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The Ministry of Mines and Petroleum has approved the mining agreements for TSXV-listed East Africa Metals East Africa’s 100% owned Mato Bula and Da Tambuk gold projects located in the Tigray National Regional State of Ethiopia.

The final step in the mining licence process is the formal ratification of the mining agreements by the ethiopian council of ministers.

Andrew Lee Smith, East Africa’s CEO states:

“The Ministry of Mines approval of the Mato Bula and Da Tambuk mining agreements advances two additional mining projects to the development stage. This is another important milestone achieved by East Africa in the emerging mining sector of Ethiopia.”

With this completion East Africa now has three advanced development gold projects in close proximity to each other and existing transportation and power infrastructure. The company will continue to engage in discussions with interested parties on project financing and advancing engineering of the Mato Bula and Da Tambuk projects.

PROJECT HIGHLIGHTS

Mato Bula gold copper project

  • Post-tax NPV of US$56.6M 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 3 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 34,750 ozs. gold, 1.67 million pounds copper and 4,780 oz 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 132 g/t gold, 25.5% copper and 28 g/t silver.
  • Minimum 8-year mine life based on proposed open pit depth of 190 metres.
  • Significant potential exists to extend mine life as drilling has identified mineralization along strike and to 370 metres down dip.

Da Tambuk gold project

  • 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 24,000 ozs. gold per year and 6,000 ozs. silver per year.
  • Pre-production capital cost of 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 4-year mine life based on mining plan depth to 200 metres below surface.
  • Excellent potential to extend mine life as drilling has intersected significant mineralization to 260 metres down dip.