Mining licence for East Africa Metals’ oxide gold in Ethiopia

East Africa Metals Inc has received government approval of East Africa’s Mining Licence Agreement for the Terakimti Oxide Gold Project at the company’s 70% owned Harvest Project located in the Tigray National Regional State of the Federal Democratic Republic of Ethiopia.

The Mining Licence Agreement has been formally approved by the Ministry of Mines, Petroleum, and Natural Gas, the Prime Minister and the Council of Ministers. The company will now focus on finalising its previously announced project financing and proceed with engineering and development of the Terakimti Project.

Andrew Lee Smith, East Africa’s CEO stated, “This is an extremely important achievement for East Africa, and we appreciate the efforts of the Government and Ministry of Mines in the development of the Mining Licence Agreement for Terakimti. We plan to move forward as soon as possible with engineering and development of the project”. The Terakimti Project will provide East Africa the opportunity to benefit from establishing the first commercial heap leach operation in the country, and provide the basis for additional exploration and development to grow the Company’s mineral resources in Ethiopia.

Terakimti Oxide Gold Project Profile:

Mineral Resource: Indicated Resource of 1,110,000 t grading 3.20 g gold and 23.6 g silver per tonne containing 114,000 ounces of gold and 841,000 oz of silver;

Heap Leach Recoveries from Column Testwork: up to 74.8% gold and 39.4% silver;

Proposed Mining Method: Conventional open pit;

Proposed Processing Technology: Heap leaching to produce gold–silver dore

The Terakimti Project is proposed as an open pit mining operation followed by heap leaching and on site processing to produce gold-silver dore. The combination of near surface oxide gold and silver mineralisation, hosted in soft rock when compared to other deposits, high and rapid extraction of gold at coarse crush sizes in metallurgical testwork, along with satisfactory percolation rates all support this strategy for the development of the Terakimti Project.

The Terakimti Project is located approximately 600 km north of the Addis Ababa, the capital of Ethiopia. The region has daily, commercial air service from Addis Ababa. The existing transportation and power infrastructure is located close to the project site and enhances the development potential of the proposed operation. The proposed mining operation would utilize grid power for the project, for which the nearest high tension power line is approximately 7 km away. Primary road access to the site is by paved highway from the town of Shire, 40 km south of the project. Shire has a population of approximately 60,000 people and sufficient services to serve as a base for off-site project activities.

An independent Environmental Impact and Socio-Economic Assessment (EISA) study has been completed by Beles Engineering Pvt Ltd of Ethiopia, and forms an integral part of the Mining Licence Agreement. This EISA examined the beneficial and adverse aspects of the proposed mining operation and concluded that the local population is in favor of the project, and the anticipated benefits would be positive and very important to the local community and to the local and regional governments. The EISA further concluded that the adverse impacts identified can be mitigated through implementation of the proposed management and monitoring plans, and therefore recommended project implementation.