VANCOUVER, BC, July 23, 2021 /CNW/ - East Africa Metals
Inc. (TSXV: EAM) - "East Africa" or the "Company") is
pleased to announce that it has reached agreement with Zijin Mining
Group Company Ltd. ("Zijin") on a letter of intent to acquire a
majority ownership stake in the Harvest Project ("Harvest
Transaction") currently held by EAM's wholly owned subsidiary,
Tigray Ethiopia Holdings Inc. ("TEHI"). TEHI holds a 70% interest
in Harvest Mining PLC with Ezana Mining Development PLC (Ezana)
owning 30%. Harvest Mining PLC owns 100% of the Harvest Project,
which is located in the Tigray National Regional State of the
Federal Democratic Republic of Ethiopia ("Ethiopia").
Harvest Letter of Intent
The terms of the non-binding
LOI stipulate Zijin will enter into a Definitive Agreement whereby
Zijin will acquire 55% interest in the Harvest Project by making a
cash payment of US$900,000,
developing and operating the Terakimti Oxide Mine and funding 100%
of TEHI's obligations related to the development and operation of
the Harvest Project. Ezana is responsible for contributing 30% to
the development and operating costs.
On completion of the proposed transaction:
- Zijin will hold the rights (interest) to 55% post tax
profits/Government distributions of Harvest Mining PLC; and
- EAM will hold the rights (interest) to 15% post tax
profits/Government distributions of Harvest Mining PLC.
Closing conditions include:
- Receipt of required approvals, including and not limited to
Board, Regulatory and Government;
- Execution of the Definitive Agreement; and,
- EAM receiving the cash payment of US$900,000.
Once the Harvest acquisition is complete, EAM will provide Zijin
with a "Right of First Offer" for any current or future Ethiopian
assets EAM makes available for acquisition, subject to existing
rights granted by EAM. Negotiations respecting consideration for
the acquisition of future Harvest exploration assets will be based
on terms similar to those agreed to for the acquisition of the
current resources: i) cash payment; ii) funding of 100% of the
capital costs; and iii) allocated % of post-tax profits of the new
mineral resources. Zijin and EAM will use best efforts to finalize
all conditions precedent and finalize the Definitive Agreement.
About Zijin Mining Group Company, Ltd.
Formed in 1993, Zijin is based in Fujian, China and is
a leading global mining company specializing in gold, copper, zinc
and other mineral resource exploration and development. It manages
an extensive portfolio, primarily consisting of gold, copper, zinc,
and other metals through investments in China and overseas
across eleven countries. Listed on the Shanghai Stock Exchange and
the Hong Kong Stock Exchange, Zijin has a market capitalization of
approximately US$35 billion.
About East Africa Metals
The Company's principal assets include 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 + Aueqv Metal ounces)
|
Project
|
Category
|
Au
+Aueqvounces
|
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.