East Africa Metals' Updates on Terakimti Oxide Resource in Ethiopia, Magambazi Sale Agreement in Tanzania

 

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 27, 2015) - East Africa Metals Inc. (TSX VENTURE:EAM) ("East Africa" or the "Company") is pleased to announce an updated National Instrument 43-101 Standards for Disclosure for Mineral Projects gold, copper, and silver independent mineral resource estimate for the oxide component of the Terakimti VMS deposit on the Company's Harvest project (the "Harvest Project") located in the Arabian Nubian Shield in northern Ethiopia. The near surface oxide portion of the Terakimti VMS deposit hosts an updated Oxide Indicated Resource of 1,110,000 tonnes grading 3.21 grams per tonne gold and 24.3 grams per tonne silver and an Inferred Resource of 15,000 tonnes grading 1.94 grams per tonne gold and 13.5 grams per tonne silver. Updated Oxide Indicated Resource contained metal includes 107,000 ounces gold and 812,000 ounces silver. 1

Highlights from the Oxide Resource update include:

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)
1


Classification

Tonnes
(t)
Gold
Equivalent
(g/t)
Gold
Grade
(g/t)
Silver
Grade
(g/t)
Copper
Grade
(%)
Gold
Metal
(Ozs)
Silver
Metal
(Ozs)
Indicated 1,110,000 3.44 3.21 24.3 0.08 107,000 812,000
Inferred 15,000 2.06 1.94 13.5 0.04 1,000 7,000

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.

Forward Program

East Africa will continue to advance both the Harvest and Adyabo projects. 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 tests1. The company has commenced a metallurgical diamond drill program at Terakimti, and in addition, infill and extension drilling of the Au-Cu Resources at Mato Bula and Da Tambuk (refer to East Africa's news release dated May 5, 2015) will be conducted in the fourth quarter of 2015.

1 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.

Additional details on the Mineral Resource update

East Africa requested that Fladgate update the oxide mineral resource estimate using the additional RC and trench information collected during 2014 and 2015.

Fladgate undertook quality assurance and quality control studies on the mineral resource data for the Harvest project. Fladgate concludes that the collar, down hole survey, assay and lithology data are adequate to support resource estimation.

There are a total of 82 core drill holes, 127 RC drill holes and 41 trenches for a total of approximately 25,970 meters of drilling within the Terakimti database used to support mineral resource estimation. The drilling database comprises 12 core drill holes (1,573 metres) from the 2009-2010 due diligence drill campaign, 70 core drill holes (15,007 metres) from the 2013 drill campaign and 127 RC drill holes completed during 2014 and 2015. In addition there are 41 trenches completed during 2014 and 2015.

The drill database was provided by East Africa as a MS Access® database. The database cut-off date for Mineral Resource estimate purposes was 22 September, 2015.

Fladgate imported the collar, survey, lithology, alteration, and assay data into MineSight®, a commercial mining software program. Topographic contour limits were based on a surface supplied by East Africa. The topography is based upon gravity geophysical survey stations and ortho-rectified stereographic images. The topography has an accuracy of ±60 cm. Fladgate checked that the drillhole collars matched the topographic surface. All data used the local grid coordinate system.

Fladgate assessed RC sample quality from logged estimates of sample recovery and measurements of sample weight and concludes there is good agreement between recovery estimates in all rock types except the vuggy gossan.

Fladgate plotted grades against sample recoveries. Two of the six identified gossans (hematitic gossan and limonitic gossan) showed evidence of a correlation between gold grade sample recovery. There is a trend of high grades with lower sample recoveries. Fladgate concludes that there is uncertainty whether higher gold grades are associated with more friable zones or whether more gold is preferentially recovered in intervals with lower recovery (i.e. the samples are biased). The comparison of the grade of RC samples with the grades of core drill hole samples suggests the former may be the case.

Fladgate has completed an assessment of the risk of down-the-hole contamination during RC drilling through asymmetric grade profile and cyclicity review, and concludes that there is no evidence of significant down-the-hole contamination in the RC drilling. Additionally Fladgate compared grades by data type for twinned holes (eight twin sets), and paired composites for the different hole types and trenches. It is concluded that the RC drillhole composites are not biased in respect to the core drillhole composites. There is a poor correlation between the composite pairs however the mean grades are similar. A comparison of trench composites with RC composites within a separation distance of 15 meters shows that the RC data are significantly higher in grade than the trench composites. There is equivocal evidence for a bias in the grades of the trenches with respect to the drill hole composites. If a bias exists then it is likely that the trench composites are lower in grade than the drill holes and therefore the grades in the mineral resource model may be somewhat conservative.

Fladgate conducted exploratory data analysis comprising basic statistical evaluation of assays and 3 metre composite lengths for gold, silver, and copper.

Fladgate evaluated length weighted, normal-scaled and log-scaled histograms and probability plots of the assays to define grade outliers for copper, gold and silver within the oxide and sulphide-transition domains. East Africa anticipate mining of the oxide and transition zone gold and silver mineralization over a 2-3 year period, Fladgate therefore re-blocked the model to a 2.5 metres (along easting) by 5 metres (along northing) by 5 metres (bench height) block size.

Assay summary statistics, capping grade thresholds and the amount of metal to remove within the oxide and sulphide-transition domains were all compiled as shown in the table below.

Capping was completed on the assays prior to compositing.

Oxide and Transition Domains Summary Statistics and Capping Thresholds.

Gold (g/t) Silver (g/t) Copper (%)
Oxide Transition Oxide Transition Oxide Transition
Number 887 113 887 113 887 113
Minimum 0.01 0.03 0.0 0.0 0.00 0.00
Maximum 53.81 28.67 180.0 318.3 0.58 1.80
Mean 2.07 3.06 5.2 66.6 0.08 0.11
Standard Deviation 4.68 5.11 9.5 79.7 0.08 0.27
CV 2.26 1.67 1.8 1.2 1.01 2.57
Capped Metal -1.2% -1.9% -4.0% -31.3% -3.1% -34.4%
Assay Mean 2.07 3.06 5.2 66.6 0.08 0.11

Fladgate created probabilistic indicator models for both gold and silver in respective domains where needed and found no evidence of significant global or local bias in the interpolated indicator probabilities.

As a result of the high gold composite CV values within the oxide and transition domains identified by Exploratory Data Analysis, Fladgate created a probabilistic indicator model within the oxide and transition domains using a nominal threshold of 1.3 g/t gold. Fladgate used the gold indicator probabilities in the blocks to control the smoothing of the model during the gold estimation process.

As a result of the multiple silver composite populations and high CV within the oxide domain identified by EDA, Fladgate created a probabilistic indicator model within the oxide domain using a nominal threshold of 12.5 g/t silver.

Fladgate found no evidence of significant global or local bias in the interpolated indicator probabilities.

Fladgate used 79 specific gravity (SG) determinations from drill core samples and 53 SG determinations from trench samples from gossan material within the mineralized zones. As a result of the small differences in the means of the drill hole and trench SG measurements, Fladgate grouped both datasets together. The determinations were performed by East Africa personnel using unsealed immersion techniques to measure the weight of each sample in air and in water. The combined SG measurements show that there are two groups of gossan types, one with a mean of approximately 2.2 g/cm3 and a second with a mean of approximately 2.44 g/cm3. Fladgate interpolated a nearest neighbour model of the lithology groups within the oxide mineralization wireframes and tabulated the proportion of each lithology group falling within the oxide wireframes. The proportions were used to estimate an average SG for the oxides weighted by the proportion of rock types within the oxide mineralization. Fladgate notes that the weighted average of 2.30 g/cm3 used to report the tonnage of the oxide mineralization is very similar to the average of the gossan SG measurements of 2.28 g/cm3 Fladgate validated the Terakimti block model to ensure appropriate honoring of the input data through a number of methods including; 1) nearest-neighbour (NN) grade models to validate the OK grade models, 2) swath plot validation of ordinary kriging and nearest neighbor models show good agreement for all variables, except in areas of limited drilling, 3) detailed visual inspection of block grades vs composited data (block grades reflect the input composite grades), and 4) a check on grade smoothing, with results indicating that the amount of smoothing is acceptable for a block size of 2.5m x 5m x 5m around the cutoff grades of interest.

Fladgate conducted an analysis of confidence limits using quarterly panels of production for a 1,100 t/day open pit mine operation. The accuracy of grade estimates was then scaled to annual production. Accuracy of ±15% or better at a 90% confidence limit on quarterly production was used as the criteria to select a drill hole spacing to be used to classify Measured mineral resources. The same accuracy and confidence limit on annual production was used to select a drill hole spacing to classify Indicated mineral resources. The results show that a drill hole spacing of 10 m (along the easting) x 20 m (along the northing) is sufficient to classify Measured and a spacing of 20 m (along the easting) x 40 m (along the northing) is sufficient to classify Indicated resources.

Fladgate also completed an analysis of the classification categories using conditional simulation of grades within the oxide domain. Fladgate selected a confidence limit of ±20% or better at an 80% confidence limit to select blocks as potential candidates for the Measured category. The results of the conditional simulation identified similar areas of the mineralized zones as those identified by the drill hole spacing study.

The two resource classification methodologies were merged together to produce the final set of blocks which could be classified to the Measured category. Fladgate manually modified the classification to remove isolated areas of Measured category blocks. Fladgate classified blocks with a minimum of two holes falling within 25 meters and the closest hole within 25 meters (i.e. with a 20 x 40 m spacing) to the Indicated category.

Fladgate classified blocks all other blocks falling within the mineralization wireframes into the Inferred mineral resource category. The mineralization solids represent the limit at which grade continuity can reasonably be assumed while permitting a reasonable local estimate of grades (as demonstrated by model validation).

Fladgate is of the opinion that the geological model, data quality and geological continuity are sufficiently well known to allow classification of Measured and Indicated mineral resources. However, the metallurgical characteristics of the mineralization are insufficiently well known to permit the classification of Measured mineral resources at this time.

Fladgate therefore only classified Indicated and Inferred mineral resources.

Tanzania:

Further to news release dated June 15, 2015, the Company has extended the deadline for the effective date on the agreement with an arm's length private exploration and development company to develop East Africa's Magambazi project in Tanzania, from October 15, 2015 to November 30, 2015.

Quality Control

The planning, execution, and monitoring of East Africa's drilling and quality control programs at the Harvest and Adyabo Projects has 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 and RC drilling was coordinated by East Africa's 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.

Drill core, RC 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, with diamond drill core analyses utilizing Aqua Regia digestion and ICP-ES for base metal and silver analyses (AQ370 package), and RC samples utilizing Aqua Regia digestion and ICP-MS/ICP-ES (AQ270 package) for base metal and silver analyses. 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 and RC 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 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

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. East Africa now has Resources defined at both projects in Ethiopia and continues to test priority targets. 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