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MKUSHI DRILLING UPDATE

News Report
23 August 2005

The latest results are from drilling in an area known as H-Zone, which is a southwest extension of the copper mineralisation at the 30m deep 1960s-era open pit at Munshiwemba. Mineralised drill intercepts include 70m averaging 0.8% copper, 40m at 1.2% and 110m at 0.5%.

African Eagle's Mkushi Project is located 180km northeast of the Zambian capital of Lusaka and 160km southeast of Kitwe in the central Copperbelt. Seven known copper deposits lie completely within the Company's Mkushi licence area, on the 14km long Mtuga shear zone. Two of these deposits, Mtuga and Munshimwemba, were partly mined during the 1920s and 1960s.

Exploration reports dating from before African Eagle's tenure indicate that substantial copper resources remain in the area. The past exploration also identified many other copper targets which were never drilled. A report written for the state copper company ZCCM in 1990 estimated that a resource of 30m tonnes at 1.25% copper could exist, but none of these previous resource estimates were made to modern standards of resource reporting.

African Eagle's current exploration is aimed at verifying the existence of the deposits described in the old reports and at applying modern methods to locate additional resources. If this is successful, then the Company will begin a pre-feasibility study aimed at enabling the project to be taken into production.

African Eagle's Directors believe that the deposits at Mkushi can be brought into production quickly and operated profitably, especially at current high copper prices. The deposits' proximity to one other and their apparently simple sulphide mineralogy should permit the use of a central low cost processing plant, feeding concentrate to the smelters on the nearby Copperbelt. The reprocessing of tailings dumps might provide early cash flow.

The H-Zone contains the southwest extension of the copper mineralisation at the Munshiwemba open pit, which was mined to a depth of 30m in the late 1960s and early 1970s. African Eagle drilled seven inclined diamond drill holes at H-Zone to depths of 71 to 168m. Mineralised intercepts include 70.4m at 0.8% copper, 53.1m at 0.7%, 39.5m at 1.2%, 18m at 1.3%, 13.6m at 1.3% and 109.5m at 0.5%. For a map showing the locations of the holes, see the Company's web site at www.africaneagle.co.uk/projects-mkushi.html.

All seven holes intersected mineralisation and the results show that the H-Zone has substantial width over at least 350m of strike, remaining open along strike both to the southwest and to the northeast towards Munshimwemba. The widths and grades of the mineralised intercepts are as follows:

The new drill holes are part of African Eagle's programme to re-evaluate the copper resources reported prior to the Company's tenure at Mkushi. Results from the northeast-most deposit, Coloquo, were reported by the Company in June of this year. (www.africaneagle.co.uk/news-109.html). The results of African Eagle's drilling to date broadly support the old data.

The Company is currently drilling six further holes to evaluate the mineralisation beneath the Munshimwemba open pit and expects results soon from four drill holes already completed to investigate the Mtuga deposit. African Eagle has begun geophysical induced polarisation (IP) and magnetic surveys covering the entire Mtuga shear and expects these to generate new and previously unidentified targets. Results are also awaited from an evaluation of the mineralised tailings from the old mining operations at Mtuga and Munshimwemba. The Company has applied to extend its prospecting licence to cover surrounding areas.

African Eagle's Operations Director, Chris Davies, comments, "These latest results show that the main copper mineralised zone extends several hundred metres southwest of the old Munshimwemba open pit. The results, together those reported in June from Coloquo, 2km northeast of the pit, support the Directors' belief that the exploration potential along the mineralised Mtuga shear is substantial".

John Park
Chairman
African Eagle Resources plc