EAST AFRICA METALS' MAGAMBAZI PARTNER ENGAGES GARETH TAYLOR Tanzanian Goldfields Ltd., East Africa Metals Inc.'s partner in Tanzania and developer of the Magambazi project, has appointed Gareth Taylor as general manager for Tanzanian Goldfields.
Mr. Taylor has extensive experience in deep level, intermediate, shallow underground and open cast mining in a number of African countries including Mali, Namibia, South Africa and Tanzania. For 28 years he was employed by AngloGold Ashanti where he was head of mining and planning for the company's East and West Africa regions and also Managing Director of the Geita Gold Mine in Tanzania. In 2006 Mr. Taylor joined Barrick Gold, where he was Executive General Manager for Barrick Gold Tanzania and Vice President for Barrick Gold Africa, responsible for all Barrick's operational interests in Africa. In 2010 he joined Shanta Gold Limited and held positions as COO and CEO whilst bringing the New Luika Gold Mine to production. Shanta was a company focused on small to medium sized orebodies with production in the 50,000-100,000 ounce per year range requiring relatively low capex with fast payback.
Andrew Lee Smith, Company President and CEO stated, "East Africa's Board and Management welcomes the appointment of Gareth Taylor to lead Tanzania Goldfield's technical and operating team in the development of the Magambazi Project. Mr. Taylor has a depth of experience in mine development and mining operations in Tanzania that makes him the ideal candidate to advance our mutual interest in the Magambazi project."
The Magambazi Project and Handeni Properties
Pursuant to an agreement between Tanzanian Goldfields and East Africa (see news release dated March 7, 2016), East Africa agreed to sell its Magambazi Project, Handeni properties and all properties in Tanzania (the "Tanzanian Assets") to Tanzanian Goldfields for US$1 million and the right to purchase 30% of gold produced during the mining operations at any of the Assets, for a per ounce payment equal to the lesser of: (i) production cost plus 15% based on the Developer's historical and budgeted production costs, and (ii) the prevailing market price for gold.
The Magambazi Project is located in the emerging Handeni gold district in eastern Tanzania, 180 kilometres northwest of Dar es Salaam and 140 kilometres southwest of the port city of Tanga. The Project consists of two mining licenses (which cover 9.9 square kilometres) and two prospecting licenses, for an aggregate total of approximately 91 square kilometres. An initial mineral resource estimate for Magambazi was announced on May 15, 2012. Using a cut-off grade of 0.5 grams per tonne gold, Magambazi is estimated to contain an indicated mineral resource of 15.2 million tonnes grading 1.48 grams per tonne gold and containing 721,300 ounces, as well as an inferred mineral resource estimate of 6.7 million tonnes grading 1.36 grams per tonne gold and containing 292,400 ounces.
Other key terms of the agreement between East Africa and Tanzania Goldfields also include the following commitments from Tanzanian Goldfields:
-pay East Africa approximately US$1 million in cash for the book value of the camp, equipment and other assets;
-convey to East Africa the right to receive a 1.6% Net Smelter Royalty on production, capped at US$1.8M;
-issue treasury shares of Tanzanian Goldfields that are expected to represent 9.9% of the Tanzanian Goldfields' outstanding shares. Tanzanian Goldfields intends to list on the London Stock Exchange's AIM and expects to issue such shares to East Africa before the listing; and
-offer East Africa a seat on the Board of Directors of Tanzanian Goldfields and a seat on the Management Committee of the Magambazi project.
East Africa is not required to contribute to capital or exploration expenditures with respect to the construction and development of any of the Assets. East Africa has received US$450,000 at the date of this news release towards the purchase price and camp payments, with the balance due March 2017.