East Africa Metals Inc. (TSX-V: EAM) is pleased to announce the Company, through its wholly owned subsidiaries, has executed a definitive Share Purchase Agreement and Joint Venture Contract with Silk Road Resources Investments Co. Limited, a wholly owned subsidiary of Tibet Huayu Mining Co. Limited for the development and operation of the Adyabo Project’s Mato Bula and Da Tambuk deposits located in the Tigray region of the Federal Republic of Ethiopia.
Tibet Huayu Share Purchase and Project Development Financing
In finalizing the terms of the transaction described in the binding letter of intent (see East Africa News Release dated February 8, 2019), East Africa has agreed to transfer to Tibet Huayu Mining, 70% of the Company’s equity interest in its Ethiopian subsidiary company, Tigray Resources Inc. (100% owner of East Africa’s Adyabo Project).
The terms of the signed Share Purchase Agreement and Joint Venture Contract confirm Tibet Huayu’s obligation to fund 100% of the capital expenditures required to develop the Mato Bula and Da Tambuk deposits, operate the mine development program and mining operations, and make a cash payment to EAM of US$1.2M on closing of the transaction. EAM will benefit from a 30% profits interest in the project.
ADYABO PROJECT PRELIMINARY ECONOMIC ASSESSMENT SUMMARY (April 30, 2018)
Mato Bula North
| Current Mine Plan
|Capital Cost||US$ (‘000s)||54,200||34,030|
|Sustaining Capital||US$ (‘000s)||5,600||8,030|
|Post Tax Cash Flow (LOM)||US$ (‘000s)||97,700||20,615|
|Post Tax NPV @ 8%||US$ (‘000s)||56,660||13,020|
|Post Tax IRR||%||28.4||%||28.6||%|
|C1 Op Cost||US$/oz Au||412||420|
|Post Tax Cash Flow||US$ (‘000s)||$||29,310||$||6,185|
(See East Africa News Release April 30,2018) Preliminary Economic assessments are preliminary in nature and include inferred resources considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Further, mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty the preliminary economic assessment will be realized
The transaction also contemplates East Africa will retain the mineral rights, and all exploration obligations for the prospective targets on its concessions but not incorporated in the Adyabo mining licenses (“EAM Mineral Resources”). East Africa shall grant Tibet Huayu a right of first refusal of reasonable duration to acquire future EAM’s Mineral Resources based on mutually agreeable terms similar to those defined by the current transaction.
Andrew Lee Smith, the Company’s CEO stated, “With the Share Purchase Agreement and Joint Venture Contract, East Africa and Tibet Huayu have agreed on terms and are now committed to closing the transaction prior to August 9, 2019, that will see the financing for the development of the Mato Bula and Da Tambuk projects finalized.”
The Harvest Project:
EAM and THM continue to develop a separate Share Purchase Agreement and Joint Venture Contract for the financing and development of the Harvest Project, located eleven kilometers east of the Adyabo Project in the Tigray Region. Negotiations are proceeding and are expected to be concluded soon.
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 of this past week, but also by the extremely low discovery costs.
The Company’s mineral resources:
|EAM Project Resources (Au + Aueqv Metal ounces)|
|Project||Category||Au + Aueqv ounces|
*See East Africa Metals Project Resource Table attached for additional detail
Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) reported record... READ MORE
Including true width intervals of 6.08 g/t Au over 25.7 m at Stoc... READ MORE
Imperial Metals Corporation (TSX:III) reports financial results ... READ MORE
McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reported its first qu... READ MORE
Cameco (TSX: CCO) (NYSE: CCJ) reported its consolidated financial... READ MORE