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HEADS OF AGREEMENT SIGNED FOR JOINT VENTURE IN ZAMBIA

News Report
23 May 2005

African Eagle Resources ("the Company", ticker AFE.L) is pleased to announce the signing of a Heads of Agreement covering the Company's Lunga licence in Zambia.

African Eagle's Chairman John Park comments "Seeking appropriate partners who can add value to our projects has been a thrust of our strategy for some time and we are delighted to have forged this alliance with a partner who has much to contribute to the exploration and finance of one of our promising licence areas. The arrangement will free African Eagle's own resources and enable us to focus more closely on our designated key projects".

Under the agreement, MSA Projects (Pty) Ltd ("MSA Projects") of South Africa can earn a 50% interest in the Lunga licence in Zambia by operating and managing exploration costing US$1 million over the next three years, subject to a minimum expenditure of US$250,000 within the next 18 months. MSA Projects can then earn an additional 25% interest in the first mining project and 20% interests in any other mining projects identified within the licence by completing bankable feasibility studies.

Lunga is a 1,956 km2 exploration licence situated within the Lunga basin in central Zambia, which has the potential for various styles of mineralisation including sediment hosted Copperbelt type, Iron Oxide Copper Gold ("IOGC"), carbonate-hosted zinc and calcrete uranium deposits. Exploration recently completed by African Eagle, including airborne geophysics, has greatly improved understanding of the geology and a limited drilling programme has intersected near-economic grades and thicknesses.

MSA Projects is a Johannesburg-based company with an impressive track record of discovering economic mineral deposits. Since 1992, exploration conducted by MSA Projects has led to three mines being brought into production in South Africa: the Messina platinum mine, the Marsfontein diamond mine and the Klipspringer diamond mine. MSA Projects is currently exploring three other project areas in Zambia for copper and gold.

African Eagle is in negotiations with other potential partners regarding joint ventures over projects elsewhere in Zambia and in Tanzania.

John Park
Chairman
African Eagle Resources plc