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East Africa Metals positive results from Preliminary Economic Assessments for its three gold projects in Federal Democratic Republic of Ethiopia.

Separate Preliminary Economic Assessment studies (PEAs) have been received for East Africa Metals’ 100% owned Mato Bula gold copper project (Mato Bula), 100% owned Da Tambuk gold project (Da Tambuk) and 70% owned Terakimti Gold Heap Leach project (Terakimti) in the Tigray Regional National State of Northern Ethiopia. 

Each of the projects demonstrates robust economics utilising industry standard mining and processing technology. 

“These PEA studies indicate very positive results that demonstrate the significant commercial development potential of East Africa’s Ethiopian projects and provides sound basis for ongoing development engineering, with the ultimate objective of establishing commercial production” comments East Africa Metals CEO Andrew Lee Smith.  

“Collectively, under the development scenario described in the PEAs, these three projects present the opportunity to develop mining operations and revenue over the next eighteen to 24 months and position EAM to continue the expansion of the scope of development and the current resource,” he adds. 

Mato Bula

  • Post-tax NPV of US$ 56.6 m for base case using US$1,325 /oz Au, US$3.00/lb copper and US$17.00/oz silver, at an 8% discount rate
  • Payback of pre-production capital in three years from start of production
  • C1 cash operating cost of US$412/oz Au including all on-site costs and AISC cost of US$620/oz Au calculated with  all on-site and off-site costs,TCRC charges, sustaining costs and net of by-product credits
  • Average annual metal production of approximately 34,750 ozs gold, 1.67 million pounds copper and 4,780 ozs silver.
  • Pre-production capital cost of US$54.2M million including contingency of 38% on direct costs and 26% on total of direct and indirect costs.
  • Open pit mining utilizing drill blast, trucks and shovels, waste stripping ratio of 9/1.
  • Processing rate of 1,400 t/day using conventional crush/grind comminution, gravity concentration and flotation to produce a copper-gold concentrate. In addition a gold bearing pyrite concentrate will be produced and treated off-site by Carbon in Leach (“CIL”) technology.
  • Life-of-mine metal recoveries of 86.4% for gold, 87.4% for copper, and 50% for silver.
  • Concentrate grades average approximately 132 g/t gold, 25.5% copper and 28 g/t silver.
  • Minimum eight year mine life, based on proposed open pit depth of 190 m.
  • Significant potential exists to extend mine life as drilling has identified mineralisation along strike and to 370 m down dip.

Da Tambuk

  • Post-tax NPV of US$13.0 M and IRR of 28.6% for base case using US$1,325 /oz Au and US$17.00 /oz silver, at 8% discount rate
  • Payback of pre-production capital in 1.9 years from start of production
  • C1 cash operating cost of US$420/oz Au including all on-site costs and AISC cost of US$642/oz Au calculated with  all on-site and off-site costs, TCRC charges, sustaining costs and net of by-product credits
  • Average metal production of approximately 24,000 ozs gold per year and 6,000 ozs silver per year
  • Pre-production capital cost of approximately US$34.1 m including contingency of 36% on direct costs and 26% total of direct and indirect costs
  • Underground trackless mining utilizing ramp access, cut and fill and open stope mining
  • Processing rate of 550 tonnes per day using crush/grind comminution, gravity concentration and CIL technology
  • Average life-of-mine metal recoveries of 93% for gold and 50% for silver
  • Minimum four year mine life based on mining plan depth to 200 m below surface.
  • Excellent potential to extend mine life as drilling has intersected significant mineralisation to 260 m down dip.

Terakimti

  • Post-tax NPV of US$13.2 M and IRR of 30.1% for base case using US$1,325 /oz Au and US$17/oz silver, at an 8% discount rate
  • Payback of pre-production capital in 2.4 years from start of production
  • C1 cash operating cost of US$465/oz Au including all on-site costs and AISC cost of US$649/oz Au  calculated with all on-site and off-site costs, sustaining costs and net of by-product credits
  • Average metal production of approximately 17,800 ozs gold per year and 57,250 ozs silver per year
  • Pre-production capital cost of approximately US$17.2 m including contingency of 25% on direct costs 19% on total of direct and indirect costs
  • Open pit mining utilizing drill blast, shovels and trucks with waste stripping ratio of 3.8/1
  • Processing rate of 715 tonnes per day using two stage crushing, heap leaching and Merrill Crowe technology
  • Average life-of-mine metal recoveries of 65% for gold and 30% for silver.
  • four year mine life.
  • In addition to heap leaching of the gold oxide zone, potential exists to develop supergene gold, copper, and primary sulphide copper, gold, and zinc resources underlying the gold oxide zone