VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 25, 2014) -
CORRECTION: The NCIB will commence for a one year period commencing January 29, 2014 and ending January 28, 2015, and not January 27, 2014 to January 27, 2015.
East Africa Metals Inc. (TSX VENTURE:EAM) ("EAM" or the "Company") announces it has received TSX Venture Exchange ("TSXV") acceptance to initiate a normal course issuer bid ("NCIB") through the facilities of the TSXV. Under the NCIB, during the one year period commencing January 29, 2014 and ending January 28, 2015, EAM can purchase for cancellation up to 4,000,000 common shares (the "Shares"), representing approximately 8% of EAM's public float of common shares, as of January 24, 2014. Mackie Research Capital Corp. will conduct the bid on behalf of the Company. Purchases will be made on the open market through the facilities of the TSXV at the prevailing market price.
EAM believes that from time to time, the market price of its common shares may not reflect their underlying value and that the purchase of its common shares may represent an appropriate and desirable use of corporate funds. EAM intends to fund the purchases out of available cash.
The Company was formed in April 2013 as a result of a spinout by Canaco Resources Inc. (now Orca Gold Inc.) with properties in Tanzania, including the Magambazi project. On May 15, 2012, Canaco disclosed an initial mineral resource estimate for the Magambazi area of its Handeni project in Tanzania (the "Magambazi Project"). Using a cut-off grade of 0.5 grams per tonne gold, a gold price of US$1,250 per ounce and data from 102,600 metres of diamond drilling in 397 holes, as at May 15, 2012, Magambazi is estimated to contain an indicated mineral resource of 15.2 million tonnes grading 1.48 grams per tonne gold and containing 721,300 ounces of gold, as well as an inferred mineral resource of 6.7 million tonnes grading 1.36 grams per tonne gold and containing 292,400 ounces of gold. As at January 24, 2014, the Company has cash, short-term investments and marketable securities of approximately $19 million and is well funded to take advantage of acquisition opportunities which are being brought to its attention in the current business environment.
Discussions with potential development partners
The Company continues to advance discussions with interested parties with the objective of identifying a development partner to joint venture or purchase the Magambazi Project. To date, a number of parties have been identified and due diligence has been completed, including site visits, and ongoing discussions continue regarding the terms of a potential development partnership.
Re-evaluating the Magambazi mineral resource and approaches to conceptual mining operations
The Company believes that there is an opportunity to improve the grade of the Magambazi mineral resource and continues to consider alternative approaches to conceptual mining operations that would reflect current commodity prices, enhance the potential project economics and create value for our shareholders through the development of what the Company feels is a valuable asset.
In the event that partnership discussions do not lead to a sale or joint venture of the Magambazi Project, the Company expects to initiate a review of the mineral resource estimate and conceptual mine plans in an effort to find opportunities to enhance the potential project economics. This review is expected to include a re-evaluation of the mineral resource based on selective mining of the high-grade core of the Magambazi Project. The process would refine the current block model utilizing existing data which the Company expects will more precisely delineate continuous, high-grade mineralized zones within the mineral resource area and produce a mineral resource estimate for selective mine planning, which the Company hopes will give it an edge to re-engage in partnership discussions to develop the Magambazi Project.
Expansion of the existing Mining License
Preparations for the development of the Magambazi Project continue with the development of an application to expand the current Mining License to accommodate a revised mining approach.
Vancouver-based engineering consultants have prepared supporting documentation for the application outlining a reconfigured footprint for a revised conceptual operation based on selective mining. This application is expected to be submitted to the Tanzanian Ministry of Energy and Minerals in support of expanding the existing Mining License in due course.
The Company continues to evaluate corporate opportunities in East Africa. The Company is focused on identifying assets that are expected to allow the development of tangible value over the short- to medium-term.
Criteria that are priorities in this process include: the presence of an existing mineral resource; the presence of significant advanced exploration targets capable of generating discoveries that will add to the existing mineral resource and the location of assets in jurisdictions in which the Company's experience in operating in East Africa can be effectively applied.
Technical information included in this news release was approved by Jeff Heidema, P.Geo., the Company's Vice President Exploration. Mr. Heidema is a Qualified Person as defined by National Instrument 43-101.
About East Africa Metals
The Company's principal asset is the Handeni Property located in north-eastern Tanzania and covers an area of approximately 97 square kilometres. The Handeni Property includes the Magambazi Project, a gold deposit discovered in 2009.
More information on the Company can be viewed at the Company's website: www.eastafricametals.com.
On behalf of the Board of Directors:
Andrew Lee Smith, P.Geo., CEO
Cautionary Statement Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "expect", "intend", "estimate", "forecast", "project", "budget", "schedule", "may", "will", "could", "might", "should" or variations of such words or similar words or expressions. Forward-looking information is based on reasonable assumptions that have been made by EAM as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of EAM to be materially different from those expressed or implied by such forward-looking information, including but not limited to: the ability of EAM to complete any purchases of common shares under the NCIB; the ability of EAM to find a development partner for the Magambazi Project or identify any other corporate opportunities for the Company; the ability of EAM to improve the grade of the mineral resource for the Magambazi Project; the ability of EAM to expend the existing mining license; mineral exploration and development; metal and mineral prices; availability of capital; accuracy of EAM's projections and estimates; interest and exchange rates; competition; stock price fluctuations; availability of drilling equipment and access; actual results of current exploration activities; government regulation; political or economic developments; environmental risks; insurance risks; capital expenditures; operating or technical difficulties in connection with development activities; personnel relations; the speculative nature of strategic metal exploration and development including the risks of diminishing quantities of grades of reserves; contests over title to properties; and changes in project parameters as plans continue to be refined, as well as those risk factors set out in EAM's listing application dated July 8, 2013.
Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to the price of gold; the demand for gold; the ability to carry on exploration and development activities; the timely receipt of any required approvals; the ability to obtain qualified personnel, equipment and services in a timely and cost-efficient manner; the ability to operate in a safe, efficient and effective manner; and the regulatory framework regarding environmental matters, and such other assumptions and factors as set out herein. Although EAM has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information contained herein, except in accordance with applicable securities laws.