Business
East Africa Metals provides update on the Development of Magambazi and Gold Stream Transaction, Tanzania
VANCOUVER, British Columbia, Jan. 24, 2018 (GLOBE NEWSWIRE) -- East Africa Metals Inc. (TSX-V: EAM) (“East Africa” or the “Company”) wishes to announce that, fu
About this update from East Africa Metals, Inc.
[{"type":"text","content":" VANCOUVER, British Columbia, Jan. 24, 2018 (GLOBE NEWSWIRE) -- East Africa Metals Inc. (TSX-V: EAM) (“East Africa” or the “Company”) wishes to announce that, further to news releases dated October 2, 2017 and October 5, 2016, the Company has completed the updated terms (“Addendum”) for the Definitive Agreement with an arm’s length private exploration and development company, Tanzanian Goldfields Company Limited (“TzGF) a Hong Kong company (the “Developer”), to purchase and develop East Africa’s Handeni Properties, which includes the Magambazi Project, and all properties owned by East Africa (together the “Assets”) in Tanzania. The Addendum reflects the following: The Developer has assigned the rights to the obligations of the Definitive Agreement, the Gold Purchase Agreement and the Addendum to the Developer’s new entity Tanzanian Goldfields Company Limited; The Developer has paid US$688,972 to settle outstanding payables owed to East Africa and provide advance payments towards the final purchase of the Assets; The Developer will pay US$500,000 to East Africa on the delivery of documents for Tanzanian Government approval; The Developer will deposit US$750,000 in a trust account when the documents to the Tanzanian Government have been submitted and the amount will be released when Tanzanian Government approvals are received; Under an interim Management Agreement, TzGF and East Africa’s Tanzanian subsidiaries will enter into Shareholders and Directors agreement providing the rights and obligations to TzGF of the day to day operations until the transaction has been approved by the Government of Tanzania; Both the Company and the Developer have the right to offer to exchange the gold stream to a net smelter return royalty; Luck Winner Investment Limited will not be investing in the Tanzanian operations. The transaction will provide East Africa with the right to acquire a gold stream equal to 30% of gold produced during mining operations established at any of the Assets, for a per ounce payment equal to the lesser of: (i) production cost plus 15% based on the Developer’s historical and budgeted production costs, and (ii) the prevailing market price for gold. Furthermore, the Developer conveys to East Africa the right to receive a 1.6% Net Smelter Royalty, capped at US$1,800,000. Further, East Africa and the Developer will establish ...