VANCOUVER, June 2, 2020 /CNW/ - East Africa Metals Inc.
(TSX Venture: EAM) ("East Africa" or the "Company") announces
that SinoTech (Hong Kong)
Corporation Limited, an insider of the Company, has agreed to
provide an unsecured loan to the Company in the amount of
CAD$250,000 at an interest rate of
12% per annum. The loan is repayable upon the earlier of (a)
15 business days after the Company's closing of any financing or
transaction in connection with the development of the Company's
Harvest project (see press Release dated February 24, 2020); or (b) 6 months from the
Company's receipt of the loan proceeds. Any extension of the
loan is subject to SinoTech's agreement.
"The continued support of SinoTech as we develop our Ethiopian
assets is greatly appreciated," stated Andrew Lee Smith, company president and chief
executive officer. "East Africa
expects to continue to benefit from the contributions of our
Beijing-based partner as we
continue to advance the Company and the Harvest project."
The proceeds will be used for short term working capital.
The loan from an insider is considered a related party
transaction pursuant to Multilateral Instrument 61-101
Protection of Minority Shareholders in Special
Transactions. The loan is exempt from the formal
valuation requirement of such instrument and policy on the basis
that the Company is not listed on a market specified under such
instrument and policy, and the loan is exempt from the minority
shareholder approval requirement of such instrument and policy on
the basis that the loan is made on reasonable commercial terms
which is not convertible into voting or equity securities of the
Company.
The Company did not file a material change report 21 days prior
to the closing of the loan as the Company considered it in the best
interests of the Company to close the loan in order to use the
funds prior to that time period.
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 Sino
Union Transaction; obtaining all required approvals for the Sino
Union Transaction; the ability of Sino
Union and 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 year ended
December 31, 2019, 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.