East Africa Metals Concludes Agreement for Development Financing
August 14 2019 - 9:00AM
East Africa Metals Inc. (TSX-V: EAM - “East
Africa” or the “Company”) The Company is pleased to announce that,
effective August 9, 2019, Tibet Huayu Mining Co. Limited (“Tibet
Huayu” or “THM”) and East Africa have agreed and concluded certain
documentation for the previously announced Adyabo transaction (see
East Africa News Release dated July 2, 2019). With the signing of
an amendment to the Share Purchase Agreement executed in June 2019,
the parties have agreed all conditions precedent and obligations
required for closing under the Share Purchase Agreement have been
met or waived and the parties are now proceeding towards formally
closing the transaction. The Company has received conditional
acceptance of the transaction from the TSX Venture Exchange and
anticipates receiving final approval from the Exchange in due
course. Under the transaction, THM, through its wholly owned
subsidiary, Silk Road Resources Investments Co., Limited, will
conduct 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.
Highlights:
- The parties agree that all of the conditions to be satisfied or
waived have been satisfied or waived.
- The parties shall work jointly to advance and complete the
registration of the transfer of 70% of East Africa’s equity
interest in its Ethiopian subsidiary pursuant to the Ethiopian laws
and regulations, upon which THM will have purchased a 70% interest
in the Adyabo Project.
- Upon the payment of the closing consideration Tibet Huayu will
have the right to initiate the design, construction and related
works at the projects.
- 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.
Tibet Huayu Project Development
FinancingThe terms of the executed 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, US$600,000 will be wired to EAM prior to August
23, 2019 and US$600,000 will be placed in trust to be released to
EAM prior to September 23, 2019. EAM will benefit from a 30%
profits interest in the project.
|
ADYABO PROJECT PRELIMINARY ECONOMIC ASSESSMENT SUMMARY
(April 30, 2018) |
PARAMETER |
Units |
Mato BulaMato Bula North |
Da Tambuk |
Mineral Resources* |
|
|
|
|
|
|
|
Indicated |
Tonnes |
|
2,440,000 |
|
|
775,000 |
|
Inferred |
Tonnes |
|
5,825,000 |
|
|
110,000 |
|
Indicated |
Oz Au/Aueqv |
|
330,000 |
|
|
116,000 |
|
Inferred |
Oz Au/Aueqv |
|
420,000 |
|
|
15,000 |
|
Current Mine Plan
(LOM) |
Tonnes |
|
3,335,000 |
|
|
650,000 |
|
Oz Au/Aueqv |
|
300,000 |
|
|
96,000 |
|
Years |
|
6.8 |
|
|
3.3 |
|
Capital Cost |
US$ (‘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$/oz Au |
|
412 |
|
|
420 |
|
AISC |
US$/oz Au |
|
620 |
|
|
642 |
|
Payback |
Years |
|
3.0 |
|
|
1.9 |
|
Processing Rate |
t/day |
|
1,400 |
|
|
550 |
|
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*See East Africa Metals Project
Resource Table attached for additional detail |
|
The transaction states that 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 Project Financing approaching completion, the Mato Bula
and Da Tambuk projects proceeding with the development stage is a
historic milestone for the Company.”
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 |
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
For further information
contact: |
Nick Watters, Business Development |
Telephone |
+1 (604) 488-0822 |
Email |
investors@eastafricametals.com |
Website |
www.eastafricametals.com |
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.
See East Africa Metals Project Resource Table attached for
additional detail
- http://ml.globenewswire.com/Resource/Download/a025af24-1460-4ad0-848f-348497103f83
East Africa Metals (TSXV:EAM)
Historical Stock Chart
From Jul 2024 to Aug 2024
East Africa Metals (TSXV:EAM)
Historical Stock Chart
From Aug 2023 to Aug 2024