African Eagle Resources plc

Chairman's Review of Progress

News Report
28 September 2007

African Eagle Resources plc ("African Eagle" or "the Company"; Ticker: AIM: AFE, AltX: AEA) today outlines progress made so far in 2007. The financial results for the half year ended 30 June 2007 have been released in a separate RNS.

Highlights

£7.4M raised on AltX listing in Johannesburg in August
Progress to pre-feasibility at Mkushi and delineation of new high-grade L-Zone
Partnership signed with Randgold on Miyabi and drilling already well advanced
Ndola Copperbelt project advancing positively in partnership with Phelps Dodge
Phase-1 drilling completed to test Kampumba (Tandalwe Hill) oxide copper zone
Formal resource estimate at Eagle Eye (Mweze) and new drill targets identified
Drilling to commence shortly at Dutwa, Igurubi and new Rupa projects in Tanzania
Uranium division established to drive forward significant project assets
Alliance with Troll Mining on uranium, copper and gold projects in southern Tanzania
Mokambo South licence granted in the Zambian Copperbelt

Statement by John Park, African Eagle's Chairman:

Dear Shareholder,

This has been an active and successful period for your Company, culminating in our share listing on the Johannesburg AltX exchange at the end of August.

The Company's strategy of focusing on making discoveries, maintaining a diverse exploration portfolio and signing up partners to ensure timely development of our advanced projects, has proved to be extremely successful.

African Eagle and its partners have made excellent progress on many of our projects and I believe that we are well on track to our goal of holding significant interests in several revenue-generating mines within three to five years.

Our Review of Operations this year expands more on the individual projects than in previous years, giving me the luxury of using my statement to elaborate on and illustrate that strategy by addressing some of the points which shareholders have raised during the year.

As you will see from the Review of Operations, we have made, and continue to make, excellent progress at Mkushi and Ndola. Despite the heaviest rains in decades we've completed airborne and geochemical surveys and undertaken additional drilling programmes enabling further resource definition, as well as securing development partners of high quality for three of our four key projects. Elsewhere, we have carried out a major review of the entire data base for Eagle Eye to identify new drill targets, we've conducted extensive surface surveys on several of our Lake Victoria properties and we've continued to evaluate new projects and potential partners in line with our strategy. Only at Miyabi has a combination of the weather and bureaucratic delays hindered progress during 2006. Our joint venture with Randgold signed on 2 May 2007 will now benefit the project enormously as Randgold commences work under that agreement.

Turning to some of those points I'm regularly asked about.

Corporate

The Company's ground-breaking secondary listing of its shares on the Johannesburg AltX exchange with a R88 million placing to South African investors, together with a further £1.1 million raised in the UK, must rate as a remarkable corporate success.

We are proud to have notched up some important AltX firsts:

we are the first AIM-listed resource company without South African assets or previous South African connections to list on AltX;
we are the first AIM company to raise capital through a secondary AltX listing; and
this is the biggest capital-raising on AltX to date by an exploration and development company.

The South African market's understanding of mining and Africa together with its current appetite for exploration, coupled with the relative ease of meeting AltX's listing requirements, ranked high amongst African Eagle's reasons for choosing AltX over other markets.

African Eagle now has 22% of its shares on its South African register and we believe that altogether, about 30% of its shares are South African managed. The capital we raised means that African Eagle's exploration programme will be fully funded for at least the next 24 months, and together with JV partners' funding commitments, the Company will have enough capital to bring most of its key projects to the feasibility stage.

Additional good news for our UK based private investors is that Her Majesty's Revenue and Customs have confirmed to us that they now do not consider AltX to be a "recognised exchange" for UK tax purposes. This ruling means that the Company's dual listing does not disturb the beneficial tax status granted to AIM-listed shares in the UK.

Strategy

The period has seen the further development of the Company's strategy and business model, namely to continue to focus on exploration, making discoveries and maintaining a diverse exploration portfolio, while signing up partners with the engineering and mining skills and capital to ensure timely development of our advanced projects.

The signature in May of our deal bringing Randgold Resources into the Miyabi Gold Project is a major step along this path. Randgold has a record of exploration and development success, notably the Morila and Yalea gold mines in Mali, and Tongon in Côte d'Ivoire. Randgold began work at Miyabi almost as soon as the agreement was signed and it has now almost completed its phase-1 drilling programme.

The Company's establishment of a Uranium Division was another significant step during the period. There are 8 projects which have uranium potential, with targets including calcrete and playa type deposits in Neogene to recent sediments, sandstone hosted deposits of Karoo and Cretaceous ages and vein deposits in crystalline basement rocks. The portfolio includes 11 licences and 8 applications, with a total area of some 13,000 square kilometres.

There are listed uranium exploration companies with far fewer and less promising assets than these. In order to optimise value to shareholders, the Company has been investigating a number of alternative ways to develop these uranium licences, including exploring them in-house, joint venturing with a uranium specialist company, or developing them in a new listed subsidiary.

Our strategic alliance with a Tanzanian company Troll Mining, signed in May, gives African Eagle a majority interest in a portfolio of promising uranium, gold and copper prospects.

In Mozambique, we established a local company for our exploration operations. We also signed a farm-out agreement with Pan African Mining Corp for the exploration of the Fingoe area of northwest Mozambique.

Research Note

A Research Note on the Company was recently written by Loeb Aron & Company Ltd, and we have made this available for download from our web site.

The Note concludes that "African Eagle combines the potential of grassroots exploration plays with a number of less speculative resource definition and development projects being carried forward by partners. A 'by parts' market valuation, carried out on a reasonably conservative basis, suggests a present day market value of 24.7p per share. Our 12-month target, based on outcomes of reasonably high probability, is 30.7p per share. African Eagle is now well funded, active and likely to be increasingly news generative".

The Note supports the Company's contention that it is now in a very strong position, with several advanced projects progressing towards production decisions, resting on a firm foundation of earlier stage projects. The analysts vindicate African Eagle's strategy of signing up industry partners to bring projects into production as quickly as possible.

The Note may be viewed at www.africaneagle.co.uk/investors/LoebNoteSept07.pdf

Project Updates

Mkushi

Mkushi in Zambia is our nearest to production project and we hope to give the green light to development by the end of next year. The high resolution airborne geophysical survey carried out in Q1 showed geological and structural features in extraordinary detail and the soil geochemical survey revealed unexpected as well as predicted copper targets. Follow-up ground geophysical and additional geochemical surveys are underway to investigate these targets.

Drilling by our development partner CGA Mining revealed a new mineralised structure, now known as L-Zone, with intercepts up to 37m at 2.4% copper. CGA is on track to produce a pre-feasibilty study in the coming weeks and is likely to announce a significant resource update, having increased the total drilling from 10,000m to more than 25,000m since entering the joint venture in July 2006. The metallurgical, environmental and mine planning work for the pre-feasibility study is also well advanced.

Ndola

The systematic exploration of our 450km2 Ndola licence in Zambia is also progressing very well. Again, the high resolution airborne geophysical survey and the soil geochemical survey have given us important geological and structural insights, and with our partner Phelps Dodge (now part of Freeport-McMoRan) we have identified several promising copper targets. Drilling at Msindu, the first of these, intercepted significant copper mineralisation. Geophysical electromagnetic surveys are underway to help elucidate the complex structure in this area. Assay and drill results are currently being analysed and it is hoped these will be received shortly.

Miyabi

After Mkushi, Miyabi in Tanzania is our next most advanced project. As noted above, our development partners on the Miyabi Gold Project, Randgold Resources, mobilised a diamond drill rig very soon after signing the earn-in agreement in early May, and the phase one programme is now almost complete. This drilling was aimed principally at helping Randgold's geologists to understand the shear zones and geological structures at Miyabi. Randgold has until May 2008 to elect to fund and perform the pre-feasibility to earn a 50% interest in the project. The Company is expecting the current gold resource of just over half a million ounces to increase, as there are many anomalies still to be drilled.

Eagle Eye

At our Eagle Eye project in Zambia the soil geochemical grid has been extended to cover almost all of the prospective area of the iron-oxide copper gold system. As part of its Competent Person's Report for our AltX listing, SRK Consulting (UK) Limited carried out a formal resource estimate on the Mweze area. SRK's JORC indicated resource estimate, based on the 10 holes drilled which have intersected the Mweze mineralised zone to date, was 1.4Mt at 1.2% copper. More important than the estimate itself was the insights which the 3-dimensional modelling provided into the structural and geological controls on the mineralisation. These insights will be used to site new drill holes later this year. We have also identified new drill targets from our thorough review of past data, and a trenching programme is underway to fine-tune these.

Other exploration activities

Tanzania

Positive progress has been made with our holdings in the Lake Victoria Goldfield, where results from the Dutwa and Rupa projects have been especially encouraging. We have started exploration of the Troll licences in southwest Tanzania and early results are promising.

Zambia

We have conducted a drilling programme at Tandalwe Hill in the Kampumba project area, together with a complete soil geochemistry survey of the licence. The drill will now move to test targets in the Lunga licence.

Most recently, the Company was granted the Mokambo South licence, an area of the Zambian Copperbelt lying on the eastern limb of the Mufulira Syncline and containing a significant mineralised zone over which drilling was carried out in the 1950s and 1970s. The Company will explore this area and the adjacent Mokambo North licence in partnership with Copperbelt Minerals Limited.

Mozambique

We completed the regolith sampling programme at Namama (Majele) and we expect the multi-element assay results very soon.

We made application for 11 new exploration licences covering areas prospective for gold, silver, nickel, uranium and other commodities.

Conclusion

I believe that African Eagle has adopted the right strategy, combining the comfort of portfolio diversity with the ability to advance projects as fast as possible towards production. We have the right people looking for the right commodities in the right geological and political settings. With our partners' funding of advanced projects to feasibility we can use the cash in the bank to fund our next two years' exploration programmes.

John Park
Chairman
African Eagle Resources plc

28 September 2007

Qualified Person

Information in this report relating to exploration results is based on data reviewed by Mr Christopher Davies BSc, MSc, DIC, FSEG, FAusIMM, Operations Director for African Eagle, who is a Fellow of the Australasian Institute of Mining and Metallurgy, has more than 26 years relevant experience in mineral exploration and is a Qualified Person under AIM rules. Mr Davies consents to the inclusion of the information in the form and context in which it appears.

Technical terms

A glossary of technical terms used by African Eagle in this announcement and other published material may be found at www.africaneagle.co.uk/african-eagle-projects-glossary.html