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.

Louis-Nino Kansoun