Ethiopia Gets Investors For Adyabo Metal Project

East Africa Metals has executed a definitive share purchase agreement and joint venture contract with Silk Road Resources Investments Co Limited for development and operation of the Adyabo project’s Mato Bula and Da Tambuk deposits in the Federal Republic of Ethiopia.

Silk Road Investments is a wholly-owned subsidiary of Tibet Huayu Mining Co Limited (THM).

East Africa will receive a cash payment of US$1.2 million on the closing of the transaction which will entitle THM to a 70% interest in the Adyabo project, which is in the Tigray region.

THM will finance 100% of the capital costs and will carry out the mine development program and mining operations.

The estimated capital costs for construction are US$54 million for Mato Bula and US$34 million for Da Tambuk.

Mato Bula Trend – Adyabo Project

East Africa will retain a 30% net profit interest and will retain the exploration rights to all prospective mineralization on its concession areas outside of the current resource.

The company has agreed to transfer to THM, 70% of its equity interest in  Ethiopian subsidiary company Tigray Resources Inc, 100% owner of the Adyabo project.

East Africa’s CEO Andrew Lee Smith said: “With the share purchase agreement and joint venture contract, East Africa 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.”

The two parties continue to develop a separate share purchase agreement and joint venture contract for the financing and development of the Harvest project, 11km east of the Adyabo project and also in the Tigray region. Negotiations are proceeding and are expected to be concluded soon.

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

Ethiopia ministry grants mining agreements for two gold projects

Published by Mining Review Africa

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.

Image courtesy of Flagpedia

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.

Published by Mining Review Africa

East Africa Metals mine permit approved for Ethiopian gold projects

Published by Mining Review Africa

East Africa Metals has received Draft Model Agreements (DMAs) from the Ministry of Mines, Petroleum and Natural Gas for the company’s Mato Bula and Da Tambuk projects. The Mato Bula and Da Tambuk projects are located in the Tigray National Regional State of the Federal Democratic Republic of Ethiopia.

The delivery of the DMAs indicates the Ministry has approved the permit application and advanced the permitting process to the next stage.

Feature image credit: Wikimedia

The DMAs set out the rights and obligations of both parties with respect to the development and operation of the Mato Bula and Da Tambuk gold projects and, once executed, will result in the issuance of the Mining License for each project.

“This is another important milestone for East Africa Metals and our efforts to establish mining operations in Ethiopia,” comments Andrew Lee Smith, East Africa Metals CEO.

“The issuance of the DMAs for the Mato Bula and Da Tambuk projects by the Ministry represents an important permitting milestone and East Africa Metals looks forward to further discussions with the Ethiopian government to conclude the process.

“Once issued, East Africa Metals will have three permitted mining projects within a 15-kilometre area of influence,” he continues.

East Africa Metals is currently reviewing the DMAs and expects to respond to the Ministry after compiling an assessment of the documents.

In anticipation of the pending development programme, the company is currently engaged in project financing discussions with potential financiers and development partners.

Mato Bula 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 three 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 approximately 34,750 ozs gold, 1.67 million pounds copper and 4,780 ozs 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 utilising 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 approximately 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 mineralisation along strike and to 370 metres down dip.

Da Tambuk 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 approximately 24,000 oz gold per year and 6 000 oz silver per year
  • Pre-production capital cost of approximately 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.

Published by Mining Review Africa