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East Africa Metals’ Harvest Project is 600 kilometres north of Ethiopia’s capital of Addis Ababa. It’s located in the highly prospective Asmara Mineral Belt in the southern part of the Arabian Nubian Shield (ANS). The Debarwa and Emba Derho volcanogenic massive sulphide (VMS) discoveries in Eritrea and SE of the Bisha deposit are 90 to 140 kilometres southwest. Bisha is now a producing gold-copper-zinc-silver mine with over 25 million tonnes at 1% copper and 0.7 grams per tonne gold of ore in reserves. Vein-related gold deposits are also typical of the ANS, including the giant >13 million ounce Sukari deposit in Egypt, the one million ounce gold discovery at Koka-Zara in central Eritrea and the 140,000 ounce per year gold producer at Lega Dembi in southern Ethiopia.
East Africa Metals acquired its interest in the Harvest Project through its acquisition of Tigray Resources in 2014. Tigray acquired a 70% interest in the project in 2011 through a joint venture with Ezana Mining Development, a private Ethiopian company. Harvest comprises three contiguous exploration concessions covering approximately 86 km2, including Terakimti, Igub, and Hamlo (as at January 10, 2017). EAM, through its Ethiopian subsidiary company Harvest Mining PLC, has received a mining licence for the Terakimti Gold Heap Leach Project.
The Harvest Project contains multiple trends of copper-gold-silver-zinc rich VMS systems and numerous artisanal bedrock gold workings on its three exploration licences. Until recently, the ground has not been subject to modern exploration. Exploration by Tigray in 2011-2013 has included drilling 84 diamond drill holes testing four prospects for a total of 17,765 metres, a heli-borne VTEM, magnetic and radiometric survey, ground gravity and electromagnetic (EM) surveys, over 90,000 surface soil, stream and rock chip samples, and regional to detailed geological mapping. State of the art technologies, including a Niton handheld XRF unit used for real-time base metal assay of drill core and surface geochemical samples, has allowed exploration to advance at a rapid rate.
The most advanced prospect on the Harvest Project is Terakimti, where over 70 diamond drill holes have been completed, with peak results of 73.80 metres of 3.80% copper, 1.30 grams per tonne gold and 14 grams per tonne silver, including 36.45 metres of 6.01% copper, 1.69 grams per tonne gold, 19 grams per tonne silver and 1.31% zinc in hole TD004. Significant base and precious metal mineralization has been intersected in the majority of drill holes completed. An initial 43-101 compliant mineral resource estimate was announced in January 2014 (details are provided below), and an updated oxide mineral resource estimate was announced on October 27, 2015. On August 11, 2016, EAM filed a mine permit application for the Terakimti oxide with the Ministry of Mines, Petroleum, and Natural Gas (MoMPNG), as well as applying for additional rights to related exploration targets on the Harvest ground. On December 6, 2017, the mine permit for the Terakimti Oxide Gold Project was granted.
Drilling at Mayshehagne, approximately 3.3 kilometres south of Terakimti, has intersected 20.70 metres of 4.97% copper, 1.10 grams per tonne gold, 31 grams per tonne silver and 8.20% zinc from 24.00 metres, including 12.80 metres of 7.72% copper, 1.70 grams per tonne gold, 50 grams per tonne silver and 12.70% zinc (hole HD002).
A single drill hole at VTEM09, approximately 5 kilometres ENE and along strike of Terakimti, has intersected 10.69 metres of 3.47% copper, 4.20 grams per tonne gold, 91 grams per tonne silver, and 3.69% zinc from 19.81 metres, including 3.06 metres of 5.75% copper, 8.00 grams per tonne gold, 107 grams per tonne silver, and 0.70% zinc (hole TVD001).
Details on these projects can be viewed here.
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.
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
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.
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.
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:
Key Technical Metrics
Key technical and base case pre-tax and post-tax metrics for Terakimti are presented below:
Key Technical Pre-tax and Post-tax Metrics
Key technical and base case pre-tax and post-tax metrics for Mato Bula and Da Tambuk are presented below:
Risk and Opportunities
As with all mining projects, a number of opportunities and risks exist that may affect the outcome of the project.
Metallurgical test work for the Terakimti Gold Heap Leach project was completed by SGS Minerals Services (“SGS”) in Johannesburg, South Africa. Additional metallurgical test work for Terakimti was performed by McClelland Laboratories Inc. (“McClelland”) in Reno Nevada.
Metallurgical work is considered preliminary in nature and is on-going. A total of 16 composite samples were designed for testing at the Blue Coast Research metallurgical facility in Parksville, BC. These composites were formed from ¼” diamond core from 28 separate drill holes, profiling representation from gold enriched oxide mineralization, copper enriched supergene mineralization, and copper-zinc primary mineralization. Oxide mineralization has been shown to be amenable to conventional leaching, with initial South and North Oxide zone composites illustrating 100 micron grind gold recoveries of 75-80%, and coarser size heap leach type material would be slightly lower at 71-75%. Additional test work, engineering, and trade-off studies would be required to establish the most attractive economic option.
Copper enriched supergene mineralization, derived from the combination of several composite samples, provided provisional Locked Cycle Test results with high copper recoveries of 90% and a concentrate grade of 25%. Locked Cycle Testing on a single composite sample of primary sulfide mineralization resulted in 89% copper recovery being achieved at a 25% concentrate grade, with 86% zinc recovery to a separate concentrate grading 60% zinc. Both concentrates contain gold and silver credits with the potential to prove attractive in a marketing context. One composite test conducted on transition mineralization did not respond favourably to initial conventional floatation, and will require additional review.
The metallurgical work conducted to date is considered very preliminary and more comprehensive work will follow more detailed drill testing and sampling.
The recently completed infill Reverse Circulation (“RC”) drill program at Terakimti has assisted greatly in improving definition of the Terakimti oxide zone as a basis for revising the Oxide Resource, and has additionally provided a strong detail of information to support the fine-tuning of planned metallurgical and engineering tests. The company has commenced a metallurgical diamond drill program at Terakimti.
The VTEM09 airborne EM anomaly is located on the Terakimti concession approximately 5.3 kilometres east-northeast of Terakimti, and comprises a strong bedrock EM conductor over 200 metres strike associated with several malachite-rich gossan outcrops. Four trenches (up to 1.5 metres deep and 103 metres long) were completed over 160 metres of strike length at 40m spacing in late 2012 yielded the following intercepts, from northeast to southwest:
In 2013, a single drill hole at VTEM09 intersected 10.21 metres of 3.16% copper, 3.97 grams per tonne gold, 87 grams per tonne silver, and 3.82% zinc from 20.29 metres, including 2.82 metres of 5.61% copper, 7.48 grams per tonne gold, 102 grams per tonne silver, and 0.72% zinc (hole TVD001).
Additional drilling in late 2016 yielded additional VMS mineralization, highlighted by hole TVD009 which contained 24.06m grading 1.88% Cu, 3.08g/t Au, 66.4g/t Ag, and 2.54% Zn, from 35.84m depth.
The high-grade copper and precious metal enriched VMS mineralization intersected at VTEM09 compares favourably with the metal tenor encountered at the Terakimti and Mayshehagne discoveries, and marks the third significant VMS discovery made at Harvest. This drill intersection discovery at VTEM09 continues to highlight the base and precious metal endowment of this region of the Arabian Nubian Shield.
Drilling at Mayshehagne, approximately three kilometres south of Terakimti, has defined a high grade VMS lense over 120 metres strike/plunge, remaining open down down plunge, hosted in a sequence of mafic volcanic rocks with abundant jasperiodal cherts. The discovery adds potential to the project as it proves the presence of a significant new VMS trend.
The Mayshehagne target was identified as a strong bedrock EM conductor from an airborne survey conducted in 2006. Mapping and surface geochemical sampling by EAM has defined a mineralized zone over a strike of 170 metres that includes several gossans, magnetic ironstone chert, chert breccia, barite and malachite, hosted in carbonate-altered mafic volcanic rocks.. Results from rock-chip sampling returned high-grade assay values ranging from 0.07% to 14% copper, 0.11 to 13.2 grams per tonne gold, up to 56 grams per tonne silver, 0.03% to 1.9% zinc and up to 1.7% lead.
The Mayshehagne prospect has been drilled on four sections over 160 metres of strike. Best results include:
Technical information included on this webpage was reviewed and approved by Andrew Lee Smith, P.Geo., the Company’s President and CEO, who is a Qualified Person as defined by NI 43-101.
Preliminary Economic Assessment (PEA) results have been reviewed and approved by the below noted Qualified Persons. The Qualified Persons have reviewed or verified the information for which they are individually responsible, including scientific, technical and economic information underlying the information or opinions contained herein.
Mark Horan, MSc. P.Eng. Senior Mine Engineer, “Independent Qualified Person”, under NI 43-101. Tetra Tech Resources Canada Inc.
Hassan Ghafari, P.Eng., Principal Metallurgist, “Independent Qualified Person”, under NI 43-101. Tetra Tech Resources Canada Inc.
David Thomas, P.Geo. Geologist, “Independent Qualified Person”, under NI 43-101. Fladgate Exploration Consulting Corporation
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