East Africa enters MOU to develop Magambazi, Handeni

Executive Summary

• East Africa Metals Inc. entered a binding memorandum of understanding with Ubora Minerals (an affiliate of Anchises Capital) to acquire and develop the Magambazi/Handeni mining project in Tanzania.
• The transaction includes an immediate cash payment of US$1.0 million, a 4 % net smelter returns royalty with minimum guarantees, and a commitment to achieve at least 40,000 oz of gold production within 48 months of commercial operation.
• The deal is subject to regulatory approvals (Tanzanian Mining Commission, TSX Venture Exchange) and replaces a prior US$1.7 million obligation owed by PMM Mining Company Ltd.

Key Details

• Parties: East Africa Metals Inc.; Ubora Minerals Company Ltd. (subsidiary of Anchises Capital Precious Metal Fund LLC).
• Ownership Context: Ubora holds 50.2 million common shares (~18.66 % of outstanding equity), making it a non‑arm’s‑length party under TSX Venture Exchange rules.
• Cash Consideration: US$1.0 million payable upon signing a definitive agreement that supersedes the MOU, in lieu of the previously owed US$1.7 million to East Africa by PMM Mining Company Ltd.
• Royalty Structure: 4 % net smelter returns royalty on gold production, subject to an annual minimum royalty, advanced royalty payments, and a cumulative 10‑year guarantee payment schedule.
• Buyout Component: The transaction includes the buyout of PMM’s interest in the Magambazi/Handeni project.
• Development Timeline: Project development must be completed within 48 months after obtaining all necessary approvals and acquiring control of the project.
• Production Commitment: Minimum annual gold production of 40,000 oz to be achieved within 48 months of commercial production start‑up.
• Regulatory Conditions: Completion contingent upon approval by the Tanzanian Mining Commission, other relevant government authorities, execution of a definitive agreement, and TSX Venture Exchange clearance.
• Related Party Transaction: Classified as a related‑party transaction under MI 61‑101; exempt from formal valuation and minority shareholder approval because the fair market value does not exceed 25 % of market capitalization.

Notable Quotes

(No direct quotes were provided in the release.)