VANCOUVER, BC, Nov. 30, 2021 /CNW/ - East Africa Metals Inc. (TSXV: EAM) ("East Africa", "EAM" or the "Company") would like to provide an update on the ongoing exploration of its gold and gold/copper/zinc projects in the Federal Democratic Republic of Ethiopia ("Ethiopia").
EAM currently has three approved Mining Agreements with Ethiopia's Ministry of Mines and Petroleum (the "Ministry"); the Terakimti Oxide deposit Mining license has been issued (news release dated December 7, 2017) and Mining Agreements for the Mato Bula and Da Tambuk deposits have been approved and licences issued (news release dated May 29, 2019).
All the mining licenses are currently under project development agreements.
Mato Bula and Da Tambuk transaction are under a project development agreement with Tibet Huayu Mining Co., Ltd. that purchased a 70% interest in the Company's Mato Bula and Da Tambuk Mining Licenses by making a cash payment of US$1.2M and financing 100% of the US$88M capital costs and operating the mines. Under the agreement EAM will retain the exploration rights to all prospective mineralization on its concession areas outside of the current resource (news release dated August 23, 2019).
EAM's interest in the Harvest Project is the subject of a non-binding Letter of Intent with Zijin Mining Group Company Ltd. ("Zijin") to acquire a majority ownership interest in project by making a cash payment of US$900,000, developing and funding 100% of EAM's obligations related to the development and operation of the Harvest Project. Under the agreement EAM will retain the exploration rights to all prospective mineralization on its concession areas outside of the current resource
Exploration and Drilling
East Africa is prepared to initiate a fully funded $2,700,000 exploration program announced in early 2021 (see new release February 1, 2021), once commercial activity in the Tigray region normalizes and it recovers from the impacts of the COVID pandemic and the political unrest.
EAM has completed the planning and received government approval for the $2,700,000 exploration program (news release dated January 28, 2020) that will include diamond drilling, geophysical surveys, environmental, metallurgical studies and resource assessments. The initiation of the exploration program is expected to begin immediately after the Government declares the region ready for field operations.
EAM's management has confidence in the potential of the Company's exploration assets in the Tigray region and looks forward to continued participation in what has become an active and emerging exploration sector.
Listed below are the exploration targets that host potential to improve current resources and potentially increase the total resource base (news release dated May 7, 2018). Highest priority exploration targets that have potential to increase the resource base will be the focus of Phase 1 drilling.
Halima Hill I.P. – Represents a compelling target as a large, open (to depth and southward) I.P. chargeability anomaly extending laterally 500 metres south beyond the established Mato Bula mineralization. The currently defined copper/gold mineralization increases in silver and zinc content locally in the south region of the resource. Being an open I.P. target, the feature requires drill qualification and has potential, with mineralization identification, to represent a significant spatial increase to the known mineralized footprint. A key intersection in this area includes 24.50 metres grading 0.61 grams per tonne gold, 1.67% copper, 8.0 grams per tonne silver, and 0.96% zinc, from 204.30 metres (WMD027- news release dated January 15, 2015). Halima Hill is considered a high priority target.
Mato Bula Central – Results from the 2017 infill drilling program identified areas of potential high grade mineralization for step out drilling to depth in the central area of Mato Bula.
Mato Bula North- A separate copper enriched area of the existing resource remains open laterally and to depth and requires further delineation drilling.
Da Tambuk deposit – Infill and extension drilling required (deposit currently open to depth and south).
Terakimti sulphide extension to depth.
Exploration Extension Rights
EAM management has been advised by the Ministry certain exploration rights in Ethiopia granted to EAM subsidiaries in January 2020 have reportedly been granted to a third-party. This action by the Ministry has occurred despite these exploration rights being legally held by EAM and protected by declarations of Force Majeure.
EAM has been able to confirm through Ministry records that this reported action by the Ministry does not impact any of the existing Mining Licenses nor does it affect exploration rights to any priority exploration targets in which EAM has an interest.
The license EL00057, purportedly granted to a third-party, includes property interests that are the subject of a valid Exploration License Period Extension Agreements (the "Exploration Rights") granted by the Ministry to Ethiopian subsidiaries of East Africa Metals Inc. ("EAM") on January 28, 2020. On May 27, 2021, the Ministry wrongly purported to terminate the License in breach of EAM's legal rights. EAM strongly disputes the validity of the Ministry's purported termination of the Exploration Rights and subsequent grant to a third-party.
The Company has formally filed Legal Notice in compliance with the Company's rights under the Ethiopian Mining Laws and will continue to demand the Ministry cancel any exploration license(s) granted to third-parties in the areas previously granted to EAM subsidiaries and affected by force majeure events and reinstate them to EAM.
Andrew Lee Smith, CEO of East Africa commented, "East Africa Metals' management and Board of Directors are surprised and disappointed by the Ministry's actions taken against the interest of EAM shareholders and all stakeholders in the Company's Ethiopian exploration projects.
The Company intends to continue to prepare a legal position and take legal action against the Ethiopian Ministry of Mines and any companies or individuals who have benefited from this decision at a time the Company considers appropriate.
After twelve-years of investments totaling $30M and exploration success by EAM and $15M in funding provided to the Ethiopia Ministry of Mines and Petroleum by Global Affairs Canada to address issues of accountability, tenure security and transparency EAM's management and Board of Directors fail to see how this unwarranted and regressive action by the Ministry of Mines benefits stakeholders or encourages investment in Ethiopia's resource sector."
About East Africa Metals
The Company's principal assets include a 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 are expected to be initiated immediately once commercial activity in the Tigray region normalizes and it recovers from the impacts of the COVID pandemic and the political unrest.
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 the Tigray region is declared secure for commercial activity by the Ministry.
EAM has invested US$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.
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, CEO, P.Geo., ICD.D
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" or variations of such words or similar words or expressions. Forward-looking information is based on reasonable assumptions that have been made by East Africa 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 East Africa to be materially different from those expressed or implied by such forward-looking information, including but not limited to: timing of receipt of mining permit; timing of mining development; projected heap leach recoveries ; early exploration; the closing of the agreement with the exploration and development company to advance the Magambazi Project or identify any other corporate opportunities for the Company; mineral exploration and development; metal and mineral prices; availability of capital; accuracy of East Africa's projections and estimates, including the initial mineral resource for the Adyabo, Harvest and Magambazi Properties; interest and exchange rates; competition; stock price fluctuations; availability of drilling equipment and access; actual results of current 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 diminishing quantities of grades of reserves; 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 in East Africa's management's discussion and analysis for the three months and nine months ended September 30, 2018 and for the year ended December 31, 2017, and East Africa's listing application dated July 8, 2013 Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. 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 timely closing of the financing; the timely closing of the Handeni Property definitive agreement; the price of gold, silver, copper and zinc; the demand for gold, silver, copper and zinc; 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; the renewal or extension of exploration Licenses; the regulatory framework regarding environmental matters, and such other assumptions and factors as set out herein. Although East Africa 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 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.
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