East Africa Metals provided details of Q2 production from Magambazi mine, Tanzania
East Africa Metals provided details of Q2
production from Magambazi mine, Tanzania
VANCOUVER, BC
,
Sept. 13, 2021
/CNW/ -
East Africa Metals Inc.
(TSXV: EAM) ("East Africa" or
the "Company") is pleased to announce that it has received the first reconciliation calculation from
the "Magambazi Transaction" in accordance with the terms of the Company's agreement with PMM
Mining Company Limited ("PMM").
EAM's share from production of the tailings (see news release dated
April 9, 2021
) is 160 ounces
for projected net revenues of approximately
US$275,000
.
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's subsidiary 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, at least 20,000 ounces in the second year, at least 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 if minimum production is not met PMM will pay
US$200,000
; in the
second year if the minimum production is not met PMM will pay
US$400,000
; in the third year if
the minimum production is not met PMM will pay
US$600,000
; and in the fourth year and any
other years if minimum production is not met PMM will pay
US$700,000
.
Magambazi Q2 Gold Production Report and Revenue (CNW Group/East Africa Metals Inc.)
Andrew Lee Smith
, President & CEO of
East Africa
, commented; "The receipt by EAM of the Q2
production reconciliation from Magambazi marks a milestone for EAM and a new beginning for the
Company's business in
Tanzania
and
East Africa
. With Magambazi transitioning from tailings
production to hard rock mining operations and three mining projects in
Ethiopia
also permitted for
mining operations, EAM's management believes the potential to grow cashflows in the future can
create an opportunity for the Company to gain a competitive advantage and fund growth without
dilution to shareholders."
The Q2 production accounts for 9,721 tonnes from an estimated 32,000 tonnes of stockpiled
tailings.
As previously disclosed, the stockpiled tailings currently being processed at Magambazi have not
been sampled by EAM. However, samples of the tailings assayed in November 2007 indicated
unrecovered gold remained in the tailings left behind by artisanal miner's deposit (see press release
April 9, 2021
). The gold tailings at Magambazi amount to an estimated 32,000 tonnes at
undetermined grade and metallurgical recoveries. These tailings are historic in nature and have
never been established as a National Instrument 43-101 compliant resource.
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.
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
REFERENCES
Tetra Tech (
April 30, 2018
).
National Instrument 43-101 Technical Report and Preliminary
Economic Assessment for the Mato Bula Deposit, Adyabo Property, Tigray National Regional
State,
Ethiopia
Tetra Tech (
April 30, 2018
)
.
National Instrument 43-101 Technical Report and Preliminary
Economic Assessment for the Da Tambuk Project, Adyabo Property, Tigray National Regional
State,
Ethiopia
Tetra Tech (
April 30, 2018
).
National Instrument 43-101 Technical Report and Preliminary
Economic Assessment for the Terakimti Oxide Deposit, Harvest Project, Tigray National Regional
Site,
Ethiopia
Aurum Exploration Services (
February 14, 2014
).
NI43-101 Technical Report on a Mineral
Resource Estimate at the Terakimti Prospect, Harvest Property (centred at 38
º
21'E, 14
º
19'N),
Tigray National Region,
Ethiopia
Aurum Exploration Services (
February 14, 2014
).
Mineral Resource Estimate and Update to a
NI43-11 Technical Report for the Handeni Property centered at 37.97
º
E,5.744
º
S, Tanga Province,
Handeni District,
Tanzania
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: statements regarding present and future plans and
objectives of the Company, the ability of PMM to meet minimum annual production, the ability of
PMM to make the payment if the minimum annual production is not met, the ability of PMM to
carry out hard rock mining operations, the Company's expected cash flows from royalties, 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 13-SEP-21