East Africa Metals Completes Adyabo Transaction, Receives Schedule for Adyabo Mine Development
East Africa Metals Completes Adyabo
Transaction, Receives Schedule for Adyabo
Mine Development
VANCOUVER
,
Jan. 24, 2020
/CNW/ -
East
Africa Metals Inc.
(TSX-V: EAM - "East Africa" or the
"Company") is pleased to announce that it has received a project update from Tibet Huayu Mining
Co. Limited ("THM") regarding plans and current activities for the development and construction of
the Mato Bula and Da Tambuk mines located on the Adyabo property. Following the signing of the
Share Purchase Agreement, which formally completed the Adyabo transaction and confirmed the
ownership of Tigray Resources Inc. ("TRI") as 70% THM and 30% EAM, EAM received an update
on THM's preparations for the construction of the mines at Adyabo. As per the Agreement, THM is
responsible for 100% of the mine construction costs.
Under the terms of the Agreement, now complete, THM has advised the Company site construction
activities will begin in
March 2020
.
Highlights of the agreement include:
EAM has received a cash payment of US$1.2M on closing of the transaction and retain a 30%
Net Profit Interest.
THM will finance 100% of the capital costs and operate the mine development program and
mining operations.
Estimated capital costs for construction of US$54 million for Mato Bula and US$34 million for Da
Tambuk (see East Africa News Release dated April 30, 2018).
EAM will retain the exploration rights to all prospective mineralization on its concession areas
outside of the current resource.
Current Engineering, Procurement Construction Management (EPCM) Activities
Detailed Engineering Design:
TRI signed a service contract with Engineering Design Company,
Yantai Orient Metallurgical Design and Research Institute Co. Ltd. for
Mato Bula Gold-Copper
and
Silver Mining project. The construction level design work has been completed as part of the revised
feasibility study and a Preliminary Report has been submitted to TRI. Currently, the report is under
review by THM's senior engineers.
Preparations for Mine Development
Access Road:
The access road survey has been completed by the design team and road
construction is scheduled to start in
March 2020
.
Budget:
The 2020 budget for site construction activities has been prepared and sent to THM's
senior management for approval.
Parallel development of Mato Bula and Da Tambuk
: TRI is expected to develop Da Tambuk Gold
Mining Project in parallel with Mato Bula. Da Tambuk and Mato Bula development program is based
on the development plans proposed in TRI's
November 2017
NI 43101 compliant Preliminary
Economic Assessment ("PEA") Study Reports (see News Release dated
April 30, 2018
).
Next Steps:
Finalization of the feasibility study for Mato Bula and Da Tambuk to be submitted for evaluation
and approval by the State Minister of Mines and Petroleum;
Resettlement of farmers living in the mining project area based on recommendations from
independently authored Relocation Action Plan and in accordance with government protocols;
Procurement of main equipment for the processing plant and
Selection and engagement of a qualified contractor.
About East Africa Metals
East Africa's
assets include four, fully permitted, development ready gold and base metal projects in
Africa
. Over the past seven years
East Africa
has been able to advance the Company's exploration
assets through the discovery phase, resource definition and permitting through to development
phase at a pace that is seldom seen in emerging resource sectors. The performance of the
exploration programs designed and implemented by
East Africa
are notable, not only due to short
time-frame it has taken to achieve the milestone, but also by the extremely low discovery costs.
Global Resources for East Africa Metals African Projects:
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
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: closing of the Tibet Huayu Transaction; obtaining all
required approvals for the Tibet Huayu Transaction; the ability of Tibet Huayu to develop and
operate the Ethiopia Projects and Properties within the required laws and agreements; the outcome
of the arbitration case with the developer for the Tanzanian projects; if the arbitration case is
successful that the Company can occupy the site and advance the Tanzanian projects; if the
arbitration is successful the Tanzanian Definitive Agreement payments are not refundable;
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; 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; availability of drilling equipment and access;
actual results of exploration activities; 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 listing application,
East Africa's
financial statements and
management's discussion and analysis for the three months ended
March 31, 2019
and for the
year ended
December 31, 2018
, and
East Africa's
listing application dated
July 8, 2013
. 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.
Forward-looking statements are based on assumptions management believes to be reasonable,
including but not limited to the price of precious and base metals; the demand for precious and
base metals; the ability to carry on exploration and development activities; the timely receipt of any
required approvals; the ability to obtain qualified personnel, equipment and services in a timely
and cost-efficient manner; the ability to operate in a safe, efficient and effective manner; and the
regulatory framework including and not limited to license approvals, social and environmental
matters, and such other assumptions and factors as set out herein. 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 03:05e 24-JAN-20