News releases

Dutwa Update - Appointment of Project Manager

09th March 2010

AFRICAN EAGLE APPOINTS PROJECT MANAGER (METALLURGY)

FOR THE DUTWA NICKEL FEASIBILITY STUDY, TANZANIA

Top hydro-metallurgist joins Dutwa team

Dr Chad Czerny to lead Dutwa feasibility study

· World authority on nickel laterite processing

· More than 20 years technical management and research and development experience

· Key member of project teams which developed treatment processes for some of the world's best known nickel laterites

· Appointment advances Company's transition from explorer to producer

African Eagle today announced the appointment of Dr Chad Czerny as Project Manager (Metallurgy) for the Dutwa Oxide Nickel Project in Tanzania.

Managing Director Mark Parker comments, "We are delighted that Dr Czerny is joining our Dutwa development team. Dr Czerny is one of the world's top research and development hydro-metallurgists in the nickel laterite field and has worked on many of the best known deposits of this type. The appointment is another key step in African Eagle's transition from explorer to nickel producer. For the first time, it brings mineral processing expertise to the Company, to manage and implement the metallurgical testwork and engineering design programmes which will be critical to the success of the Dutwa project."

Dr Czerny yesterday said "I'm very pleased to be joining African Eagle and the Dutwa project team, as I believe Dutwa is one of the most exciting nickel projects being developed today, thanks to its unique ore mineralogy, which promises benefits of low costs of both plant construction and ore processing operation. This will be a busy but exciting period, for me personally and for African Eagle, as the Dutwa feasibility study gains momentum".

Dr. Czerny is an extractive metallurgist with more than 20 years technical and management experience in metallurgical R&D testwork and process development programmes for scoping and bankable feasibility studies.

In the last 15 years, Dr Czerny has specialised in the metallurgy of nickel laterites, working in BHP Billiton's global technology group from 2006 to 2009, and at SGS Lakefield Oretest's laboratory and hydrometallurgy pilot plant in Perth (Western Australia) from 1997 to 2006. He has commissioned and operated pilot plants for pressure acid leaching, heap and tank leaching, and the production of Ni/Co intermediates, including an integrated atmospheric leach, resin-in-pulp and elution pilot plant for treating nickel laterite ores at BHP Billiton's Newcastle Technology Centre (New South Wales).

Dr Czerny has worked on the development of treatment processes for ores from many of the world's best known nickel laterites, including Ravensthorpe, Niquel do Vermelho, Cawse, Bulong, Weda Bay, San Felipe, Marlborough, Koniambo, Soroako, Mt. Margaret and Murrin Murrin.

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

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

African Eagle is evaluating a second promising oxide nickel deposit at Zanzui in Tanzania, 60km south of Dutwa.

The Company also holds a 49% interest in the Mkushi Copper Mines joint venture in Zambia, for which a draft feasibility study was completed in Q4 2008. In addition, it 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.

The Company is seeking partners or buyers for its "non-core" copper, gold and uranium projects.

More information may be found on the Company's website, www.africaneagle.co.uk

African Eagle's oxide nickel projects

The Dutwa oxide nickel project, discovered in mid-2008, consists of two deposits within blankets of laterite or weathered rock on the tops of low ridges. African Eagle believes that the deposits together contain around 500,000 tonnes of nickel with by-product cobalt. Because the deposits lie at surface, mining costs will be very low.

The deposits lie 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 in the main Dutwa deposit, with option to acquire 100%, and is earning up to 75% of a second nickel deposit at Ngasamo, 6km to the west.

Since discovering the deposits in June 2008, African Eagle has explored the project very quickly and cost-effectively, completing an interim JORC-compliant resource estimate based on the drilling completed to September 2008 and laboratory metallurgical and mineralogical tests which showed that the deposit can be processed efficiently by sulphuric acid leaching.

In July 2009, the Company announced the results of a "proof of concept" scoping study by GRD Minproc, which indicated that the project would be profitable if it were in production today. At current nickel prices (~$10/lb), earnings over the life of mine would be of the order of $3 billion on an EBIT basis, giving an internal rate of return around 33%, after tax. African Eagle has now begun work towards a definitive feasibility study.

The economic viability of any nickel laterite deposit depends on its metallurgy, its resource geology and its location. Metallurgical tests have shown that the Dutwa ore is unusually, perhaps uniquely, amenable to acid leaching, with very low acid consumption and a very fast leach reaction compared to other nickel laterites around the world. These characteristics should allow the ore to be processed at atmospheric pressure using straightforward heap or tank leaching.

In addition to the Dutwa deposits, African Eagle holds the Zanzui nickel project, which is only 60km from Dutwa and offers potential economies of scale. Zanzui is possibly twice as large as Dutwa and preliminary metallurgical tests suggest that it shares the same fast, low-acid leaching characteristics. The Company is aware of at least two other, similar deposits in Tanzania.

UK Office & Registered Address : 2nd Floor, 6-7 Queen Street, London, EC4N 1SP, UK,
+44 20 72 48 60 59 Fax +44 20 76 91 77 45 e-mail info@africaneagle.co.uk
Conditions of use