Vancouver, British Columbia, June 1, 2018. East Asia Minerals Corporation (TSXV:EAS) (“EAS” or the “Company”) is pleased to announce that it has entered into an arrangement with Isatis Capital Group of Montreal to secure a credit facility loan for up to $17,500,000 (USD$13,500,000)
The contemplated credit facility arranged will have a maturity of 48 months with EAS being able to terminate the loan at 36 months with a 2% penalty on remaining funds owed and will be secured by a universal deed of hypothec over the Sangihe project in Indonesia. The loan will have an interest rate of 8% and will consist of interest only payments for the first 18 months of its tenure. The loan, at the discretion of the lender(s) is convertible to 99.9 gold bullion as a vehicle of re-payment with 12 months advanced notice and contained within a formal offtake agreement.
The credit facility will be made available to EAS through the issuance in the United States of secured and convertible notes maturing at 48 months relying up rule 506 (c) of Regulation D promulgated under the Securities Act, 1933 as amended.
The financing described herein is contingent to market conditions and regulatory approval in United States and Canada.
Funds will be used to bring the Sangihe Gold Project into production, exploration and infill drilling of the Binebase / Bawone Corridor to increase both resources and reserves as well as general working capital.
The Company’s has completed the Indonesian Feasibility Study (IFS) and AMDAL Environmental reports and once they are submitted and accepted by the Indonesian Mining Department (MEMR), construction of the mining facilities and infrastructure can begin at the Sangihe project. The company anticipates making a decision for gold processing and production to begin in 2018. The Indonesian Feasibility Study is not a Feasibility Study as defined by CIM as required by NI 43-101 but is required under Indonesian law in order to obtain a licence to construct a production facility. The IFS will be re-issued within 30 days as a Pre-Feasibility Study which will identify if all or part of the Mineral Resource may be converted to a Mineral Reserve at the time of reporting. The Company cautions readers that the any production decision made by the Company will not be based on a NI 43-101 feasibility study of mineral reserves that demonstrates economic and technical viability and as such, there may be involved increased uncertainty and various technological and economic risks outlined in the “forward looking statement” below.
Terry Filbert, President & CEO of East Asia Minerals Corporation commented that “this funding solution enables EAS to move forward aggressively on long term plans to develop the Sanghie property to generate revenue and positive cash flow for the Company which will enable us to finishing drilling our the Sangihe and increase production and mine life as well as having the recourses to devote to our Miwah project. This will put the company on a fast track to increase shareholder value in a non-dilutive manner”.
Frank Rocca, BAppSc.(Geology), MAusIMM, MAIG, Chief Geologist of East Asia Minerals Corp. is the Qualified Person as defined under NI 43-101 who has reviewed and approves the content of this release.
The Sangihe gold-copper project is located on the island of Sangihe off the northern coast of Sulawesi and has an existing National Instrument 43-101 inferred mineral resource of 114,700 indicated and 105,000 inferred ounces of Gold. The Company’s 70-percent interest in the Sangihe-mineral-tenement contract of work (“CoW”) is held through PT Tambang Mas Sangihe (PTTMS). The remaining 30-percent interest in PTTMS is held by three unaffiliated Indonesian corporations. The term of the Sangihe CoW agreement is for 30 years upon commencement of the production phase of the project.
The Company also announces that it has closed the first tranche of a non-brokered private placement of 2,200,000 units of the Company (the “Units”) at $0.05 per Unit for gross proceeds of $111,000 (the “Offering”).
Each Unit consists of one common share in the capital of the Company (a “Share”) and one share purchase warrant (a “Warrant”). Each Warrant entitles the holder to purchase one additional common share in the capital of the Company (a “Warrant Share”) at a price of $0.10 per Warrant Share for a period of two years from the closing of the Offering.
The Company has paid eligible finders a cash commission in the aggregate amount of approximately $3,570 and 71,400 finders warrants (“Finders Warrants”) on the Offering within the amount permitted by the policies of the TSX Venture Exchange (the “Exchange”). Each Finders Warrant entitles the holder to purchase one common share in the capital of the Company at a price of $0.10 for a period of two years from the closing of the Offering. All securities issued in connection with the Offering will be subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation.
The net proceeds of the Offering after payment of commissions will be used by the Company to pay expenses related to the Company’s properties in Indonesia, settle payables and for working capital.
EAST ASIA MINERALS CORPORATION
Per: “Terry Filbert”
Terry Filbert, Chairman & CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain statements in this News Release, which are not historical in nature, constitute “forward looking statements” within the meaning of that phrase under applicable Canadian securities law. These statements include, but are not limited to, statements or information concerning future work programs, results and timing of any work programs, the Company’s performance or events as of the date hereof. These statements reflect management’s current assumptions and expectations and by their nature are subject to certain underlying assumptions, known and unknown risks and uncertainties and other factors which may cause actual results, performance or events to be materially different from those expressed or implied by such forward looking statements. Those risks include the interpretation of drill results; the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results will not be consistent with our expectations; commodity and currency price fluctuation; failure to obtain adequate financing; regulatory, recovery rates, refinery costs, and other relevant conversion factors, permitting and licensing risks; general market and mining exploration risks and production and economic risks related to design and engineering, manufacturing, technological processes and test procedures and the risk that the project’s output will not be salable at a price that will cover the project’s operating and maintenance costs. Forward-looking statements should not be construed as investment advice. Readers should perform a detailed, independent investigation and analysis of the Company and are encouraged to seek independent professional advice before making any investment decision. Accordingly, readers should not place undue reliance on any forward-looking statement. Except as required by applicable securities laws, the Company disclaims any obligation to update or revise any forward looking statements to reflect events or changes in circumstances that occur after the date hereof.