VANCOUVER, BC--(Marketwired - October 05, 2016) - East Africa Metals Inc.(TSX VENTURE: EAM) ("East Africa" or the "Company") wishes to announce the Company's development partner, Tanzanian Goldfields Limited ("Tanzanian Goldfields" or the "Developer"), has advised East Africa development activity has been initiated at the Magambazi Project located in the Handeni region of the United Republic of Tanzania ("Tanzania").
According to Tanzanian Goldfields, the mobilization of equipment required to initiate test-mining and bulk-sampling operations as an initial phase of the development plan, is in progress. Gravity recovery equipment is currently onsite with additional equipment being mobilized to site from Dar es Salaam. Agitated leach tanks and Carbon in Leach ("CIL") recovery equipment are scheduled for construction and installation over the next several months. Additionally, Magambazi Camp upgrades have commenced, with the production site preparation now in place.
Tanzanian Goldfields' management has concluded discussions with community and government representatives for the handover of the Magambazi site and dismantling of artisanal operations to clear the way for the current test mining and bulk sampling program and future development of a commercial mining operation. The development of the Magambazi Project has the support of the local communities and the regional government with the handover now scheduled for October 12, 2016.
Tanzanian Goldfields indicates that test mining of the primary gold resource material, tailings and alluvial gold targets will commence October 15, 2016 with initial results expected to be available starting in November. Previously completed preliminary metallurgical test work on the primary gold mineralization at the Magambazi Project has demonstrated significant (72.6%) gold recoveries from gravity methods alone (see Canaco news release dated May 19, 2010). The initial phase of test-mining and bulk-sampling has been planned to confirm these results in the field and allow a definitive approach for the initial ramp up of production to be developed.
The East Africa /Tanzania Goldfields transaction
As previously disclosed, (see news releases dated March 7, 2016, December 10, 2015 and June 15, 2015), the Company has completed the execution of the Definitive Agreement with the Developer to acquire and develop East Africa's projects located in the Handeni region of Tanzania.
Under the terms of the letter agreement (see news release dated June 15th, 2015), the Developer will; pay East Africa US$2 million in cash for a 100% interest in the Handeni properties, camp, equipment and other assets; convey to East Africa a 1.6% Net Smelter Royalty, capped at US$1.8 million, and convey to East Africa the right to acquire a gold stream equal to 30% of the life of mine gold production for a per ounce cost 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.
About East Africa
The Company's principal assets and interests include both the 70%-owned Harvest polymetallic VMS exploration Project, which hosts the Terakimti Deposit and which covers approximately 86 square kilometres in the Tigray region of Ethiopia, 600 kilometres northnorthwest of the capital city of Addis Ababa, and the Adyabo Project, hosting the Mato Bula trend Adyabo Resource, covering 225 square kilometres immediately west of the Harvest Project. The Company owns 80% of the Adyabo Project, and upon execution of a Net Smelter Return ("NSR") agreement the Company will own 100% of the Adyabo Project, subject to a 2% NSR. East Africa now has mineral resources defined at both projects in Ethiopia and plans to continue to test priority targets. Additionally, the Company owns the 91 square kilometre Handeni Property located in north-eastern Tanzania. Handeni includes the Magambazi Project, a gold deposit discovered in 2009. East Africa has entered into a definitive agreement with an arm's length private exploration and development company to advance the project.
More information on the Company can be viewed at the Company's website: www.eastafricametals.com. Jeff Heidema, P.Geo., a Qualified Person under the definitions of National Instrument 43-101, has reviewed and approved the contents of this news release.
On behalf of the Board of Directors:
Andrew Lee Smith, P.Geo., CEO