The Minister of Mines declared that official steps will be taken to intervene and fix the problems, acknowledging that the government had a responsibility to take part in the government-mediated agreement that led to EAM’s collaboration with PMM. The Minister of Mines called a meeting of all parties to discuss the non-compliance of mining operations at Magambazi and the serious breaches to PMM’s agreements with the company for the acquisition and development of the project after meetings with EAM management and the Minister of Mines in June 2024. After the meeting, the minister declared that the government would step in and arbitrate a settlement so that the project could proceed with its development. To ascertain the best course of action, a ministerial hearing was conducted from July 10–13, 2024. In preparation for meeting the Ministry’s request to submit a project recovery plan, EAM has been working with JinJiu to draft an MOU.
The previous MOU, which was drafted in January 2023 following the suspension of PMM’s mining operations, served as the basis for the conditions of the proposed MOU. Under the terms of this now-expired MOU, JinJiu committed to paying US $2,000,000 to acquire all of EAM’s shares of Canaco Tanzania Limited (“CTL”) in order to obtain a 100% stake in the project. About US $60,000,000 has been invested by EAM in resource establishment, exploration, and mining planning. In the first year, JinJiu promised to produce at least 10,000 ounces of gold; by the fourth year, that amount would rise to at least 40,000 ounces annually. According to a gold purchase agreement that the parties must sign, EAM will get 30% of the gold generated by the project at the production cost plus 15%. Until the project is self-sustaining, JinJiu will be liable for all investment funds needed for mine development and production, as well as CTL’s operating expenses.
The Tanzanian Mining Commission and other pertinent governmental bodies must approve the conditions of any transaction between EAM and JinJiu. We are excited by the possibility of partnering with JinJiu on the development of commercial mining operations at the Magambazi project, said Andrew Lee Smith, CEO of East Africa Metals. In terms of realizing the potential of our Tanzanian assets and starting commercial production at Magambazi, the proposed MOU is a big step forward. We appreciate JinJiu’s dedication to investing in and developing the project, as it fits in with our strategic goals. Together, we can fully use the Magambazi mining project to the benefit of all parties involved.
