East Africa Metals Announces Short Term Related Party Loan

VANCOUVER, BC--(Marketwired - January 17, 2017) - East Africa Metals Inc. (TSX VENTURE: EAM) ("East Africa" or the "Company") East Africa announces that SinoTech (Hong Kong) Corporation Limited, an insider of the Company, has agreed to provide an unsecured loan to the Company in the amount of $500,000 at an interest rate of 12% per annum. The loan and all accrued and unpaid interest (non-compounding) is payable upon the earlier of (a) 10 business days after the Company's closing of the $5,200,000 financing with Shandong Tyan Home Co., Ltd. (see news release dated January 9, 2017); or (b) 90 days from the Company's receipt of the loan proceeds. East Africa understands that the Shandong Tyan Home Co., Ltd financing is in its final regulatory approval process.

"The continued support of SinoTech as we develop our Ethiopian assets is greatly appreciated," stated Andrew Lee Smith, company president and chief executive officer. "East Africa expects to continue to benefit from the contributions of our Beijing-based partner as we continue to advance the Harvest and Adyabo projects."

The proceeds will be used for short term working capital, engineering work at the Terakimti Oxide Gold Project and exploration work to further define the resource at the Adyabo Project.

The loan from an insider is considered a related party transaction pursuant to Multilateral Instrument 61-101 Protection of Minority Shareholders in Special Transactions. The loan is exempt from the formal valuation requirement of such instrument and policy on the basis that the Company is not listed on a market specified under such instrument and policy, and the loan is exempt from the minority shareholder approval requirement of such instrument and policy on the basis that the loan is made on reasonable commercial terms which is not convertible into voting or equity securities of the Company.

The Company did not file a material change report 21 days prior to the closing of the loan as the Company considered it in the best interests of the Company to close the loan in order to use the funds prior to that time period.

About East Africa
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 196 square kilometres immediately west of the Harvest Project. The Company owns 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. Additionally, the Company owns the 93 square kilometre Handeni Property located in north-eastern Tanzania. Handeni includes the Magambazi Project, a gold deposit discovered in 2009. East Africa has entered into a definitive agreement with an arm's length private exploration and development Company to advance the project.