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Animate Dead is a 3rd level spell in the School of Earth Magic. It permanently reanimates killed undead, allied units similar to Resurrection spell. However, unlike Resurrection, the effect is always permanent regardless of whether the hero has Earth Magic or on what level it is.
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The number of HP restored by Animate Dead and Resurrection is almost equal. Both give 50 times spell power at all levels. The flat bonus for Basic/Advanced/Expert level is 30/60/160 for Animate Dead and 40/80/160 for Resurrection, giving Resurrection a slight edge before Expert level. Note that Resurrection costs more spell points to cast and its effect is only permanent with at least Advanced Earth Magic.
Animate dead has a 44% probability to show up in Necropolis' Mage Guild which is a lot higher than the chance for Resurrection (Stronghold and Fortress have 0% chance, Cove and Conflux 10% and all others 20%; Tower with a Library has 29%). Additionally, Animate Dead is level 3 while Resurrection is level 4. Thus, in the early game Necropolis has a much higher chance to be able to revive its creatures. With multiple cities, the chance to obtain the spell increases (assuming an average of 20% probability for Resurrection per town and only Necropolis cities for Animate Dead):
As can be seen, one would need about 3/5/8 cities to have the same chance to learn Resurrection as with 1/2/3 Necropolis cities to learn Animate Dead. Note that it is less likely for Necropolis to capture another Necropolis city than for another faction to capture a city other than Stronghold and Fortress. Thus, in the mid- and late-game, obtaining Resurrection will be likely for any player.
The spell can appear only in Necropolis mage guild or on the adventure map (scholars or magic shrines). Basically Animate Dead is a better version of Resurrection, because its casting cost is cheaper and as a level three spell it is easier to acquire. It "resurrects" undead creatures as efficiently as Resurrection resurrects alive creatures. Naturally, the downside is that Animate Dead is only usable to undead creatures.