21 17 13
Post-tax IRR % 27 24 21 18 15 11
Pre-tax NPV $M 640 530 420 310 200 90
Post-tax NPV $M 430 350 270 190 110 30
Base case: Abbreviations:
Nickel price = US$ 7/lb ($15,430/tonne) EBIT = Earnings before
Cobalt price = US$ 10/lb interest and tax
Discount rate = 10% IRR = Internal Rate of
Transport cost = US$100/tonne Return
(8¢/tonne/km) NPV = Net Present Value
Tax rate = 30%, fiscal incentives not DCF = Discounted cash flow
accounted analysis

Royalty = 3%
All numbers stated to 2

The financial modelling was conducted in significant digits US dollars with an estimated accuracy of ±30%

The Study adopted a fairly broad brush approach to many of the costs, to demonstrate "proof of concept" and provide indicative economics. GRD Minproc estimated individual capital and operating costs to ± 30%, based on their considerable experience with nickel laterites. These variables will be determined with more accuracy and confidence during the forthcoming feasibility work.

The Study identified several key areas where further testwork and detailed study are especially likely to result in improvements to the
"bottom line" or to important gains in confidence. These areas

include:

In August, the Company raised £3.3M additional capital through a Placing and Offer, to address these issues and progress the project towards feasibility. Further metallurgical testing has commenced on drill core samples at Mintek laboratories in South Africa and the Company has started infill drilling at Dutwa and resource drilling at Ngasamo.

African Eagle acquired the Dutwa project for its gold potential, but the Company's exploration team quickly recognised that there was significant nickel laterite potential. There is very little outcrop, so the Company conducted extensive ground magnetic surveys to reveal the underlying structure and geology. The Company also compiled historical data, including detailed geological maps and trench results dating from 1956, when rock chip samples from the trenches over the ultramafic rocks were reported as yielding up to 1.9% nickel.

Greenstones and granites underlie the project area. The greenstones, of Archaean Nyanzian age, are mostly metamorphosed volcanic and sedimentary rocks, with some banded iron formation in the east. Several large ultramafic bodies occur within the greenstones and the nickel laterites form a blanket up to 60m thick on top of these.

To investigate the nickel discovery, the Company undertook trial drilling in June 2008. The results were very encouraging and a 139-hole reverse circulation (RC) drilling programme was completed to delineate the resource. African Eagle also undertook a 10-hole diamond drill programme to obtain core samples for metallurgical testing and density measurements.

In November 2008, African Eagle announced an initial Inferred Mineral Resource estimate of 31 million tonnes at an average grade of 1.1% nickel and 0.034% cobalt. At a cut-off grade of 0.5% nickel, this gives Dutwa a contained metal endowment of some 340,000 tonnes of nickel and 11,000 tonnes of cobalt. The estimate was prepared by independent consultants SRK Consulting (UK) Ltd in line with the Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC Code). A little additional drilling and more advanced geostatistics and deposit modelling will be needed to upgrade the resource to Indicated category.

Ngasamo Hill, 5km west of the Dutwa deposit, is geologically very similar and holds a laterite deposit of the order of 15 to 20 million tonnes, which would increase the global resource at Dutwa from the currently defined 31 million tonnes at 1.1% nickel, to some 45 - 50 million tonnes. Drilling and metallurgical tests will be needed to
confirm the size, grade and compatibility of Ngasamo. Under its

agreement with Ngasamo's owners, (Safina a.s. of the Czech Republic and its Tanzanian subsidiary Precious Metals Refinery Company Ltd), African Eagle can earn an interest of at least 50% and up to 75% in Ngasamo by carrying out exploration and evaluation work, up to a feasibility study.

Mintek Laboratories in Johannesburg investigated the mineralogy and metallurgy of mineralised drill samples from the deposit, including extended 'bottle roll' sulphuric acid leach tests to investigate metal recoveries and acid consumption. Mintek also carried out mineralogical characterisation by X-ray diffraction (XRD), scanning electron microscopy (SEM) and polished section work.

The bottle roll test results showed nickel extractions of 70-90% with an average of 83%. Cobalt extractions were mostly in the range 70 to 85%. The acid consumptions, averaging 209kg/t, are very low compared to other Ni laterite ores worldwide.

The mineralogical investigations show that the laterite is extremely silica-rich, with low iron and magnesium content, indicating that Dutwa is not a typical laterite nickel deposit. Mintek believes that much of the nickel and cobalt occurs in "wad" with manganese content of 20-60%, nickel content of up to 20% and cobalt content of up to 10%.

The unusual mineralogy of the deposit is highly beneficial, as it results in lower acid consumption and is expected to give good heap leach permeability or favourable liquid-solid separation in tank leaching. The concentration of nickel and cobalt in the manganese wad offers the possibility that mechanical selection of high-grade material may allow reduced throughput and hence a lower cost processing plant.

The Company is also investigating other potential nickel laterite deposits in Tanzania, and has completed a trial programme of RC drilling to test a laterite at its Zanzui project, 60km to the south
of Dutwa. Results included 42m at 1.05% nickel (including 6m at

2.80%) and 33m at 0.91% nickel (including 9m at 1.41%).

---END OF MESSAGE---

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

Dear Shareholder

In late 2008, on the basis of a comprehensive strategic review of our assets and activities, African Eagle's Board determined that the Company should concentrate its efforts and resources on the Dutwa nickel laterite project in Tanzania. We believe that Dutwa, of all our projects, for each dollar spent would deliver the best return to shareholders.

Our adherence to this strategy has paid off, with the results of metallurgical testwork announced in February and the Scoping Study completed in June showing that Dutwa is likely to be a highly
profitable operation, thanks to its uniquely straightforward

metallurgy. Our farm-in agreement over the adjacent Ngasamo deposit, signed in April, should add at least 50% to the project resource.

Our successes at Dutwa allowed us to raise £3.37 million new capital via a highly successful Offer and Placing, completed early in August.

Dutwa

At the end of November 2008 and on completion of a Reverse Circulation (RC) and diamond drilling programme the Company published an estimate for Dutwa which showed there to be 340,000 tonnes of contained nickel and 11,000 tonnes of contained cobalt in a resource of 31 million tonnes at 1.1% nickel and 0.034% cobalt. The resource report indicated the potential to increase both the resource size and the confidence level.

The metallurgical characteristics of nickel laterites are of crucial importance and Dutwa's unique high silica, low iron and magnesium mineralogy resulted in very positive results from the leach test work carried out on drill core samples, showing that recoveries in excess of 80% nickel could be achieved with very low acid consumptions. Coupled with the resource determination we were encouraged, after a thorough and detailed bidding process, to award a contract for a scoping study on Dutwa to GRD-Minproc in March 2009.

To the 31 million tonnes resource at Dutwa, we added our share of the negotiated option and joint venture agreement over the adjacent Ngasamo deposit in April. This agreement with SAFINA a.s. has the potential to add up to an additional 15 to 20 million tonnes of nickeliferous laterite, which we believe to be very similar in mineralogy and nature to that at Dutwa. Under the agreement with
SAFINA, African Eagle is currently preparing to drill and

metallurgically test this potentially major increment to the global nickel resource of a larger Dutwa project.

The draft Scoping Study prepared by GRD-Minproc was presented to African Eagle in its final form in July. The study evaluated a number of potential metallurgical processing routes and used modelling to optimize a mining plan and cut-off grade for each process route using the resource determined earlier, together with an upside component
based on our expectations of the input Ngasamo could make.

Atmospheric tank leaching was determined to be the most likely process route but heap leaching might also be viable.

Financial modelling of the technical outcomes showed that at today's nickel prices, the Dutwa project could be expected to generate a net cash-flow (EBIT) of US$53 million to US$130 million per year over a mine life of 15 to 20 years, depending on the processing method.

In short, Dutwa would be profitable if it was in operation today.

With opportunities to improve the bottom line still further by optimising revenue and reducing costs, there is a very clear case for further feasibility study and the Company has commenced work on this. Initial focus will be directed towards investigating ways to reduce costs, especially transport costs, and increase revenues. We will also drill the adjacent Ngasamo deposit, improve the resource model and refine the metallurgical information. A start has been made on the additional metallurgical test work at Mintek Laboratories in South Africa, including column and tank leach tests, sizing analysis and physical test work to establish more definitively the optimum processing routes.

Other Projects Exploration on other projects has been limited to a VTEM helicopter electromagnetic survey to search for "blind" copper zones at Mkushi. This was co-funded by CGA Mining, our partner on the project. We also announced, in May, an in-house deposit model showing potential for in excess of 700,000 ounces at Igurubi, based on interpretation of existing data on our most advanced gold and copper projects.

The board is reviewing all alternatives with regard to these projects including the outright sale, joint venture and other possible corporate initiatives. The clear strategy is to realise value for the Company and its shareholders from what are some very attractive properties. Financing

The successful results from Dutwa, coupled with the recovery of metals prices since January, encouraged us to raise new capital for the next stage of work. More than half of our shares are held by private investors and we were very keen to give as many shareholders as possible the opportunity to take part in the capital raising, whilst keeping costs to a minimum. To do so, we successfully worked through a raft of complex rules and regulations in Europe, although we were not able to extend the Offer into South Africa. The Open Offer to shareholders was in fact oversubscribed, and together with a small Placing to institutional investors, we raised £3.37 million (gross). The commitment of our shareholders to the company in supporting the
financing is a clear endorsement of the Board's strategy to

concentrate its effort on the Dutwa nickel laterite project.

Together with the Company's existing cash resources, (which, through our effective cash conservation measures amounted to £1.5 million at June 30, 2009), the net proceeds of the Placing and Open Offer will, to a large extent, be used to make a start on work leading to a feasibility study on Dutwa and for general working capital.

In Conclusion

In summary then, 2009 to date has been about advancing Dutwa, with a resource determined, metallurgical processing examined, additional potential resource tonnage added, a positive scoping study completed and a full feasibility study commenced. All these culminated in a successful placing and Open Offer to shareholders completed in early August, which raised in excess of £3.3 million.

As I write this in mid September, the nickel price is up around $17,500, from $11,000 at the end of April when I wrote the statement for the 2008 Annual Report. With this rise, the feasibility study on Dutwa underway, and the green shoots of a recovering global economy which I hoped for six months ago now in evidence, I think we're on track to deliver a much better 2009 than I cautiously promised to shareholders in April.

For further information:

Mark Parker Managing Director African Eagle +44 20 7248 6059 +44 77 5640 6899

Nicola Marrin Seymour Pierce Limited, London Nominated Adviser +44 20 7107 8000

Charmane Russell Russell & Associates, Johannesburg +27 11 8803924 +27 82 8928052

Ed Portman / Leesa Peters Conduit PR, London +44 20 7429 6607 +44 77 3336 3501

Condensed Consolidated Statement of Comprehensive Loss For the six months ended 30 June 2009

6 months to 30 6 months to Year to 31
June 2009 30 June 2008 December 2008
Unaudited Unaudited Audited
£ £ £
Depreciation expense (30,461) (40,914) (86,405)
Employee benefits expense (205,723) (545,192) (979,613)
Impairment of deferred (145,071) (83,738) (4,442,563)

exploration expenditure
Impairment of goodwill - - (103,188)
Other expenses (231,149) (252,760) (462,229)
Operating loss (612,404) (922,604) (6,073,998)

Finance costs:
Bank interest receivable 12,467 149,977 228,856
Foreign exchange (14,037) (36,020) 363,183

(loss)/gain

Loss before tax (613,974) (808,647) (5,481,959)
Income tax expense - - -

Loss attributable to
equity owners for the (613,974) (808,647) (5,481,959)

period

Other comprehensive (loss)/income:

Exchange differences on (1,751,419) 1,106,220 1,907,024

translation of foreign operations
Available for sale 617 (2,679) (4,495)

investments

Other comprehensive (1,750,802) 1,103,541 1,902,529

(loss)/income for the period

Total comprehensive (2,364,776) 294,894 (3,579,430)

(loss)/income attributable to equity owners for the period

Loss per share:
Basic/diluted loss per (0.3p) (0.4p) (2.6p)

share from total and continuing operations
Headline/diluted loss per (0.2p) (0.4p) (1.0p)

share from total and continuing operations

All operations are continuing.

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

Condensed Consolidated Statement of Financial Position At 30 June 2009

30 June 2009 30 June 2008 31 Dec 2008
Unaudited Unaudited Audited
Note
£ £ £

ASSETS

Non-current assets
Property, plant and 78,538 160,798 122,246

equipment
Goodwill - 103,188 -
Available for sale 2,583 3,783 1,967

investments
Investment in associates 1,910,516 2,362,972 2,123,371
Investment in joint 34,595 - 35,293

ventures
Deferred exploration 4 8,868,615 10,925,073 9,717,268

costs

Total non-current assets 10,894,847 13,555,814 12,000,145

Current assets
Other receivables 140,393 747,774 137,636
Cash and cash equivalents 1,538,250 4,631,777 2,709,957
Total current assets 1,678,643 5,379,551 2,847,593
Total assets 12,573,490 18,935,365 14,847,738

LIABILITIES

Current liabilities
Other payables (350,546) (706,653) (269,218)
Total liabilities (350,546) (706,653) (269,218)
Net assets 12,222,944 18,228,712 14,578,520

EQUITY

Equity attributable to owners of the parent:
Share capital 2,125,402 2,125,402 2,125,402
Share premium account 19,323,784 19,325,622 19,323,784
Merger reserve 705,723 705,723 705,723
Available for sale (13,077) (11,878) (13,694)

revaluation reserve
Foreign currency reserve (1,033,669) (83,054) 717,750
Retained losses (8,885,219) (3,833,103) (8,280,445)
Total equity 12,222,944 18,228,712 14,578,520

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

Condensed Consolidated Statement of Changes in Equity At 30 June 2009

Share Share Merger Available Foreign Retained Total
capital premium reserve for sale currency losses attributable
account revaluation reserve to
reserve owners
Unaudited
£ £ £ £ £ £ £
Balance at 31 19,311,622 705,723 (9,199) (1,189,274) (3,382,077) 17,560,197

December 2007 2,123,402

Loss for - - - - - (808,647) (808,647)

period Other comprehensive income:
Exchange - - - - 1,106,220 - 1,106,220

differences on translation of foreign operations
Available for - - - (2,679) - - (2,679)

sale investments

Total - - - (2,679) 1,106,220 (808,647) 294,894

comprehensive income for the period Transactions with equity owners for the first half of 2008:
Issue of 2,000 14,000 - - - - 16,000

share capital
Share issue - - - - - - -

costs
Share based - - - - - 357,621 357,621

payments
Total 2,000 14,000 - - - 357,621 373,621

transactions with equity owners
Balance at 30 2,125,402 19,325,622 705,723 (11,878) (83,054) (3,833,103) 18,228,712

June 2008

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

Condensed Consolidated Statement of Changes in Equity (continued) At 30 June 2009

Share Share Merger Available Foreign Retained Total
Capital premium reserve for sale currency Losses attributable
account revaluation reserve to owners
reserve Audited
£ £ £ £ £ £ £
Balance at 31 19,311,622 705,723 (9,199) (1,189,274) (3,382,077) 17,560,197

December 2007 2,123,402

Loss for year - - - - - (5,481,959) (5,481,959)

Other comprehensive loss:
Exchange - - - - 1,907,024 - 1,907,024

differences on translation of foreign operations
Available for - - - (4,495) - - (4,495)

sale investments

Total - - - (4,495) 1,907,024 (5,481,959) (3,579,430)

comprehensive loss for the year Transactions with equity owners for 2008:
Issue of 2,000 14,000 - - - - 16,000

share capital
Share issue - (1,838) - - - - (1,838)

costs
Share-based - - - - - 583,591 583,591

payments
Total 2,000 12,162 - - - 583,591 597,753

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

December 2008

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

Condensed Consolidated Statement of Changes in Equity (continued) At 30 June 2009

Share Share Merger Available Foreign Retained Total
Capital premium reserve for sale currency Losses attributable
account revaluation reserve to owners
reserve Unaudited
£ £ £ £ £ £ £
Balance at 31 2,125,402 19,323,784 705,723 (13,694) 717,750 (8,280,445) 14,578,520

December 2008

Loss for - - - - - (613,974) (613,974)

period Other comprehensive loss:
Exchange - - - - (1,751,419) - (1,751,419)

differences on translation of foreign operations
Available for - - - 617 - - 617

sale investments

Total - - - 617 (1,751,419) (613,974) (2,364,776)

comprehensive loss for the period Transactions with equity owners for the first half of 2009:
Issue of - - - - - - -

share capital
Share issue - - - - - - -

costs
Share based - - - - - 9,200 9,200

payments
Total - - - - - 9,200 9,200

transactions with equity owners Balance at 30 2,125,402 19,323,784 705,723 (13,077) (1,033,669) (8,885,219) 12,222,944 June 2009

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

Condensed Consolidated Statement of Cash Flows For the six months ended 30 June 2009

6 months 6 months to 30 Year to 31
to 30 June June 2008 December 2008
2009 Unaudited Audited
Unaudited
£ £ £

Operating activities
Loss before taxation (613,974) (808,647) (5,481,959)

Adjustments for:
Depreciation 30,461 40,914 86,405
Exchange (gain)/loss (24) 1,298 (8,141)
Loss on disposal of 150 - 1,839

property, plant and equipment
Interest received (12,467) (149,977) (228,856)
Impairment of deferred 145,071 83,738 4,442,563

exploration expenditure
Share-based payments 9,200 357,621 583,591
MCJV - Group share of the 7,634 - 15,385

loss
Impairment of goodwill - - 103,188
Decrease/(Increase) in other (13,856) (320,049) 273,662

receivables
(Decrease)/Increase in other 66,682 (9,488) (116,230)

payables
Kujima - Group share of 762 - (1,540)

joint venture gain

Cash flows from operating (380,361) (804,590) (330,093)

activities

Investing activities
Payments to acquire - (31,391) (43,892)

property, plant and equipment
Payments for deferred (601,045) (1,571,051) (4,020,510)

exploration expenditure
Interest received 12,467 149,977 228,856
Investments in associates (168,379) (194,519) (185,718)
Investments in joint - - (33,753)

ventures

Cash flows used in investing (756,957) (1,646,984) (4,055,017)

activities

Financing activities
Proceeds from issue of share - 16,000 14,162

capital

Cash flows from financing - 16,000 14,162

activities

Net decrease in cash and (1,137,318) (2,435,574) (4,370,948)

cash equivalents
Cash and cash equivalents at 2,709,957 7,051,744 7,051,744

beginning of period
Exchange (gain)/loss (34,389) 15,607 29,161
Cash and cash equivalents at 1,538,250 4,631,777 2,709,957

end of period

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

Notes to the Condensed Consolidated Half Year Financial Statements For the six months ended 30 June 2009

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. The Company is listed on the Alternative Investment Market ("AIM") of the
London Stock Exchange and the Alternative Exchange of the

Johannesburg Stock Exchange Limited (AltX), and has consented to its shares being traded on the London PLUS Markets. 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, especially nickel, gold, and copper in Tanzania, Zambia and Mozambique.

The Group has sufficient financial resources following a successful fund raising (see note 5) to finance its exploration activities and for this reason the Directors continue to adopt the going concern basis in preparing the financial statements. African Eagle's unaudited condensed consolidated half year financial statements ("Financial Statements") are presented in pounds sterling (£), which is also the functional currency of the parent company. The Financial Statements were approved for issue by the Board of Directors on 23 September 2009.

2 Statement of Compliance and basis of preparation

The Financial Statements are for the six months ended 30 June 2009. They do not include all the information required for full annual financial statements and should be read in conjunction with the audited consolidated financial statements of the Group for the year ended 31 December 2008, which were prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU").

The financial information is prepared under the historical cost convention and in accordance with the recognition and measurement principles contained within IFRS as endorsed by the EU.

The revised version of IASB's key standard, IAS 1, Presentation of Financial Statements, is mandatory for periods beginning on or after 1 January 2009 and has been applied to these half year Financial Statements. The revised standard introduces new terms for the individual Financial Statements. The adoption of the standard does not affect the financial position of the Group. The measurement and recognition of the Group's assets, liabilities, income and expenses is unchanged.

The comparative amounts in the Financial Statements include extracts from the Company's consolidated financial statements for the year ended 31 December 2008. These extracts do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006 (the "Act").

Notes to the Condensed Consolidated Half Year Financial Statements For the six months ended 30 June 2009

3 Loss Per Share

(a) Basic loss per share

The basic loss per share is calculated as the loss for the period divided by the weighted average number of shares in issue during the period. 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.

Loss per share 6 months to 6 months to Year to
30 June 30 June 31 December

£ £ £
Loss for the period (613,974) (808,647) (5,481,959)

Weighted average number of shares 212,540,128 212,394,524 212,467,525 in issue
Basic & diluted headline loss per (0.3p) (0.4p) (2.6p)

share

(b) 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 8/2007 entitled Headline Earnings. The calculation of headline loss per share is net of tax at the UK prevailing rate of 28%. No diluted headline loss per share has been calculated as it would be anti-dilutive by reducing the headline loss per share.

Headline Loss

June June Dec 31,
30, 2009 30, 2008 2008
£ £ £ £ £ £
Gross Net Gross Net Gross Net
Loss for (613,974) (808,647) (5,481,959)

the period Adjusted for:

(Less)/plus 150 108 83,738 60,291 1,839 1,324

profit/loss on sale of fixed assets Plus
impairment 145,071 104,451 - 4,442,563 3,198,646

of exploration assets Plus
Group share 7,634 5,344 - 15,385 11,077

of associated loss Less
Group share 762 549 - (1,540) (1,109)

of Joint Venture Plus
impairment - - - 103,188 74,295

of Goodwill

Headline (503,522) (748,356) (2,197,725)

loss

Weighted
average 212,540,128 212,394,524 212,467,525

number of shares in issue Basic &
undiluted (0.2p) (0.4p) (1.0p)

headline loss per share

Notes to the Condensed Consolidated Half Year Financial Statements For the six months ended 30 June 2009

4 Intangibles

At 30 June 2009

Deferred Total
Exploration costs
£ £

Cost:
At 1 January 2009 9,717,268 9,717,268
Foreign currency exchange differences (1,326,422) (1,326,422)
Additions 622,840 622,840
Impairment costs (145,071) (145,071)
At 30 June 2009 8,868,615 8,868,615

At 30 June 2008

Goodwill on Deferred Total
Consolidation Exploration costs
£ £ £

Cost:
At 1 January 2008 103,188 8,441,854 8,545,042
Foreign currency exchange - 694,451 694,451

differences
Additions - 1,872,506 1,872,506
Impairment costs - (83,738) (83,738)
At 30 June 2008 103,188 10,925,073 11,028,261

At 31 December 2008

Goodwill on Deferred Total
Consolidation Exploration costs
£ £ £

Cost:
At 1 January 2008 103,188 8,441,854 8,545,042
Foreign currency exchange - 1,758,217 1,758,217

differences
Additions - 3,959,760 3,959,760
Impairment costs (103,188) (4,442,563) (4,545,751)
At 31 December 2008 - 9,717,268 9,717,268

Notes to the Condensed Consolidated Half Year Financial Statements For the six months ended 30 June 2009

5 Post-reporting date events

On August 7, 2009 the Company announced that the Open Offer to Eligible Shareholders ("Open Offer") was oversubscribed. After scaling back, the Open Offer raised Euro 2,499,939, equivalent to £2,136,700 at the then ruling exchange rate of 1.17 Euro to £1, and accordingly, 53,417,500 Offer Shares were issued at a price of 4p each. It also announced that a placing had been completed by Seymour Pierce, of 30,804,500 new Ordinary Shares with new and existing
investors at a price of 4p each, raising gross proceeds of

approximately £1.2 million (the "Placing"). Following the issue of these new Ordinary Shares there are 296,762,128 Ordinary Shares in issue.

The Directors subscribed for 1,222,500 shares in the Placing and 250,000 shares in the Open Offer.

Details of individual Directors' subscriptions and their consequent holdings and percentages following the Placing and the Offer are as follows:

Subscription Subscription Number of Percentage
in Placing in Offer Ordinary Shares of Enlarged
held, after the Share
Director Placing and Offer Capital
John Park 250,000 - 6,926,801 2.33%
Euan 250,000 - 1,060,000 0.36%

Worthington
Mark Parker 312,500 225,000* 4,033,857 1.36%
Christopher 152,500 25,000 971,730 0.33%

Davies
Bevan Metcalf 137,500 - 207,500 0.07%
Geoffrey 120,000 - 909,300 0.31%

Cooper

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