East Africa Metals Announces Initial Mato Bula Trend Mineral Resource Estimate at the Adyabo Project in Ethiopia

 

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 5, 2015) - East Africa Metals Inc. (TSX VENTURE:EAM) ("East Africa" or the "Company") is pleased to announce its initial National Instrument 43-101 Standards of Disclosure for Mineral Projects gold, copper, and silver independent mineral resource estimate for the Mato Bula and Da Tambuk deposits on the Company's Adyabo project (the "Adyabo Project") located in the Arabian Nubian Shield in northern Ethiopia. This mineral resource estimate comprises mineralization from the Mato Bula trend, a greater than 8 kilometre long zone of alteration identified on the project in 2013. The Resource includes mineralization from the Mato Bula, Mato Bula North, and Da Tambuk mineralized zones and hosts 885,000 gold equivalent ounces1.

Adyabo Resource

  • Inferred Mineral Resources of 9,315,000 tonnes containing 678,000 ounces gold at an average grade of 2.26 g/t gold, 82,100,000 lbs copper at an average grade of 0.40% copper, and 648,000 ounces silver at an average grade of 2.2 g/t silver.
  • The Resource hosts 885,000 gold equivalent ounces1.(see table below)

Adyabo Resource Highlights

• The Mineral Resource is defined to a depth of 500, 330, and 180 metres for Mato Bula, Da Tambuk, and Mato Bula North respectively, with potential for lateral and depth extension within this large altered system.

• Copper concentrate grades ranged from 23% to 27% Cu, 170 to 850 g/t Au, and 27 to 240g/t Ag. Total gold recoveries, inclusive of copper floatation and cyanidation tests, ranged from 77% to 97%*

• Whole mineralization cyanidation of Da Tambuk and intensive leaching of a Da Tambuk pyrite scavenger concentrate both returned gold recoveries of 97% suggesting that the gold within this composite is not refractory and the flotation-only recovery of 57% could be improved by cyanidation of flotation products.

• Additional metallurgical optimization is possible through regrind work, collector dosage variation, and comminution testwork.

• Synergies available as Resources are spatially aligned on a corridor of infrastructure (including the national power grid transmission corridor and paved highway) with the company's adjacent Terakimti deposit at the Harvest project, with direct connection to a planned rail network link at Shire.

• Sensitivity analysis indicates that the mineralized zones contain the majority of gold mineralization in significantly higher grade core areas (Figure 1).

*Da Tambuk whole mineralization leach test and pyrite scavenger concentrate test both returned gold recoveries of 97%.
1Base Case - Au $1,400/oz, Cu $3.20/lb, Ag $20/oz

The Resource incorporates data from 10,266 metres of drilling in 47 drill holes, and 1520 metres of trenching from 22 trenches. It further builds upon the metal asset base East Africa is defining and accumulating on the Adyabo and Harvest projects in Ethiopia, as a compliment to the Terakimti resource announced on January 27, 2014. At Terakimti, 20 by 20 metre grid drillout work is on-going to increase definition of the high-grade oxide resource.

The current Resources at Adyabo and Harvest straddle an infrastructure corridor, with projects being located within 11 and 7 kilometres respectively of a paved highway and a high-tension power corridor (Figure 2). Andrew Lee Smith, President and CEO of East Africa stated, "EAM's management and Board are pleased to see the continued excellent performance of the Harvest and Adyabo Projects. The work has resulted in substantial growth in the company's resource base in Ethiopia. The strategic location of these resources relative to the ongoing development of transportation and energy infrastructure, as part of the World Bank sponsored Grand Transformation Program, means these project are well positioned with respect to potential development of any future mining operations."

Adyabo Project Inferred Mineral Resource Estimate David Thomas, P. Geo. (Effective Date: April 27, 2015)

Pit Constrained Cut-Off Gold Copper Silver Gold Equivalent Gold Metal Copper Metal Silver Metal Gold Equivalent Metal
Resource Area ($/t) Tonnes Au g/t Cu % Ag g/t g/t Au Ozs Cu Mlbs Ag Ozs Au Ozs
Da Tambuk 23.9 910,000 6.02 0.09 1.2 6.14 175,000 1.9 36,000 179,000
Mato Bula 23.9 4,900,000 2.60 0.32 1.6 3.15 410,000 34.1 259,000 497,000
Mato Bula North 23.9 2,470,000 0.27 0.70 3.2 1.49 22,000 38.3 252,000 119,000
Sub-Total Pit Constrained 23.9 8,280,000 2.28 0.41 2.1 2.98 608,000 74.4 547,000 794,000
Underground Mineral Resource Area
Da Tambuk 63.9 310,000 2.25 0.03 0.2 2.28 22,000 0.2 2,000 23,000
Mato Bula 63.9 710,000 2.11 0.47 4.3 2.93 48,000 7.3 98,000 67,000
Mato Bula North 63.9 15,000 0.75 0.79 2.6 2.10 400 0.3 1,000 1,000
Sub-Total Underground 63.9 1,035,000 2.13 0.34 3.0 2.73 70,000 7.7 101,000 91,000
Total 9,315,000 2.26 0.40 2.2 2.95 678,000 82.1 648,000 885,000

Footnotes to mineral resource statement:

  • Fladgate reviewed East Africa's quality assurance and quality control programs on the mineral resources data. Fladgate concludes that the collar, survey, assay, and lithology data are adequate to support mineral resources estimation.
  • Domains were modelled in 3D to separate mineralised rock types from surrounding waste rock. The domains were modelled based on copper and gold grades.
  • Raw drill hole assays were composited to 2 m lengths broken at domain boundaries.
  • Capping of high grades was considered necessary and was completed for each domain on assays prior to compositing.
  • Block grades for gold and silver were estimated from the composites using an inverse distance weighted (power of three) interpolation method into 5 (along strike) x 2m (across strike) x 5 m (vertical) blocks coded by domain.
  • Dry bulk density varied by deposit area. The dry bulk densities are based on 259 specific gravity measurements at Da Tambuk, 1,665 specific gravity measurements at Mato Bula and 231 specific gravity measurements at Mato Bula North.
  • Blocks were classified as Inferred in accordance with CIM Definition Standards 2014. Inferred resources are classified on the basis of blocks falling within the mineralised domain wireframes (i.e. reasonable assumption of grade/geological continuity) with a maximum distance of 100 m to the closest composite at Da Tambuk and Mato Bula. At Mato Bula North a maximum distance of 80 m to the closest composite was used.
  • The mineral resource estimate is constrained within an optimised pit with a maximum slope angle of 50°. Metal prices of $1,400/oz, $3.20/lb and $20.0/oz were used for gold, copper and silver respectively. Metallurgical recoveries of 97% for gold, 72% for copper and 50% for silver were applied at Da Tambuk. Metallurgical recoveries of 81% for gold, 87.5% for copper and 50% for silver were applied at Mato Bula and Mato Bula North. Gold equivalent grades are calculated taking into account metallurgical recoveries using the following formula at Da Tambuk Aueq = Au + (Cu x 1.163) + (Ag x 0.00736). At Mato Bula and Mato Bula North the gold equivalent formula is Aueq = Au + (Cu x 1.693) + (Ag x 0.00882)
  • A near surface $/t cut-off was estimated based on a total process and G&A operating cost of $23.9/t of ore mined. An additional mining cost of $40/t was used to estimate a $/t cut-off of $63.9/t for reporting underground mineral resources. Isolated blocks below the pit constrained mineralization were removed from the underground mineral resource estimate.
  • The contained gold, copper and silver 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.
  • Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
  • The quantity and grade of reported inferred resources in this estimation are conceptual in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading the inferred resources to an indicated or measured mineral resource category.

A sensitivity analysis was completed on tonnage and contained metal, to assess project risk with respect to commodity price fluctuations. The analysis indicates that tonnage is much more sensitive to metal price fluctuations than the contained metal.

Pit Constrained and Underground Mineable Tonnage and Metal Sensitivity to Metal Price

% % % %
Metal Price Assumption Difference Tonnes Difference Au Metal Difference Cu Metal Difference Ag Metal
Low Case 2 7.4% 1.6% 3.7% 5.5%
Low Case 1 0.0% 0.0% 0.0% 0.0%
Base Case -8.2% -1.9% -4.7% -6.3%
Optimistic -16.3% -3.9% -9.5% -12.8%
Note: Low Case 2 - Au $1,200/oz, Cu $2.80/lb, Ag $16/oz
Low Case 1 - Au $1,300/oz, Cu $3.00/lb. Ag $18/oz
Base Case - Au $1,400/oz, Cu $3.20/lb, Ag $20/oz
Optimistic- Au $1,500/oz, Cu $3.40/lb, Ag $22/oz

Adyabo Project

The Mato Bula trend is a greater than 8 kilometre long zone of alteration characterized by sericite, pyrite (10%), carbonate (generally dolomite), and silica mineralization, which has undergone strong shearing. This assemblage comprises many elements consistent with high sulphidation gold rich VMS - submarine porphyry-related systems. The trend hosts additional geochemical targets at surface, and possesses significant upside to further discoveries both along strike and at depth. Higher grade gold core shoots are recognized at Mato Bula Main, Mato Bula Silica Hill(Figure 2), and at Da Tambuk. Potential resource extraction is supported by favourable topography over the mineralized shoots.

Metallurgy

Positive preliminary metallurgical results have been received from composites derived from key mineralized zones at Mato Bula, Silica Hill, and Da Tambuk. Conventional copper floatation was successful in producing encouraging saleable copper gold concentrates, with additional gold recovery realized from cyanidation of gold bearing flotation products.

The metallurgical work was conducted on three diamond drill hole composite samples derived from gold intervals at Mato Bula, Silica Hill, and Da Tambuk, and samples were tested at the Blue Coast Research metallurgical facility in Parksville, BC. Coarse reject diamond drill hole material was utilized from 6 drill holes at Da Tambuk (Da Tambuk composite), and 11 drill holes (7 for the Mato Bula Main composite and 4 for the Silica Hill composite) from Mato Bula. A total of 151 samples were utilized for the composites, with composite grades averaging 11.1g/t Au and 0.3% Cu(Silica Hill), 6.6g/t Au and 0.99% Cu(Mato Bula Main), and 9.5g/t Au and 0.2% Cu(Da Tambuk).

Metallurgy summary

Floatation performance
Composite Cu Recovery, % Cu Grade, % Au Recovery, % Py Scav Au
Rec, %
Cu Clnr 1 Tail
Au Rec, %
Cyanidation
Au Extraction, %
Total Au Recovery, %
Da Tambuk 72 24 57 4 16 Not Tested *97
Silica Hill 82 23 38 12 43 91 77
Mato Bula 93 27 83 8 3 52 85

The metallurgical work conducted to date is considered preliminary and more detailed testing will follow, to exploit opportunities that remain for more enhancements in overall metallurgical performance.

Path Forward

East Africa will continue to advance the Adyabo project through infill drilling and more advanced testwork. Additionally, the company will continue building momentum on both the Adyabo and Harvest (Terakimti) projects through on-going community relations work and socio economic studies, in accordance with application requirements for Mining Licences.

The NI 43-101 technical report for the Adyabo Project will be filed on www.sedar.com within 45 days.

Quality Control

The planning, execution, and monitoring of East Africa's drilling and quality control programs at the Harvest Project have been conducted under the supervision of Jeff Heidema, P.Geo., East Africa's Vice President Exploration. Mr. Heidema is a "Qualified Person" as defined by NI 43-101. Diamond drilling and trenching at Harvest was coordinated by East Africa contract geologists who also managed the preparation, logging, and sampling of core and rock samples, in addition to carrying out bulk density measurements. During sampling, quality control standards and blanks were introduced at pre-determined intervals to monitor laboratory performance. A system of field, reject, and pulp sample duplicates was also incorporated, as were specific programs of re-assaying and umpire lab assaying to both monitor laboratory performance and also characterize potential mineralization; all consistent with industry best practice.

Core and rock samples have undergone preliminary preparation at the Bureau Veritas Mineral Laboratories facility in Ankara, Turkey, and are crushed to 80% passing 10 mesh, and pulverized to 85% passing 200 mesh (PRP70-1KG package). Analyses are conducted at Bureau Veritas Mineral Laboratories in Vancouver, Canada, utilizing Aqua Regia digestion and ICP-ES for base metal and silver analyses (AQ370 package). Gold analyses are conducted via Fire Assay Fusion with AA finish, and gravimetric analyses are completed for over-limit samples, (FA430, FA530-Au packages).

Information recorded from diamond drill core logging and assaying was integrated using industry standard data management software (Maxwell Datashed). The resultant data was reviewed, including validation of a random selection of data against source information, and is considered acceptable for the estimate.

Mineral Resource Qualified Persons

David Thomas, P.Geo. of Fladgate Exploration Consulting Corporation has reviewed and approved the technical, non-metallurgical information contained in this news release. Mr. Thomas is independent of East Africa and is a "Qualified Person" as defined by NI 43-101. Jeff Heidema, P.Geo., East Africa's Vice President Exploration, has reviewed and approved the geological and metallurgical information contained in this news release.

Mr. Thomas has consented to the disclosure of such information and his name in this news release.

About East Africa Metals

The Company's principal assets and interests include both the 70%-owned Harvest polymetallic VMS exploration Project, which covers approximately 116 square kilometres in the Tigray region of Ethiopia, 600 kilometres north‐ northwest of the capital city of Addis Ababa, and the Adyabo Project, covering 264 square kilometres immediately west of the Harvest Project. The Company has entered into an agreement to acquire up to 80% of the Adyabo

Project. Additionally, the Company owns the 93 square kilometre Handeni Property located in north-eastern Tanzania. Handeni 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 East Africa 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 East Africa to be materially different from those expressed or implied by such forward-looking information, including but not limited to: early exploration; risks associated with the integration of Tigray Resources Inc.'s business with the Company's; the ability of East Africa to find a development partner for the Magambazi Project or identify any other corporate opportunities for the Company; mineral exploration and development; metal and mineral prices; availability of capital; accuracy of East Africa's projections and estimates, including the initial mineral resource for the Adyabo, Harvest and Magambazi Projects; 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; foreign taxation risks; 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 East Africa's listing application dated July 8, 2013 and Tigray Resources Inc. Management Information Circular dated March 28, 2014.
Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to the successful integration of Tigray Resources Inc.'s business with the Company; the price of gold, silver, copper and zinc; the demand for gold, silver, copper and zinc; 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 East Africa 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. The Company does not update or revise forward looking information even if new information becomes available unless legislation requires the Company do so. Accordingly, readers should not place undue reliance on forward-looking information contained herein, except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



East Africa Metals Inc.
Nick Watters
Business Development
+1 (604) 488-0822
nwatters@eastafricametals.com
www.eastafricametals.com