Terakimti Initial Mineral Resource Estimate

In January 2014, an initial National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) gold, copper, silver and zinc mineral resource estimate for the Terakimti volcanogenic massive sulfide (VMS) deposit was announced (please see Tigray’s press release from January 27, 2014, available at SEDAR, www.sedar.com). This mineral resource estimate incorporates 16,495 metres of drilling in 79 diamond drill holes. 

Tigray also received positive results from on-going metallurgical testing at Terakimti. A selected suite of representative supergene and primary sulfide mineralization has yielded encouraging initial results for potential base metal concentrates produced from conventional floatation work. Results from preliminary bottle roll testing on oxide composites have yielded recoveries that indicate oxides are amenable to conventional cyanide leaching. 

Highlights

• Indicated Mineral Resources of 2.131 million tonnes containing 89,477,000 lbs copper, 86,000 ounces gold, 1,130,000 ounces silver, and 66,871,000 lbs zinc.
• Inferred Mineral Resources of 3.920 million tonnes containing 76,385,000 lbs copper, 166,000 ounces gold, 2,264,000 ounces silver, and 137,459,000 lbs zinc.
• The Mineral Resource has potential to continue at depth.
• Near surface oxide gold mineralization shows potential for heap leach amenability.
• Supergene and primary mineralization produce copper concentrates (25% copper grade) through conventional floatation processes, with further optimization possible. Attractive zinc concentrates are also produced on selected mineralization.

Terakimti was initially defined at surface by an 800 metre surface NE-SW gossan expression. The deposit dips steeply to the southeast, plunges moderately northeast, and remains open to extension down plunge at depth. The deposit is located within 7 kilometres of both a paved highway, and a high-voltage power grid line.

Terakimti Mineral Resource Estimate
David Thomas, P. Geo., Effective Date: January 17, 2014

 Footnotes to mineral resource statement

• Fladgate undertook data verification, and reviewed Tigray’s quality assurance and quality control programs on the mineral resources data. Fladgate concluded that the collar, survey, assay, and lithology data were adequate to support mineral resources estimation.
• Domains were modelled in 3D to separate oxide, supergene and primary sulphide rock types from surrounding waste rock. The domains conformed to lithological contacts logged in diamond drill core. Sub-domaining was further warranted to separate different grade populations and zones with differing strike and dip orientation within domains. Raw drill hole assays were composited to 5 metre lengths broken at domain boundaries. High grade assays were capped prior to compositing. Capping thresholds were assessed within each domain independently. Block grades for copper, zinc, gold, and silver were estimated from the composites using a combination of ordinary kriging (“OK”) and inverse distance weighted to the third power (“ID3”) into 5 x 5 x 5 m blocks coded by domain. Dry bulk density of the oxide, supergene and primary sulphide was estimated by ID3 interpolation of SG measurements. Blocks were classified as indicated and inferred in accordance with CIM Definition Standards.
• NSR was estimated using undiluted grades, metal prices, recoveries, smelter treatment and refining costs. Metal prices used for copper, zinc, gold and silver were US$3.50/lb, US$0.90/lb, US$1,400/oz, and US$25/oz respectively.
• Metallurgical recoveries, supported by metallurgical test work were applied as follows:
• Oxide zone: a recovery of 78.4% was applied for gold and 64.5% for silver. Copper and zinc are not recovered during the oxide phase and therefore are not considered a part of the oxide mineral resources. 
• Supergene zone: recoveries to copper concentrate of 87%, 36%, and 78% were applied for copper, gold and silver. Zero recovery of zinc from the supergene zone has been assumed. The supergene zinc metal content has not been included in the mineral resource calculation.
• Primary zone: recoveries to copper concentrate of 89%, 45%, and 39%, were applied for copper, gold, and silver respectively. Recoveries to zinc concentrate of 85% and 10% were applied for zinc and silver.
• A Lerchs-Grossman pit shell was generated from the NSR and using open pit mining costs of US$1.75/t. The total ore based costs (process and G&A) are US$25.9/t for oxide, and US$23.9/t for the supergene and primary rock types. A constant pit slope of 45° was used in the pit optimization. Open Pit Mineral Resources were reported within the Lerchs-Grossman pit shell above an NSR cut off equivalent to the total ore based costs stated above. Underground Mineral Resources were reported within a grade shell generated at an NSR cut-off of US$63.9/t, assuming a US$40/t underground mining cost in addition to the ore based costs stated above. Isolated blocks were removed prior to tabulation.
• The contained metal figures shown are in situ. No assurance can be given that the estimated quantities will be produced. All figures have been rounded to reflect accuracy and to comply with securities regulatory requirements. Summations within the tables may not agree due to rounding. The sulphide summation for contained zinc does not agree due to exclusion from the mineral resource of the contained zinc metal within the supergene zone.

A low sensitivity and a three year average price comparison on open pit economics was also conducted, to assess project potential and risk due to commodity price fluctuation. From the scenarios outlined below, the project illustrates consistency in metal content as prices decrease, and show upside potential in pit expansion to depth, as prices increase.

• Low Case – Cu $3.20/lb, Au $1250/oz, Ag $20/oz, Zn $0.80/lb
• Base Case – Cu $3.50/lb, Au $1400/oz, Ag $25/oz, Zn $0.90/lb
• 3 year average – Cu $3.60/lb, Au $1548/oz, Ag $29.90/oz, Zn $0.90/lb

Terakimti Updated Oxide Mineral Resource Estimate

In October 2015, an updated National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) gold, copper, and silver oxide mineral resource estimate for the Terakimti volcanogenic massive sulfide (VMS) deposit was announced (please see EAM’s press release from October 27, 2015, available at SEDAR, www.sedar.com). This mineral resource estimate incorporates 25,970 metres of drilling in 82 diamond drill holes, 127 RC drill holes, and 41 trenches. Subsequent to the release of the oxide resource update, a review by the resource QP identified an error in the tabulation of mineral resources. The corrected resource information was disclosed via press release on January 11, 2016.

The Terakimti resource Oxide update did not include a revision of the sulphide component of the original Terakimti VMS mineralization, qualified in the Terakimti resource dated January 17, 2014, as the recent detailed infill drilling only targeted upgrading the oxide portion of the deposit. East Africa at present does not expect to update the sulphide component of the initial Terakimti resource, as it did not constitute the priority focus of the recent drill delineation program.

Highlights

• Oxide Indicated Resource ounces have increased for gold and silver by 346% and 729% respectively, as a result primarily of conversion of existing Inferred Resources, and the identification of additional zones of mineralization from detailed Oxide drilling;
• Oxide Indicated Resource grades for gold and silver have increased by 26% and 131% respectively;
• Tabulation of cutoff grades suggest that the Oxide Indicated Resource estimate is not sensitive to changes in cut-off grade.

Updated Terakimti Oxide Mineral Resource Estimate at a 0.5 g/t Gold Equivalent Cut-Off
David Thomas, P. Geo. (Effective Date: October 18, 2015)

Footnotes to mineral resource statement:

• Fladgate Exploration Consulting Corporation (“Fladgate”) undertook data verification, and reviewed East Africa’s quality assurance and quality control programs on the mineral resources data. Fladgate concluded that the collar, survey, assay, and lithology data were adequate to support mineral resources estimation. 
• Domains were modelled in 3D to separate oxide, transition, supergene and primary sulphide rock types from surrounding waste rock. The domains conformed to lithological contacts logged in diamond drill core. Sub-domaining was further warranted to separate different grade populations and zones with differing strike and dip orientation within domains. 
• Raw drill hole assays were composited to 3 m lengths broken at domain boundaries. 
• High grade assays were capped prior to compositing. Capping thresholds were assessed within each domain independently. 
• Block grades for copper, gold, and silver were estimated from the composites using ordinary kriging (OK) and into 2.5 x 5 x 2.5 m blocks coded by domain. The block model was re-blocked to a selective mining unit size of 2.5 x 5 x 5 m blocks for reporting of the mineral resource. 
• An average dry bulk density of the oxide zone was derived from SG measurements on drill core and trench samples. Fladgate weighted the SG measurements by the proportion of each rock type within the oxide mineralization. 
• Blocks were classified as measured, indicated and inferred in accordance with CIM Definition Standards. 
• Gold equivalent was estimated using undiluted grades, metal prices and heap leach process recoveries. The formula used is: 
• Gold equivalent = Gold + (((Silver Price/31.103477) x (Silver Recovery)) / (Gold Price / 31.103477) x (Gold Recovery) 
• Metal Prices used for gold and silver were $1,300/oz, and $17.50/oz respectively. 
• Metallurgical recoveries, supported by metallurgical test work were applied as follows: 
• Recoveries of 73.1% were applied for gold and 50.0% for silver respectively. Copper and zinc are not recovered during the oxide phase and therefore are not considered a part of the oxide mineral resources. 
• The contained metal figures shown are in situ. No assurance can be given that the estimated quantities will be produced. All figures have been rounded to reflect accuracy and to comply with securities regulatory requirements. Summations within the tables may not agree due to rounding.