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JOINT VENTURE WITH PHELPS DODGE MINING (ZAMBIA) LIMITED- NDOLA COPPER PROJECT

News Report
26 Feb 2007

African Eagle Resources plc ("African Eagle" or "the Company", ticker AIM: AFE) is pleased to announce that the Zambian Minister of Mines and Mineral Development has given his consent to the earn-in agreement which was signed on 3rd August 2006 between the Company and Phelps Dodge Mining (Zambia) Limited (PDMZ), a wholly owned subsidiary of the Phelps Dodge Exploration Corporation.

All of the pre-conditions to the earn-in agreement have now been satisfied and accordingly PDMZ has now subscribed for the initial tranche of 5,908,754 AFE shares at a price of 11.0275p per Ordinary Share, representing a 10% premium to the average closing mid-market price of AFE's shares for the 10 consecutive dealing days immediately preceding 15 February 2007 and equivalent to a value of US$1,273,333 or £651,588. Following this issue, PDMZ now holds approximately 3.84% of the Company's share capital. Application has been made for the admission of the new Ordinary Shares to trading on AIM and dealings are expected to commence on or about 1 March 2007.

Under the terms of the earn-in agreement, AFE is spending at least 75% of the amount subscribed on an agreed 15-month exploration programme on the Ndola licence. The balance will be spent on other AFE projects and general working capital. Within 12 months PDMZ will subscribe for a second tranche of shares to a value of US$1 million. Under the agreement, PDMZ can earn a 51% interest in the project by spending a further US$3 million on exploration and then an additional 19% by completing a bankable feasibility study.

African Eagle's Managing Director, Mark Parker, comments: "We are pleased that PDMZ's share subscription has now been completed. We have already largely completed our basic surveys over this highly prospective licence and have now commenced drilling on our priority targets. Our Agreement with PDMZ is in line with African Eagle's strategy of working with partners to take our most promising projects through to production decisions."

John Park
Chairman
African Eagle Resources plc