East Africa Metals (EAM) signed with Luck Winner Investment (LW) a binding memorandum of understanding (MoU) to finance its mining projects in Ethiopia.
Under the terms of the agreement, the two firms will conduct talks to seal a partnership agreement to establish a joint venture in which EAM will hold a 30% stake while LW will hold the remaining 70%. LW will thus invest up to $250 million to develop its projects, which include Terakimti and Adyabo.
Moreover, EAM indicated that it will proceed to a private placement which will result in LW acquiring C$13.55 million of shares which it will use to advance its drilling programmes in Ethiopia. LW also committed to lend C$2 million to EAM repayable over six years with an interest rate of 2%.
Terakimti is an oxide gold project, incorporated in the Harvest project, in which EAM holds a 70% interest and which covers an area of 116 km2. It contains various ores. As for the Adyabo project, it is fully owned by the firm and contains gold reserves. It covers an area of 312 km2.