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DJ Eastinco Mining and Exploration PLC Company Update

TIDMEM.P

RNS Number : 9776M

Eastinco Mining and Exploration PLC

14 May 2020

14 May 2020

Dear Shareholder:

I write with another update on Eastinco Mining and Exploration PLC ("Eastinco").

Macro Environment

Two weeks ago on the 30(th) of April, the government of Rwanda issued guidelines for the partial re-opening of the economy while maintaining preventive measures to guard against new outbreaks of COVID-19. These new measures are aimed at protecting all residents and visitors of Rwanda; and, Eastinco will continue to follow all guidelines while completing the wash plant and starting operations. We are very excited to get back to work as it will allow us to complete the wash plant over the course of the next few weeks.

Market Environment

Artisanal mining operations for most mines in country have been suspended. The underlying demand for tantalum nevertheless remains intact. Thus, Eastinco has seen an uptick in tantalum pricing from traders seeking adequate supplies to meet demand requirements. We intend to begin production as soon as possible to demonstrate our capabilities to meet this demand and to seek additional licenses. We believe that the Company is well positioned to become one of the top tantalum miners in the country.

Sources of Capital

As previously stated, our cash levels are relatively low given the delays to the wash plant and production. To alleviate this situation and to secure our long term prospects we are presently seeking new equity capital from the exercise of existing warrants held by share and warrant holders. The warrants' exercise price of 1.5 pence allows for the acquisition of equity for a pre-money valuation of approximately GBP5.5 million or an approximate 50% discount to the prevailing price. We are seeking conversion of no less than 30% of the outstanding warrants which would raise approximately GBP700,000 on or before 22 May 2020. This intended completion date is later than originally communicated, however fits with the extensions to the COVID-19 lockdown in Rwanda.

Shareholders exercising warrants will be offered new four year warrants with a 3 pence exercise price for each warrant exercised. The value of this new warrant is approximately 1 pence per warrant*. Should we receive a minimum of 30% converted we will not seek any additional capital from outside equity investors. Existing shareholders, without warrants but seeking to participate in the conversion process, may purchase warrants for a nominal consideration and participate in the fund raise by contacting management at: charles.bray@eme-plc.com or mike.staten@eme-plc.com.

Uses of Capital

We intend to use any capital raised for the following:

1. At Kuaka, we are near completion of the wash plant. We need working capital to complete the wash plant, begin mining, and generate positive cash flows.

2. At Kuaka, we will utilise capital to undertake exploration work to identify the safest and most efficient sourcing of tantalum ore.

3. At the Huye 50/50 site, we will undertake the exploration work as soon as possible to identify and quantify the tantalum, tin, and tungsten resource and to obtain a mining license with our partners, Dynasty Construction.

4. We have a pending license application to undertake additional exploration work on a highly exciting prospective site.

We will announce the result of the warrant conversions on or around the 25(th) of May. The funds raised will be designated for use as above. We intend that this exercise will be sufficient to allow for us to fully exploit all the aforementioned opportunities and give us sufficient capital to ride out any potential recessionary storm.

Charles Bray

Executive Chairman

Follow us on twitter: @eastinco

*Warrant valuation of 1 pence assumes underlying share price of 3 pence /share, 4 year interest rate of 3.5%, nil dividends, a 3 pence exercise price, and a 35% annualised share price volatility.

   Eastinco Mining & Exploration Plc:                                    charles.bray@eme-plc.com 

Charles Bray, Executive Chairman

ACQUIS EXCHANGE CORPORATE ADVISER:

Alexander David Securities Limited

David Scott --Corporate Finance

James Dewhurst -- Corporate Broking

Telephone: +44 (0) 20 7448 9820

http://www.ad-securities.com

49 Queen Victoria Street, London EC4N 4SA

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END

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May 14, 2020 12:37 ET (16:37 GMT)