East Africa Metals Prepares for Transfer of Magambazi Mining Licence
East Africa Metals Prepares for Transfer of
Magambazi Mining Licence
VANCOUVER, BC
,
Sept. 7, 2021
/CNW/ -
East Africa Metals Inc.
(TSX-V: EAM ) ("East Africa" or
the "Company") is pleased to announce that it has received, in full, the US
$2,000,000
payment from
PMM Mining Company Limited ("PMM" or the "Developer") in accordance with the terms of the sale
of Canaco Tanzania Limited ("CTL"),
East Africa's
wholly owned subsidiary and is preparing to
transfer the Magambazi mining licence into PMM's control.
The Magambazi Transaction:
The transaction includes:
1
.
During the lifetime of the mine respecting the Mining Assets, PMM will sell 30% of the Gold
produced to EAM at the price of production cost plus 15% of production cost pursuant to a
Gold Purchase Agreement. Gold production costs means actual mining and milling costs as well
as those associated with third party smelting, refining, transportation and royalties minus
byproduct credits.
2
.
PMM undertakes to produce at least 10,000 ounces in the first year of commissioning of
operations, 20,000 ounces in the second year, 30,000 ounces in the third year and at least
40,000 ounces per year thereafter.
3
.
In the event PMM does not meet the minimum production in a year, it will compensate EAM as
follows: in the first year minimum production is not met PMM will pay
US$200,000
;
US$400,000
in the second year;
US$600,000
in the third year; and,
US$700,000
per year for any other
years' where the minimum production is not achieved.
Andrew Lee Smith
, President & CEO of
East Africa
, commented; "Once the transfer of shares is
complete, PMM will become the 100% owner and operator of the Magambazi Mine. EAM will
transition its business plan in
Tanzania
to that of a gold dealer through its newly formed subsidiary,
EG Royalty Company PLC. EAM's management looks forward to continuing to support PMM and
the mining operations at Magambazi and growing the Company's cashflow across all of it's
operations in
East Africa
."
An update on the gold tailings production (See News Release dated
January 27, 2021
) is expected
in the coming days.
The Magambazi Mine:
The Magambazi mine is located in the emerging Handeni gold district in eastern Tanzania, 180
kilometres northwest of Dar es Salaam and 140 kilometres southwest of the port city of Tanga. The
Magambazi property consists of two mining licenses (which cover 9.9 square kilometres) and two
prospecting licenses, for an aggregate total of approximately 93 square kilometres. An initial
mineral resource estimate for Magambazi was announced on
May 15, 2012
. Using a cut-off grade
of 0.5 grams per tonne gold, Magambazi is estimated to contain an indicated mineral resource of
15.2 million tonnes grading 1.48 grams per tonne gold and containing 721,300 ounces, as well as an
inferred mineral resource estimate of 6.7 million tonnes grading 1.36 grams per tonne gold and
containing 292,400 ounces.The pit shells and cut-off grade of 0.50 grams per tonne gold used to
calculate the maiden resource at Magambazi applied a 2012 gold price forecast of
US$1,250
per
ounce.
About East Africa Metals
The Company's principal assets include a 30% Net Profits Interest in the Mato Bula and Da Tambuk
mines (collectively "Adyabo Property") and a 70% project interest in the Harvest polymetallic VMS
Exploration Project in the Tigray Region of
Ethiopia
. In addition, the Company has a 30% Net
Streaming Interest in the Magambazi Mine in the Tanga Region of Tanzania.
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 second
half of 2021.
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 second half of 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, Ethiopia
(
EAM 30% Net Profit Interest)
Indicated
446,000
Inferred
551,000
Harvest Project, Ethiopia
(EAM = 70% Project Interest)
Indicated
469,000
Inferred
426,000
Handeni Project, Tanzania
(EAM = 30% Streaming Royalty Interest)
Indicated
721,000
Inferred
292,000
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 with Zijin
reflecting the anticipated structure and timing outlined herein; 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; the ability of PMM to develop and operate the Tanzanian Magambazi 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 07-SEP-21