AMN - ETHIOPIA: Adyabo development financing closed

East Africa Metals has closed the transaction under which Tibet Huayu Mining Co Ltd (THM) has purchased a 70% interest in the company's Adyabo Project in Ethiopia. This development financing is part of a Share Purchase Agreement signed on June 28, 2019, and amended on August 9, 2019.

The parties are working to complete the formal registration of the transfer of 70% of East Africa's equity interest in its Ethiopian subsidiary pursuant to Ethiopian laws and regulations.

Of the US$1.2 million payable by THM under the agreement, the company has received US$600,000 and the remaining US$600,000 will be placed in trust and released to the company upon the earlier of 10 business days after the share transfer registration and October 31, 2019.

With the transaction closed, THM has the right to initiate the design, construction and related works at the Adyabo project in accordance with the Joint Venture Contract entered into by the parties.

THM through its wholly-owned subsidiary Silk Road Resources Investments Co Ltd will finance 100% of the capital costs and operate the mine development program and mining operations at Adyabo, which includes the Mato Bula and Da Tambuk deposits in Ethiopia's Tigray region.

Estimated capital costs for construction for Mato Bula is US$54 million and for Da Tambuk is US$34 million.

East Africa will retain exploration rights to all prospective mineralisation on its concession areas outside of the current resource.

The company's CEO Andrew Lee Smith said: "Proceeding with the development stage of the Mato Bula and Da Tambuk projects is a historic milestone for the company."

East Africa's assets include four fully permitted, development-ready gold and base metal projects in Africa.

Over the past seven years, East Africa has been able to advance the exploration assets through the discovery phase, resource definition and permitting through to development phase at a pace that is seldom seen in emerging resource sectors.

"The performance of the exploration programs designed and implemented by East Africa is notable, not only due to short time-frame it has taken to achieve the development financing milestone but also by the extremely low discovery costs.

www.eastafricametals.com