TSX-listed East Africa Metals has announced has executed a definitive Share Purchase Agreement and Joint Venture Contract with Silk Road Resources Investments.
The agreement pertains to the development and operation of the Adyabo Project’s Mato Bula and Da Tambuk deposits located in the Tigray region of the Federal Republic of Ethiopia.
Tibet Huayu Share Purchase and Project Development Financing
In finalizing the terms of the transaction described in the binding letter of intent, the company has agreed to transfer to Tibet Huayu Mining, 70% of the company’s equity interest in its Ethiopian subsidiary company, Tigray Resources (100% owner of East Africa’s Adyabo Project).
The terms of the signed Share Purchase Agreement and Joint Venture Contract confirm Tibet Huayu’s obligation to fund 100% of the capital expenditures required to develop the Mato Bula and Da Tambuk deposits, operate the mine development program and mining operations, and make a cash payment to the company of US$1.2 million on closing of the transaction.
East Africa Metals will benefit from a 30% profits interest in the project.
The transaction also contemplates East Africa Metals will retain the mineral rights, and all exploration obligations for the prospective targets on its concessions but not incorporated in the Adyabo mining licenses.
East Africa shall grant Tibet Huayu a right of first refusal of reasonable duration to acquire future East Africa Metals’ Mineral Resources based on mutually agreeable terms similar to those defined by the current transaction.
Andrew Lee Smith, the company’s CEO states, “With the Share Purchase Agreement and Joint Venture Contract, East Africa Metals and Tibet Huayu have agreed on terms and are now committed to closing the transaction prior to August 9, 2019, that will see the financing for the development of the Mato Bula and Da Tambuk projects finalized.”