The recent metallurgical test work results combined with previously disclosed technical information (see News Releases dated June 22, 2016 and October 27, 2015) and an internal Company engineering study in support of the development of a mineral resource estimate, the Company has now completed the technical, environmental and socio-economic documentation to qualify the Terakimti Oxide Gold Project for submission of a mine permit application to the Ethiopian Ministry of Mines, Petroleum, and Natural Gas.
The Terakimti oxide deposit is proposed as an open pit mining operation followed by heap leaching and on site processing to produce gold-silver dore. The combination of near surface oxide gold and silver mineralization, hosted in soft rock when compared to other deposits, high and rapid extraction of gold at coarse crush sizes in metallurgical testwork along with satisfactory percolation rates all support this strategy for the development of the Terakimti project.
The Terakimti project is located in the Tigray Region of Northern Ethiopia, approximately 600 kilometres north of the Addis Ababa, the capital of Ethiopia. The region has regular air service and very good, modern transportation and power infrastructure. The existing power and infrastructure located close to the project site enhances the development potential of the proposed operation. The proposed mining operation would utilize grid power for the project, for which the nearest high tension power line is approximately 7 kilometres away. Primary road access to the site is by paved highway from the town of Shire, 40 kilometres south of the project. Shire has a population of approximately 60,000 people and sufficient services to serve as a base for off-site project activities. Local surface and groundwater are expected to be sufficient for a heap leaching operation, and the project would maximize recycling of process water.
An independent Environmental Impact and Socio-Economic Assessment (“EISA”) study has been completed by Beles Engineering Pvt. Ltd. Co. of Ethiopia, and forms an integral part of the mine permit application. This study examined the beneficial and adverse aspects of the proposed mining operation and concluded that the local population is in favor of the project, and the anticipated benefits would be positive and very important to the local community and to the local and regional governments.
The study identified a small number of local farmers within the 2.8 square kilometre project concession that would require relocation so as not to be directly impacted by the mining activities. The Company will liaise with the affected families and the community to develop a satisfactory resettlement plan.
Based on the findings of the study, the Company believes it is possible to successfully manage the environmental and social impacts that would occur upon implementation of mining activities at Terakimti.
The first step in the permitting process, submission of the final draft documents to the Harvest Joint Venture Committee (the “Committee”) for the consideration of the minority partners, has been completed. Once approval of the Committee has been received, the mine permit application will be formally submitted to the Ministry of Mines, Petroleum, and Natural Gas for review. The Company anticipates the Ministry of Mines’ review will result in a recommendation to the Licensing Commission for final approval of the license.
Andrew Lee Smith, President and CEO, stated, “Advancing the Terakimti Gold Oxide Project to the permitting stage will mark a significant milestone for Company and highlights the excellent performance the Company has achieved with its Ethiopian assets. The resource at Terakimti shares a similarity with other copper-gold projects in the region, such as the Bisha and Debwara deposits, in that the initial mining opportunity was defined by the surface gold-oxide resource followed by mining of copper-gold-zinc sulphide resources. Management believes that over time, the potential exists for mining at Terakimti to begin with the gold silver oxide and then transition to high-grade supergene copper oxide and eventually the copper-gold sulphide resource. The Terakimti Oxide Gold Project will provide East Africa the opportunity to benefit from establishing the first heap leach operation in the country, and generate cash flow to re-invest in exploration and development to grow the Company’s resources in Ethiopia, which currently stand at 926,000 gold equivalent ounces in the indicated category plus 860,000 gold equivalent ounces in the inferred category.”
The resources stated above have been previously disclosed in News Releases — see resource tables below.
The Company’s principal assets and interests include both the 70%-owned Harvest polymetallic VMS exploration Project, which hosts the Terakimti Deposit and which covers approximately 86 square kilometres in the Tigray region of Ethiopia, 600 kilometres north‐northwest of the capital city of Addis Ababa, and the Adyabo Project, hosting the Mato Bula trend Adyabo Resource, covering 225 square kilometres immediately west of the Harvest Project. The Company owns 80% of the Adyabo Project, and upon execution of a net smelter return agreement the Company will own 100% of the Adyabo Project, subject to a 2% NSR. East Africa now has mineral resources defined at both projects in Ethiopia and plans to continue 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. East Africa has entered into a definitive agreement with an arm’s length private exploration and development company to advance the project.
Andrew Lee Smith, P.Geo., CEO