UK's African Eagle Resources plc has announced the discovery of early nickelassay on the basis of results from drilling at its Dutwa gold and base metals project in Mwanza Region.

The company said yesterday in a statement that it is conductinga programme of vertical reverse circulation drilling at Dutwa to investigate a promising 2.5km-long nickel anomaly from last year's geochemical soil sampling programme.

Seven of the first ten drill holes yielded high nickel values from a considerable thickness of laterite within the top 50m.

"Thegrades we are seeing at Dutwa are easily comparable with those at many major nickel laterite deposits worldwide," company managing director Mark Parker affirmed in the statement.

"The results to date, coupled with the extent of the geochemical anomaly, suggest a substantial nickel endowment. This is a highly significant discovery, the first of its type in Tanzania, and appears very promising."

The results were verified bytwo laboratories. The statement said African Eagle is continuing drilling to delineate fully the nickel-rich material. All samples will also be analysed for cobalt and other elements commonly associated with nickel in laterite deposits.

The company is also re-evaluatingall data from its Zanzui project, 70km to the south of Dutwa, which returned elevated nickel soil geochemical values from a similar geological setting.

The Dutwa project in the eastern Lake VictoriaGoldfield is located 100km east Mwanza.