East Africa Metals Acquires 100% of Adyabo Project in Ethiopia
TSX VENTURE: EAM
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 1, 2016) - East Africa Metals Inc. (TSX VENTURE:EAM) ("East Africa" or the "Company") is pleased to announce that the Company has received confirmation from the holder of a 20% participating interest on the Adyabo property that it wishes to convert its 20% interest to a 2% net smelter return ("NSR") royalty. The Company has the option to buy back 1.0% of the NSR for a cash payment of C$5,000,000. Upon execution of an NSR agreement, the Company will hold a 100% undivided interest in the Adyabo property, subject to the 2% NSR.
Andrew Lee Smith, the Company's President & C.E.O., stated, "This is a significant development for the Company as we continue to strengthen our asset base and build the Company in challenging times. The Adyabo Project has performed beyond our expectations and we are excited to continue developing the existing Resource."
Earlier in 2015, the Company announced the initial Resource for the Adyabo Project (news release of May 5, 2015):
- Inferred Mineral Resources of 9,315,000 tonnes containing 678,000 ounces gold at an average grade of 2.26 g/t gold, 82,100,000 lbs copper at an average grade of 0.40% copper, and 648,000 ounces silver at an average grade of 2.2 g/t silver.
- The Resource hosts 885,000 gold equivalent ounces1.
Adyabo Resource Highlights
- The Mineral Resource is defined to a depth of 500, 330, and 180 metres for Mato Bula, Da Tambuk, and Mato Bula North respectively, with potential for lateral and depth extension within this large altered system.
- Copper concentrate grades ranged from 23% to 27% Cu, 170 to 850 g/t Au, and 27 to 240g/t Ag. Total gold recoveries, inclusive of copper floatation and cyanidation tests, ranged from 77% to 97%*.
- Whole mineralization cyanidation of Da Tambuk and intensive leaching of a Da Tambuk pyrite scavenger concentrate both returned gold recoveries of 97% suggesting that the gold within this composite is not refractory and the flotation-only recovery of 57% could be improved by cyanidation of flotation products.
- Additional metallurgical optimization is possible through regrind work, collector dosage variation, and comminution testwork.
- Synergies available as Resources are spatially aligned on a corridor of infrastructure (including the national power grid transmission corridor and paved highway) with the Company's adjacent Terakimti deposit at the Harvest Project, with direct connection to a planned rail network link at Shire.
- Sensitivity analysis indicates that the mineralized zones contain the majority of gold mineralization in significantly higher grade core areas.
*Da Tambuk whole mineralization leach test and pyrite scavenger concentrate test both returned gold recoveries of 97%.
1 Base Case - Au $1,400/oz, Cu $3.20/lb, Ag $20/oz
Work has continued on the Project and subsequently the Company announced highlight intersections from the Mato Bula Silica Hill Resource infill drilling that include (news release dated January 11, 2016);
- 19.50 metres at 21.67 grams per tonne gold including 8.6 metres at 46.81 grams per tonne gold, from 103.35 metres drill depth (WMD050 - Section 19920N).
- 20.69 metres at 18.37 grams per tonne gold including 10.67 metres at 34.23 grams per tonne gold, from 87.5 metres drill depth (WMD053 - Section 19880N).
The Mato Bula trend is a greater than 8 kilometre long zone of alteration characterized by sericite, pyrite (10%), carbonate (generally dolomite), and silica mineralization, which has undergone strong shearing. This assemblage comprises many elements consistent with high sulphidation gold rich VMS - submarine porphyry-related systems. The trend hosts additional geochemical targets at surface, and continues to possess significant upside to further discoveries both along strike and at depth. Higher grade gold core shoots are recognized at Mato Bula Main, Mato Bula Silica Hill and at Da Tambuk. Potential resource extraction is supported by favourable topography over the mineralized shoots.
East Africa will continue to advance both its Harvest and Adyabo Projects in Northern Ethiopia. Infill drilling and trenching has been completed in January 2016 at the Da Tambuk and Mato Bula deposits at Adyabo, and final analyses are anticipated late first quarter. At East Africa's Harvest Project, metallurgical diamond drilling has been completed at the Terakimti Oxide deposit, and samples have been forwarded to an accredited lab for metallurgical evaluation.
The planning, execution, and monitoring of East Africa's drilling and quality control programs at the Adyabo Project has been conducted under the supervision of Jeff Heidema, P.Geo., East Africa's Vice President Exploration. Mr. Heidema is a "Qualified Person" as defined by NI 43-101, and has reviewed and approved the technical information contained in this news release. Diamond drilling was coordinated by East Africa's contract geologists who also managed the preparation, logging, and sampling of core and rock samples, in addition to carrying out bulk density measurements. During sampling, quality control standards and blanks were introduced at pre-determined intervals to monitor laboratory performance. A system of field, reject, and pulp sample duplicates was also incorporated, as were specific programs of re-assaying and umpire lab assaying to both monitor laboratory performance and also characterize potential mineralization; all consistent with industry best practice.
Drill core samples have undergone preliminary preparation at the Bureau Veritas Mineral Laboratories facility in Ankara, Turkey, and are crushed to 80% passing 10 mesh, and pulverized to 85% passing 200 mesh (PRP70-1KG package). Analyses are conducted at Bureau Veritas Mineral Laboratories in Vancouver, Canada, with diamond drill core analyses utilizing Aqua Regia digestion and ICP-ES for base metal and silver analyses (AQ370 package), and Infill sample program utilizing Aqua Regia digestion and ICP-MS/ICP-ES (AQ270 package) for base metal and silver analyses. Gold analyses are conducted via Fire Assay Fusion with AA finish, and gravimetric analyses are completed for over-limit samples (FA430, FA530-Au packages).
About East Africa
The Company's principal assets and interests include both the 70%-owned Harvest polymetallic VMS exploration Project, which covers approximately 116 square kilometres in the Tigray region of Ethiopia, 600 kilometres north‐northwest of the capital city of Addis Ababa, and the Adyabo Project, covering 264 square kilometres immediately west of the Harvest Project. The Company owns 80% of the Adyabo Project, upon execution of an 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 continues to test priority targets. Additionally, the Company owns the 93 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 binding letter 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.
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" 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: 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 Projects; 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 East Africa's listing application dated July 8, 2013 and Tigray Resources Inc.
Management Information Circular dated March 28, 2014. Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to the successful integration of Tigray Resources Inc.'s business with the Company; 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; and 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.
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