Business
East Africa Metals Closes Tibet Huayu Development Financing
VANCOUVER, British Columbia, Aug. 23, 2019 (GLOBE NEWSWIRE) -- East Africa Metals Inc. (TSX-V: EAM - “East Africa” or the “Company”) is pleased to announce that
About this update from East Africa Metals, Inc.
[{"type":"text","content":" VANCOUVER, British Columbia, Aug. 23, 2019 (GLOBE NEWSWIRE) -- East Africa Metals Inc. (TSX-V: EAM - “East Africa” or the “Company”) is pleased to announce that the Company has closed the transaction under which Tibet Huayu Mining Co., Ltd. (“Tibet Huayu” or “THM”) has purchased a 70% interest in the Company’s Adyabo Project pursuant to the Share Purchase Agreement signed June 28, 2019, as amended August 9, 2019. The parties are working to complete the formal registration of the transfer of 70% of East Africa’s equity interest in its Ethiopian subsidiary pursuant to Ethiopian laws and regulations (the “Share Transfer Registration”). Of the US$1,200,000 payable by THM under the Share Purchase Agreement, the Company has received US$600,000, and the remaining US$600,000 will be placed in trust and released to the Company upon the earlier of 10 business days after the Share Transfer Registration and October 31, 2019. With the transaction closed, THM has the right to initiate the design, construction and related works at the Adyabo Project in accordance with the Joint Venture Contract entered into by the parties. THM will finance 100% of the capital costs and operate the mine development program and mining operations. Estimated capital costs for construction for Mato Bula is US$54 million and for Da Tambuk is US$34 million (see East Africa News Release dated April 30, 2018). EAM will retain the exploration rights to all prospective mineralization on its concession areas outside of the current resource. Under the amended Share Purchase Agreement, if THM does not pay the deferred consideration of US$600,000 to the escrow account by September 23, 2019, or if THM fails to release the US$600,000 to the Company as described above, THM shall pay a penalty of US$100,000 to the Company. The Company may terminate the Share Purchase Agreement if the payment of the deferred consideration is delayed by more than 20 business days, and upon such termination the Company will be entitled to keep all payments it has received to the date of termination. In addition, the Company may terminate the Share Purchase Agreement if THM has breached any of its obligations under the Share Purchase Agreement or the Joint Venture Contract, and upon such termination THM shall pay a penalty of US$2M to the Company. THM may termina...