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OPTION SIGNED ON MSASA GOLD PROJECT

News Report
3 May 2006

African Eagle Resources plc (the Company, ticker AFE) is pleased to announce that it has signed an option agreement with MDN Northern Mining (Minières du Nord) (Toronto Stock Exchange TSX, Symbol MDN) over the Msasa gold project in Tanzania.

Under the option, MDN has undertaken to invest an initial US$200,000 in exploration and, subject to successful results, can then earn a 51% interest in the project by investing a further US$ 1.7 million by January 2010. MDN can then increase its interest to 65% by financing a feasibility study with respect to the property.

MDN already holds a 30% interest in the Tulawaka Gold Mine which is located just 15 km to the northwest of the Msasa project. Tulawaka has reported proven and probable Reserves of 546,000 ounces of gold, at a grade of 12.2 grams per tonne. The mine was commissioned in March 2005 and is operated by Barrick Gold, MDN's majority partner in the project. Gold production in Tulawaka's first year of operations to March 2006 was 147,093 ounces.

African Eagle recently completed a programme of 31 reverse circulation drill holes at Msasa which intersected gold mineralization in several quartz veins apparently similar to those at the Tulawaka mine. The best intersection of this programme was 81 g/t gold over 9 metres, including 241 g/t over 3 metres.

Pursuant to the option agreement, MDN plans immediately to launch a follow-up programme of step-out drilling to determine the extent of the high grade mineralization and to test various other targets, which have already been identified inside the Msasa licence.

Mark Parker, African Eagle's Managing Director comments "We are very pleased to welcome MDN Northern Mining as our partner on the Msasa project and look forward to a productive working relationship. MDN has gained a very good understanding of the geology and mineralisation of the area and will be able to evaluate Msasa efficiently from its nearby operating base at Tulawaka. The agreement with MDN is in line with our policy of finding quality development partners for projects from our substantial project portfolio".

John Park
Chairman
African Eagle Resources plc