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East Africa Metals Inc
Symbol EAM
Shares Issued 179,541,091
Close 2019-05-31 C$ 0.26
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East Africa shareholders approve all matters at AGM

2019-05-31 16:16 ET - News Release

Mr. Andrew Smith reports


East Africa Metals Inc. has released voting results from its annual meeting of shareholders held today in Vancouver, B.C.

A total of 75,774,458 common shares, representing approximately 42.20 per cent of the company's issued and outstanding common shares, were voted in connection with the meeting. East Africa shareholders voted overwhelmingly in favour of all items of business, including the election of each director nominee:

  • Dr. Jingbin Wang -- 99.99 per cent;
  • Andrew Lee Smith -- 99.96 per cent;
  • Dr. Antony Harwood -- 99.98 per cent;
  • Dr. Zhijun He -- 99.99 per cent;
  • Sean Waller -- 99.98 per cent;
  • David Parsons -- 99.98 per cent.

East Africa shareholders voted: 99.98 per cent in favour to appoint PricewaterhouseCooper LLP as auditor; 99.89 per cent in favour of the amended stock option plan; and 99.93 per cent in favour of the proposed Tibet Huayu financing and development of the Terakimti, Da Tambuk and Mato Bula projects in Ethiopia (see news release dated Feb. 8, 2019).

Tibet Huayu finance and development

The transaction defined in the binding letter of intent includes terms that in exchange for a 55-per-cent interest of Harvest and 70-per-cent interest in TRI, Tibet Huayu will:

  • Provide a cash payment of $1.7-million (U.S.) to East Africa Metals;
  • Finance, develop and operate the Terakimti, Da Tambuk and Mato Bula projects.

On completion of the proposed transaction:

  • Tibet Huayu will hold the rights (interest) to 55-per-cent posttax profits/government distributions of Harvest and hold the rights (interest) to 70 per cent of the posttax profits/government distributions of TRI.
  • East Africa Metals will hold the rights (interest) to 15-per-cent posttax profits/government distributions of Harvest and hold the rights (interest) to 30 per cent of the posttax profits/government distributions of TRI.
  • Closing conditions include:
    • Ethiopian Ministry of Mines providing a formal letter confirming that the Terakimti project mining licence will not be in default if construction is not completed within the time frame stipulated in the mining licence or if the construction time frame is extended;
    • Ethiopian Ministry of Mines providing a formal letter confirming that it will issue the Adyabo project mining licences upon approval from the Ethiopian Council of Ministers;
    • Receipt of all required approvals, including, but not limited to, board, regulatory and government approvals;
    • Execution of definitive share purchase agreements and joint venture agreements respecting the transaction;
    • Receipt by East Africa Metals from Tibet Huayu of the cash payment of $1.7-million (U.S.).

East Africa Metals will retain the mineral rights and all exploration obligations for the prospective targets not incorporated in the three mining licences. East Africa Metals shall give Tibet Huayu a right of first refusal of reasonable duration to acquire East Africa Metals' mineral resources. For consideration of the future Ethiopian mineral resources, negotiations will be based on: (i) cash payment; and (ii) allocated percentage of posttax profits of the new mineral resources. Tibet Huayu and East Africa Metals will use best efforts to finalize all conditions precedent and finalize the definitive agreement.

Management changes

East Africa has, over the past several months, been engaged in the transition from a pure exploration company to a development and exploration company. As part of this transition, the company has been significantly cutting costs and has reduced its G&A (general and administrative) costs by nearly 55 per cent.

Peter Granata, chief financial officer, and Jeff Heidema, vice-president of exploration, have tendered their resignations to pursue other opportunities. Both Mr. Granata and Mr. Heidema have been instrumental in the growth of East Africa Metals during their time as executives of the company. The board and management of East Africa Metals are grateful for their contributions and wish them well in their future endeavours.

Effective immediately, Andrew Lee Smith, BSc, PGeo, will be assuming the duties as the company's qualified person under the definitions of National Instrument 43-101. Mr. Smith will oversee the company's upcoming drill program (see news release dated March 1, 2019).

Jacqueline Tucker will replace Mr. Granata as the company's chief financial officer. Ms. Tucker is a chartered professional accountant and a fellow of the Institute of Chartered Accountants of British Columbia. Ms. Tucker has over 30 years of experience in providing professional services to a number of listed entities. Ms. Tucker has served as an officer and a director of a number of public companies that include mining, oil and gas, and life sciences.

Mr. Smith commented: "East Africa's management and board of directors are pleased with the progress the company has achieved over the past seven years in Ethiopia. They are also thankful for the hard work and dedication the administrative staff and technical team have displayed in meeting difficult challenges in pursuit of the best interests of the company and its shareholders."

We seek Safe Harbor.

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