East Africa Metals' Magambazi Partner Engages Gareth Taylor as General Manager - Seite 2

The Magambazi Project is located in the emerging Handeni gold district in eastern Tanzania, 180 kilometres northwest of Dar es Salaam and 140 kilometres southwest of the port city of Tanga. The Project consists of two mining licenses (which cover 9.9 square kilometres) and two prospecting licenses, for an aggregate total of approximately 91 square kilometres. An initial mineral resource estimate for Magambazi was announced on May 15, 2012. Using a cut-off grade of 0.5 grams per tonne gold, Magambazi is estimated to contain an indicated mineral resource of 15.2 million tonnes grading 1.48 grams per tonne gold and containing 721,300 ounces, as well as an inferred mineral resource estimate of 6.7 million tonnes grading 1.36 grams per tonne gold and containing 292,400 ounces.

Other key terms of the agreement between East Africa and Tanzania Goldfields also include the following commitments from Tanzanian Goldfields:

• pay East Africa approximately US$1 million in cash for the book value of the camp, equipment and other assets;
  
  
• convey to East Africa the right to receive a 1.6% Net Smelter Royalty on production, capped at US$1.8M;
  
  
• issue treasury shares of Tanzanian Goldfields that are expected to represent 9.9% of the Tanzanian Goldfields' outstanding shares. Tanzanian Goldfields intends to list on the London Stock Exchange's AIM and expects to issue such shares to East Africa before the listing; and
  
  
• offer East Africa a seat on the Board of Directors of Tanzanian Goldfields and a seat on the Management Committee of the Magambazi project.
  
  
• East Africa is not required to contribute to capital or exploration expenditures with respect to the construction and development of any of the Assets. East Africa has received US$450,000 at the date of this news release towards the purchase price and camp payments, with the balance due March 2017.

About East Africa
In addition to the Tanzanian Assets, the Company's principal assets and interests include both the 70%-owned Harvest polymetallic VMS exploration Project, which hosts the Terakimti Deposit and which covers approximately 86 square kilometres in the Tigray region of Ethiopia, 600 kilometres north‐northwest of the capital city of Addis Ababa, and the Adyabo Project, hosting the Mato Bula trend Adyabo Resource, covering 225 square kilometres immediately west of the Harvest Project. The Company owns 80% of the Adyabo Project, and upon execution of a net smelter return agreement the Company will own 100% of the Adyabo Project, subject to a 2% NSR. East Africa now has mineral resources defined at both projects in Ethiopia and plans to continue to test priority targets.