Canada's East Africa Metals awarded mining licenses in Ethiopia

As part of the governments efforts to boost the mining sector in the country.

Canada-based mineral exploration company East Africa Metals has received government approval of mining licenses for the Mato Bula Gold Copper and Da Tambuk Gold Deposits at its Adyabo project in Ethiopia.

The acquisition of the Mato Bula and Da Tambuk mining licenses brings East Africa’s assets that are based in Africa to four.

These assets are fully permitted gold and base metal mining projects in Africa with total indicated and inferred resources of 2.8 million gold and gold-equivalent ounces and exploration upside.

Ethiopia mining industry, which has lagged behind other sectors, is set for a turn-around with multiple contracts awarded to both European and Canadian companies. Ethiopia is keen on running successive mining sector with the government supported the mining companies mainly by giving them tax incentives.

On Tuesday, the company said the mining license agreements for Mato Bula and Da Tambuk have been formally approved by Ethiopia’s Ministry of Mines Petroleum and Natural Gas, the Prime Minister’s Office and the Council of Ministers.

“The awarding of the Mato Bula and Da Tambuk mining licenses marks an important milestone for East Africa, the Government of Ethiopia and the MoMPNG. East Africa’s management will now focus on negotiations with development partners to advance all of the company’s assets in Ethiopia and Tanzania and engage further exploration programs to continue the growth the Company’s mineral resources and shareholder value,” said Andrew Lee Smith, East Africa’s CEO.

Mato Bula Gold Copper Project has pre-production capital cost of US$54.2 million including contingency of 38 percent on direct costs and 26 percent on total of direct and indirect costs. The project has average annual metal production of 34,750 ounces (ozs) of gold, 1.67 million pounds copper and 4,780 ozs of silver. Mato Bula Gold Copper Project has a minimum eight-year mine life based on proposed open pit depth of 190 metres.

Da Tambuk Gold Project has an average metal production of 24,000 ozs of gold per year and 6,000 ozs of silver per year. It has a pre-production capital cost of US$34.1 million including contingency of 36 percent on direct costs and 26 percent total of direct and indirect costs. The project has a minimum four-year mine life based on mining plan depth to 200 metres below surface.