| Tue 15 May 2007, 16:15 | | TEL - TEAL Exploration & Mining Inc. - Initiates i |
|
TEL
TEL
TEL - TEAL Exploration & Mining Inc. - Initiates its first Copper Production
TEAL Exploration & Mining Inc.
Corporate Access Number: 31403
ISIN: CA8781511099
(Incorporated in Yukon, Canada on 1 June 2005)
SA Company Registration Number: 2006/003229/10
JSE share code: TEL
JSE short name: TEAL
TEAL INITIATES ITS FIRST COPPER PRODUCTION
* Copper mining commences at Kalumines in the DRC
* `Bridge` debt funding of US$20 million, guaranteed by ARM, being finalized
* Konkola North feasibility remains ahead of schedule
* Konkola North copper resources confirmed and upgraded
* Pre-feasibility study initiated at the Otjikoto gold project
* Additional exploration drilling results
* Mwambashi completes metallurgical testing with processing partner
In releasing results for the quarter ended March 31, 2007, TEAL Exploration &
Mining Incorporated (TSX-"TL") (JSE-"TEL") ("TEAL" or the "Company") has
announced that copper mining has commenced on the Lupoto deposit at TEAL`s 60%-
owned Kalumines Copper-Cobalt Project ("Kalumines") in the Democratic Republic
of the Congo ("DRC").
The new mine, which is being contractor-operated, is expected to mine at a rate
of 70,000 m3 per month and is expected to produce nearly 20,000 tonnes of
greater than 25% copper in concentrate, containing at least 5,000 tonnes of
copper per year. The concentrate will be produced through selective mining and
upgraded by hand-sorting. Full production is anticipated during July 2007.
The Company intends to sell the concentrate to existing smelter operators in the
DRC and later to feed TEAL`s 100%-owned electric arc furnace that will be
operational in Lubumbashi by mid-2007. This furnace has a capacity to produce
approximately 5,000 tonnes per annum of `black copper` ingots grading 85% to 95%
copper.
An assessment study on a larger mine has also been completed and it now remains
essential to conclude the verification and in-fill resource drilling that is
currently underway. This, together with metallurgical test-work, will enable
TEAL to conclude the feasibility study for a larger open-pit mining operation
and processing plant at Kalumines.
TEAL has an existing mining licence at Kalumines. Capital expenditure to
commission the mine is US$2 million, while the furnace will cost US$6 million.
Both mine and furnace are being funded using TEAL`s existing cash resources and
from a one-year US$20 million `bridge` loan facility that TEAL is in the process
of concluding with a commercial bank.
As at end March 31, 2007, TEAL`s cash resources amounted to US$6.2 million.
TEAL`s major shareholder, ARM, has agreed to provide a full corporate guarantee
for a US$20 million `bridge` loan facility. This facility, if successfully
concluded on commercially reasonable terms, will be directed towards this year`s
development work to support activities on the four major projects: the Konkola
North, Mwambashi and Kalumines copper projects, as well as the Otjikoto Gold
Project. Funding for the capital expenditure at Konkola North, Mwambashi and
Otjikoto will be pursued after the feasibility studies have been completed.
The Company recorded a consolidated net loss for the three months ended March
31, 2007 of US$9.6 million, or US$0.18 loss per share. This compares to a
consolidated net loss of US$4.4 million, or US$0.08 loss per share, for the
previous three months ended December 31, 2006. The US$4.7 million increase in
the quarter-on-quarter Exploration and Development Costs relates largely to a
ramping-up of work at Kalumines following the decision to proceed with mining on
the property, as well as costs associated with the installation of a furnace in
Lubumbashi to process the material received from Kalumines. Exploration
drilling in Zambia, primarily focused on the resource upgrade program at the
Mwambashi Copper Project, also contributed to the overall increase.
Over the last quarter, the Company recorded US$7.5 million net cash outflows on
operating activities compared to net cash outflows of US$4.6 million for the
previous quarter. The cash was mainly used for exploration, feasibility studies
and associated activities to advance the Company`s projects, including resource
expansion drilling.
At the Konkola North Copper Project, where TEAL had previously reported inferred
mineral resources of 78.8 million tonnes at 2.14% copper at Konkola North for
the South and East Limb areas, the Company has issued an updated Measured and
Indicated ("M&I") resource statement. These are now:
* M&I - combined East and South Limbs: 24.9 million tonnes at a grade of
2.36% copper;
* M&I - South Limb: 11.3 million tonnes at a grade of 2.35% copper; and
* M&I - East Limb: 13.5 million tonnes at a grade of 2.37% copper.
In addition, total Inferred resources of 47.7 million tonnes at 1.98% copper are
estimated within these areas.
Previously reported resources relating to the southern portion of the Konkola
North property indicate an inferred mineral resource of approximately 107
million tonnes (in Area `A`) and 63 million tonnes (in Area `A` Extension) at
copper grades of 2.30% and 3.88%, respectively. Additional exploration drilling
work is required to increase the geological confidence of these resources. TEAL
has issued tenders to four drilling companies to undertake an 18,000 metre
drilling program in Area `A` Extension and drilling is scheduled to commence in
May 2007.
Existing infrastructure at the Konkola North South Limb deposit includes a 423-
metre deep, vertical and concrete lined shaft, with head-frame, two ventilation
shafts and three main access haulage levels, interlinked with several production
sub-levels. The Konkola North Copper Project feasibility study, based on an
operation to exploit the South and East Limb ore bodies, remains on-track and
the completed study is expected by mid-2007. The study for this mine will also
include an assessment of the viability of initial mining from the South Limb`s
existing shaft and accessible workings and possibly, initially toll-processing
the ore produced.
At the Otjikoto Gold Project in Namibia, the Phase 1 expansion drilling program
concluded at the end of June 2006 and resulted in an overall gold resource of
32.2 million tonnes, which equates to 1.30 million ounces, at a grade of 1.26g/t
gold. TEAL commenced with a Phase 2 exploration plan in August 2006, which
includes (i) further resource expansion drilling to the south-west along strike
and down-plunge, and (ii) drilling on a 25m X 50m centre in the shallow parts of
the known resource. This phase is
aimed at expanding the total resource further and drill results from the Phase 2
resource expansion drilling, which were announced in February 2007 and April
2007, have provided further evidence for the continuation of higher grade zones.
As a result, TEAL has completed an assessment study related to the viability of
a mining operation at Otjikoto. The conclusion of this study was positive and
the company has initiated a pre-feasibility study. Pending a positive result
from the pre-feasibility study, this would form the basis of a bankable
feasibility study to commence in the third quarter of 2007.
TABLE 1
LOCATION BOREHOLE Depth Depth to Corrected Gold g/t
from (m) (m) width (m)
6500N/4850E OT145 136 191 49.50 2.22
Including
OT145 136 140 3.60 6.38
OT145 156 175 31.50 2.56
OT145 175 191 14.40 3.76
6500N/4900E OT88* 149 166 15.30 9.55
OT88 209 212 2.70 2.05
6500/4950E OT118 168 170 1.80 4.81
OT118 205 210 4.50 0.84
6500N/5000E OT87 213 220 6.30 0.55
6100N/4850E OT141 209 213 3.60 1.41
OT141 221 223 1.80 0.88
OT141 266 232 5.40 0.88
6100N/4900E OT126* 229 232 2.70 45.84
OT126 245 265 18.00 4.77
Including
OT126 256 265 8.10 8.78
* Previously reported, Re-modelled
Approximately 6,400 metres of infill drilling has been completed as part of the
initial phase of the pre-feasibility resource upgrade estimation, which is in
progress. Core drilling is on-going and a 15,000 metre, reverse circulation,
drilling program will commence during May 2007 and will result in a second phase
of resource upgrade estimation. The results of these phases of drilling will be
geologically and geo-statistically modelled and are designed to provide
indicated and measured resources.
Eight core boreholes for 1,800 metres have been completed to further delineate
higher grade zones of gold mineralization intersected in the resource expansion
drilling area. Table 1 above shows the results of the boreholes in context with
previously reported adjacent boreholes. The intercepts returned from this area
confirms the presence of the high grade zones of gold mineralization. When the
completed set of results is received, these high grade zones of gold
mineralization will be modelled and included within an expanded Otjikoto
resource.
The technical work for the feasibility study for the Mwambashi Copper Project
was completed in August 2006. Development remains subject to a favourable off-
take arrangement. The process to conclude an off-take agreement for Mwambashi`s
production advanced significantly over the last quarter. A joint metallurgical
testing campaign, between TEAL and a processing partner, has been completed and
commercial terms are being negotiated. A positive Board decision, which will be
subject to a satisfactory off-take agreement and an acceptable funding
arrangement, will enable mine site establishment and open-pit pre-stripping to
commence during 2007, followed by the build-up to full production.
.
The access road to the site has been completed and the de-watering program is at
stage where pump testing has commenced. A final draft report on the relocation
action plan has been received and implementation will start on project release.
Tenders have been received and are being adjudicated for `stripping` of the
open-
pit area, and subsequent contract mining. Discussions are being held with the
various independent contractors involved with the feasibility study to further
optimize the project.
Mr. Claus Schlegel, Pr. Sci. Nat. (No. 400149/90), TEAL`s Vice President:
Exploration and Business Development, is the "qualified person" for the content
of this press release for purposes of National Instrument 43-101.
ends
NOTE:
TEAL is incorporated under the laws of the Yukon, Canada and its common shares
are listed on the Toronto Stock Exchange ("TSX") and the JSE Limited ("JSE").
The common shares of the Company trade under the symbol "TL" on the TSX and
"TEL" on the JSE.
TEAL is a mineral development and exploration company with development projects
and exploration areas in Namibia, Zambia and the Democratic Republic of Congo
("DRC"). TEAL has a portfolio of base and precious metal development projects
and complementary exploration areas, and the Company continues to seek other
opportunities, mainly in southern and central Africa.
TEAL has targeted four specific projects: the Konkola North and Mwambashi copper
projects in Zambia; the Otjikoto Gold Project in Namibia; and the Kalumines
Copper-Cobalt Project in the DRC. TEAL also has interests in various other
mineral licence areas in Zambia and in Namibia on which the Company continues
drilling and other exploration activities.
15 May 2007
Sponsor:
Investec Bank Limited
A copy of TEAL`s Annual Financial Statements and the MD&A are available at
www.sedar.com as well as at www.tealmining.com
For further details contact:
Julian Gwillim (VP: Investor Relations and Corporate Development) on
+1 416 828 1422 (Canada); or +27 82 4524 389 (SA); or julian@tealmining.com,
or
Rick Menell (President and CEO) on +27 82 450 2301; or rick@tealmining.com.
Date: 15/05/2007 16:15:01 Produced by the JSE SENS Department.
