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Mining Licenses Acquired by East Africa Metals for Mato Bula and Da Tambuk Projects, Ethiopia

East Africa Metals Inc. reports the receipt of government approval of mining licenses for the Mato Bula Gold Copper and Da Tambuk Gold Deposits (the “Adyabo Project”) at the company’s 100% owned Adyabo Project situated in the Tigray National Regional State of the Federal Democratic Republic of Ethiopia.

Upon the acquisition of the Mato Bula and Da Tambuk mining licenses, East Africa’s assets currently comprise of four, 100% permitted gold and base metal mining projects in Africa with total indicated and inferred resources of 2.8 million gold and gold-equivalent ounces and exploration upside.

The mining license agreements for Mato Bula and Da Tambuk have been officially approved by the Ministry of Mines Petroleum and Natural Gas (the “MoMPNG”), the Prime Minister’s Office and the Council of Ministers. The East Africa Metals will currently concentrate on closing its previously announced Project Financing and progress with the development of the Ethiopian Projects.

The awarding of the Mato Bula and Da Tambuk mining licenses marks an important milestone for East Africa, the Government of Ethiopia and the MoMPNG. East Africa’s management will now focus on negotiations with development partners to advance all of the Company’s assets in Ethiopia and Tanzania and engage further exploration programs to continue the growth the Company’s mineral resources and shareholder value.

Andrew Lee Smith, CEO, East Africa Metals

Project Highlights – Preliminary Economic Assessments

Mato Bula Gold Copper Project

  • Post-tax NPV of US$56.6M for base case using US$1,325/oz gold, US$3.00/lb copper and US$17.00/oz silver, at an 8% discount rate
  • C1 cash operating cost of US$412/oz gold counting all on-site costs and AISC cost of US$620/oz gold calculated with the entire on-site and off-site costs, sustaining costs, TCRC charges, and net of by-product credits
  • Payback of pre-production capital in three years from start of production
  • Average yearly metal production of 34,750 oz gold, 1.67 million pounds copper, and 4,780 oz silver
  • Pre-production capital cost of US$54.2M million which includes contingency of 38% on direct costs and 26% on total of direct and indirect costs
  • Processing rate of 1,400 tons/day using conventional crush/grind comminution, gravity concentration, and flotation to create a copper-gold concentrate. Furthermore, a gold bearing pyrite concentrate will be formed and treated off-site by Carbon in Leach (“CIL”) technology.
  • Open pit mining using drill blast, shovels, and trucks, waste stripping ratio of 9/1
  • Concentrate grades average 132 g/ton gold, 25.5% copper, and 28 g/ton silver
  • Minimum eight-year mine life subject to proposed open pit depth of 190 m
  • Life-of-mine metal recoveries of 86.4% for gold, 87.4% for copper, and 50% for silver
  • Substantial potential exists to extend mine life as drilling has located mineralization along strike and to 370 m 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 gold and US$17.00/oz silver, at 8% discount rate
  • C1 cash operating cost of US$420/oz gold including all on-site costs and AISC cost of US$642/oz gold calculated with all on-site and off-site costs, sustaining costs, TCRC charges, and net of by-product credits
  • Payback of pre-production capital in 1.9 years from commencement of production
  • Average metal production of 24,000 oz gold per year and 6,000 oz silver per year
  • Pre-production capital cost of US$34.1 M comprising of contingency of 36% on direct costs and 26% total of direct and indirect costs
  • Processing rate of 550 tons daily using crush/grind comminution, gravity concentration, and CIL technology
  • Underground trackless mining utilizing ramp access, cut and fill, and open stope mining
  • Average life-of-mine metal recoveries of 93% for gold and 50% for silver
  • Exceptional potential to extend mine life as drilling has intersected substantial mineralization to 260 m down dip
  • Minimum four-year mine life subject to mining plan depth to 200 m below surface

Andrew Lee Smith, P.Geo and CEO of East Africa Metals, a Qualified Person under the stipulations of National Instrument 43-101, has appraised and approved the contents of this press release.

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