East Africa advances discussions to develop Harvest Project, Ethiopia
East Africa advances discussions to develop
Harvest Project, Ethiopia
VANCOUVER, BC,
Nov. 25, 2020
/CNW/ -
East Africa Metals Inc.
(TSX-V: EAM - "
East Africa
" or
the "
Company
") is pleased to announce Company management is advancing discussions with
potential mining partners for the development and operation of the Harvest Copper-Gold VMS
Project in
Ethiopia
.
The Company currently owns 70% of Harvest Mining PLC ("
Harvest
") through its wholly-owned
subsidiary, Tigray Ethiopia Holdings Inc. ("
TEHI
"). Harvest holds the Terakimti Mining License (the
"
Harvest Property
" or
"
Harvest Project
") including the Terakimti Oxide deposit and the Terakimti
Sulphide resources in Ethiopia. The Company is in discussions with an arm's length party (the
"
Purchaser
") for the acquisition of up to 55% interest in the Harvest Project.
Negotiations for the Harvest Project (including the Terakimti Oxide and Terakimti Sulphide deposits)
are active and ongoing and are using previously disclosed terms as a framework for discussions
(see press release
February 11, 2019
) that, in exchange for 55% interest of Harvest, EAM will
receive:
A cash payment of US$500K;
A commitment from the Purchaser to finance, develop and operate the Terakimti Oxide and
Terakimti Sulphide projects.
On completion of the proposed transaction:
EAM intends to dispose of the rights (interest) to 55% post-tax profits/Government distributions
of Harvest.
EAM will hold the rights (interest) to 15% post tax profits/Government distributions of Harvest.
Closing conditions will include:
Required approvals including and not limited to Board, Regulatory, and Government
approvals
Execution of a definitive agreement; and
EAM having received the cash payment of US$500K.
EAM will retain the mineral rights, and all exploration obligations for the prospective targets not
incorporated in the Terakimti Mining License ("
EAM Harvest Resources
"). EAM shall give the
Purchaser a right of first refusal of reasonable duration to acquire the EAM Harvest Resources
subject to the terms of the Harvest Joint Venture. Consideration for the acquisition of future EAM
Harvest Resources by the Purchaser will be based on:
i) cash payment and
ii) allocated % of post-tax profits of the new mineral resources.
The key technical and base case pre-tax and post-tax metrics for the Terakimti Oxide mine
are presented below (see news release April 30, 2018):
PARAMETERS
Units
Mine Plan
Tonnes
1,086,000
Grade
Gold
g/t
3.1
Copper
%
N/A
Silver
g/t
22.9
Metal Recoveries
Gold
%
65.0
%
Copper
%
N/A
Silver
%
30.0
%
Recovered Metals
Gold
Ozs
71,000
Copper
Lbs (x000)
N/A
Silver
Ozs
229,000
Au Eq
Ozs
74,000
Capital Cost
US$(x000)
$
17,180
Sustaining Capital
US$(x000)
$
1,720
Operating Cost
Site - C1
US$/tonne
$
34.10
Gold Price
US$/oz
$
1,325
Copper Price
US$/lb
N/A
Silver Price
US$/oz
$
17.00
Cash Flow (Pre-Tax)
US$(x000)
$
29,360
NPV @8% (Pre-Tax)
US$(x000)
$
19,470
IRR (Pre-Tax)
%
37.4
%
Cash Flow (After-Tax)
LOM
US$ (x000)
$
20,890
NPV @8% (After-Tax)
US$ (x000)
$
13,180
IRR (After-Tax)
%
30.1
%
Payback
Years
2.4
C1 Op Cost
US$/oz Au
$
465
AISC
US$/oz Au
$
649
About East Africa Metals
The Company's principal assets include both the 70% owned Harvest polymetallic VMS exploration
Project and the 100% owned Magambazi Mine in the Tanga region of
Tanzania
. In addition, the
Company owns 30% Net Profits Interest in the Adyabo and Da Tambuk mines in the Tigray region of
Ethiopia
. The Mato Bula and Da Tambuk mines are four-kilometres apart and will be developed
simultaneously. The development of the mining operations is scheduled to begin during the fourth
quarter of 2020.
East Africa
retains exploration rights on areas of the properties outside the Mato Bula, Da Tambuk
and Terakimti mining licenses in all Ethiopian projects and anticipates the commencement of
exploration drilling to test priority targets during the first quarter of calendar 2021.
EAM has invested
USD$66.8M
in African exploration since 2005 and identified a total of 2.8 million
ounces of gold and gold-equivalent resources representing an average discovery cost per ounce of
US$24
.
The current Global Project Resources discovered by EAM include:
Project Resources (Au + Au
eqv
Metal ounces)
Project
Category
Au + Au
eqv
ounces
Adyabo Project
Indicated
446,000
Inferred
551,000
Harvest Project
Indicated
469,000
Inferred
426,000
Handeni Project
Indicated
721,000
Inferred
292,000
*See East Africa Metals Project Resource Table attached for additional
detail
Andrew Lee Smith
, P.Geo., C.E.O., a Qualified Person under the definitions of National Instrument
43-101, has reviewed and approved the technical contents of this news release.
More information on the Company can be viewed at the Company's website:
www.eastafricametals.com
.
On behalf of the Board of Directors:
Andrew Lee Smith
, P.Geo., CEO
Cautionary Statement Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable
Canadian securities legislation. Generally, forward-looking information can be identified by the use
of forward-looking terminology such as "anticipate", "believe", "plan", "expect", "intend", "estimate",
"forecast", "project", "budget", "schedule", "may", "will", "could", "might", "should", "indicate",
"confident" or variations of such words or similar words or expressions. Forward-looking
information is based on reasonable assumptions that have been made by the Company as at the
date of such information and is subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance or achievements of the
Company to be materially different from those expressed or implied by such forward-looking
information, including but not limited to: the negotiation of a definitive agreement reflecting the
anticipated structure and timing outlined herein; delays with respect to required payments and
regulatory approvals; results of the due diligence review; the ability of Tibet Huayu to develop and
operate the Ethiopia Adyabo Project within the required laws and agreements recoverability of the
Ethiopian and Tanzanian VAT receivable; early exploration; the ability of
East Africa
to identify any
other corporate opportunities for the Company; the possibility that the Company may not be able to
generate sufficient cash to service its planned operations and may be force to take other options;
the risk the Company may not be able to continue as a going concern; the possibility the Company
will require additional financing to develop the Ethiopian Projects into a mining operation; the risks
associated with obtaining necessary licenses or permits including and not limited to Ethiopian
Government approval of EAM Mineral Resources extensions for the Company's Ethiopian
Properties and Projects; risks associated with mineral exploration and development; metal and
mineral prices; the demand for precious and base metals; availability of capital; accuracy of the
Company's Projections and estimates, including the initial and any updates to the mineral resource
for the Adyabo, Harvest and Handeni Projects; realization of mineral resource estimates; interest
and exchange rates; competition; stock price fluctuations; the ability to carry on exploration and
development activities; actual results of exploration activities; availability of drilling equipment and
access; the ability to obtain qualified personnel, equipment and services in a timely and cost-
efficient manner; the regulatory framework including and not limited to license approvals, social
and environmental matters; the ability to operate in a safe, efficient and effective manner
government regulation; political or economic developments; foreign taxation risks; environmental
risks; insurance risks; capital expenditures; operating or technical difficulties in connection with
development activities; personnel relations; the speculative nature of strategic metal exploration
and development including the risks of contests over title to properties; and changes in project
parameters as plans continue to be refined, as well as those risk factors set out in the Company's
filings with securities regulators. Mineral Resources, which are not Mineral Reserves, do not have
demonstrated economic viability. The estimate of mineral resources may be materially affected by
environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
The quantity and grade of reported inferred mineral resources as the estimation is uncertain in
nature and there has been insufficient exploration to define any inferred mineral resources as an
indicated or measured mineral resource and it is uncertain if further exploration will result in
upgrading inferred mineral resources to an indicated or measured mineral resource category. The
contained gold, copper and silver figures shown are in situ. No assurance can be given that the
estimated quantities will be produced. Although the Company has attempted to identify important
factors that could cause actual results to differ materially from those contained in forward-looking
information, there may be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such information will prove to be accurate, as actual
results and future events could differ materially from those anticipated in such information. The
Company does not update or revise forward looking information even if new information becomes
available unless legislation requires the Company to do so. Accordingly, readers should not place
undue reliance on forward-looking information contained herein, except in accordance with
applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
SOURCE
East Africa Metals Inc.
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For further information:
Nick Watters, Business Development, Telephone +1 (604) 488-0822,
Email [email protected], Website www.eastafricametals.com
CO: East Africa Metals Inc.
CNW 16:05e 25-NOV-20