VANCOUVER, BC, Nov. 25, 2020
/CNW/ - East Africa Metals Inc. (TSX-V: EAM -
"East Africa" or the
"Company") is pleased to announce Company management is
advancing discussions with potential mining partners for the
development and operation of the Harvest Copper-Gold VMS Project in
Ethiopia.
The Company currently owns 70% of Harvest Mining PLC
("Harvest") through its wholly-owned subsidiary, Tigray
Ethiopia Holdings Inc. ("TEHI"). Harvest holds the Terakimti
Mining License (the "Harvest
Property" or "Harvest Project")
including the Terakimti Oxide deposit and the Terakimti Sulphide
resources in Ethiopia. The Company is in discussions with an
arm's length party (the "Purchaser") for the acquisition of
up to 55% interest in the Harvest Project.
Negotiations for the Harvest Project (including the Terakimti
Oxide and Terakimti Sulphide deposits) are active and ongoing and
are using previously disclosed terms as a framework for
discussions (see press release February 11,
2019) that, in exchange for 55% interest of Harvest, EAM
will receive:
- A cash payment of US$500K;
- A commitment from the Purchaser to finance, develop and operate
the Terakimti Oxide and Terakimti Sulphide projects.
On completion of the proposed transaction:
- EAM intends to dispose of the rights (interest) to 55% post-tax
profits/Government distributions of Harvest.
- EAM will hold the rights (interest) to 15% post tax
profits/Government distributions of Harvest.
- Closing conditions will include:
-
- Required approvals including and not limited to Board,
Regulatory, and Government approvals
- Execution of a definitive agreement; and
- EAM having received the cash payment of US$500K.
EAM will retain the mineral rights, and all exploration
obligations for the prospective targets not incorporated in the
Terakimti Mining License ("EAM Harvest Resources"). EAM
shall give the Purchaser a right of first refusal of reasonable
duration to acquire the EAM Harvest Resources subject to the terms
of the Harvest Joint Venture. Consideration for the acquisition of
future EAM Harvest Resources by the Purchaser will be based on:
i) cash payment and
ii) allocated % of post-tax profits of the new mineral
resources.
The key technical and base case pre-tax and post-tax metrics
for the Terakimti Oxide mine are presented below (see news
release April 30, 2018):
PARAMETERS
|
|
|
|
|
Units
|
Mine
Plan
|
|
Tonnes
|
|
1,086,000
|
|
Grade
|
Gold
|
g/t
|
|
3.1
|
|
|
Copper
|
%
|
N/A
|
|
|
Silver
|
g/t
|
|
22.9
|
|
Metal
Recoveries
|
Gold
|
%
|
|
65.0
|
%
|
|
Copper
|
%
|
N/A
|
|
|
Silver
|
%
|
|
30.0
|
%
|
Recovered
Metals
|
Gold
|
Ozs
|
|
71,000
|
|
|
Copper
|
Lbs
(x000)
|
N/A
|
|
|
Silver
|
Ozs
|
|
229,000
|
|
|
Au
Eq
|
Ozs
|
|
74,000
|
|
|
|
|
|
|
|
Capital
Cost
|
|
US$(x000)
|
$
|
17,180
|
|
Sustaining
Capital
|
|
US$(x000)
|
$
|
1,720
|
|
Operating
Cost
|
Site -
C1
|
US$/tonne
|
$
|
34.10
|
|
Gold
Price
|
US$/oz
|
|
$
|
1,325
|
|
Copper
Price
|
US$/lb
|
|
N/A
|
|
Silver
Price
|
US$/oz
|
|
$
|
17.00
|
|
Cash Flow
(Pre-Tax)
|
|
US$(x000)
|
$
|
29,360
|
|
NPV @8%
(Pre-Tax)
|
|
US$(x000)
|
$
|
19,470
|
|
IRR
(Pre-Tax)
|
|
%
|
|
37.4
|
%
|
Cash Flow
(After-Tax)
|
LOM
|
US$
(x000)
|
$
|
20,890
|
|
NPV @8%
(After-Tax)
|
|
US$
(x000)
|
$
|
13,180
|
|
IRR
(After-Tax)
|
|
%
|
|
30.1
|
%
|
Payback
|
|
Years
|
|
2.4
|
|
C1 Op
Cost
|
|
US$/oz
Au
|
$
|
465
|
|
AISC
|
|
US$/oz
Au
|
$
|
649
|
|
About East Africa Metals
The Company's principal
assets include both the 70% owned Harvest polymetallic VMS
exploration Project and the 100% owned Magambazi Mine in the Tanga
region of Tanzania. In addition,
the Company owns 30% Net Profits Interest in the Adyabo and Da
Tambuk mines in the Tigray region of Ethiopia. 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 fourth quarter of 2020.
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 first quarter of calendar 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 +
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
|
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 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
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.