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HEADS OF AGREEMENT SIGNED FOR JOINT VENTURE IN TANZANIA

News Report
27 May 2005

African Eagle ("the Company", ticker AFE) is pleased to announce the signing of a Heads of Agreement for an option and farm-in joint venture covering the Company's Kakumbi project area in Tanzania.

African Eagle's Chairman John Park comments "We are delighted to have concluded this agreement with Australian listed Resolute Mining Ltd over a very promising gold area. The deal is in line with our strategy of forging partnerships with companies who can contribute expertise and finance to take our projects forward, and follows our recent announcement of a similar agreement with MSA over the Lunga licence in Zambia."

Under the agreement, Resolute Mining Limited (Resolute) of Australia, through its Tanzanian subsidiary, can earn a 51% interest in African Eagle's Kakumbi gold project by operating and managing exploration costing US$1.15 million over the next three years and can earn a further 14% interest by expending an additional US$1.85 million on exploration.

Kakumbi lies 1.5km north of Nyakafuru, a gold deposit which contains a reported resource of 730,000 ounces at the relatively high grade of 6.3 g/t. African Eagle's exploration work has confirmed that gold mineralised structures also exist on the Kakumbi property, with grab sampling of four areas of abandoned artisanal workings returning gold grades of up to 17.7g/t and geochemical surveys revealing several areas of anomalous gold.

Resolute owns and operates Golden Pride, which became Tanzania's first modern gold mine when it commenced production in 1999 and currently produces 160,000 ounces per annum. Resolute is undertaking a major exploration programme to explore the Nyakafuru licence and adjacent areas.

John Park
Chairman
African Eagle Resources plc