East Africa Metals, the TSX-V listed junior, will hold a 100% undivided interest in its Adyabo gold/copper/silver property in Ethiopia, following a change in holding structure of the project.
The holder of a 20% participating interest on the Adyabo property announced its intention to convert its 20% interest to a 2% net smelter return (NSR) royalty. East Africa Metals has the option to buy back 1.0% of the NSR for a cash payment of C$5 million.
Upon execution of an NSR agreement, the company will hold a 100% undivided interest in the Adyabo property, subject to the 2% NSR.
“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,” says Andrew Lee Smith, the company’s President and CEO.
Earlier in 2015, East Africa Metals announced the initial resource for the Adyabo project:
- Inferred Mineral Resources of 9 315 000 t containing 678 000 oz gold at an average grade of 2.26 g/t gold, 82 100 000 lb copper at an average grade of 0.40% copper, and 648 000 oz silver at an average grade of 2.2 g/t silver.
- The Resource hosts 885 000 gold equivalent ounces.
Adyabo resource highlights
- The Mineral Resource is defined to a depth of 500, 330, and 180 m 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% copper, 170 to 850 g/t gold, and 27 to 240g/t silver. Total gold recoveries, inclusive of copper floatation and cyanidation tests, ranged from 77% to 97%.
- Whole mineralisation 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 optimisation 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 mineralised zones contain the majority of gold mineralisation in significantly higher grade core areas.
Forward looking programme
East Africa Metals 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 the 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.