| Mon 17 Nov 2008, 8:26 | | TEL - TEAL Exploration & Mining Inc - Report For The Quarter-Ended September 30 |
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TEL
TEL
TEL - TEAL Exploration & Mining Inc - Report For The Quarter-Ended September 30,
2008
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
Friday, 14 November, 2008
REPORT FOR THE QUARTER-ENDED SEPTEMBER 30, 2008
* Despite stock market volatility and commodity price declines, TEAL
continues copper focused exploration drilling and other activities on its
significant resource base in Zambia and the DRC:
- Over 14,000 metres of an 18,000 metres copper exploration drilling
program completed at Konkola North`s Area `A` in Zambia
- Over the last three months, 13,600 metres of copper exploration
drilling completed on the Kalumines property in the DRC
- Independent verification and sign-off received for a first-phase
resource at the Lupoto Copper Project in the DRC
* Cost cutting initiatives, including a scaled-down mining rate, introduced
at the Lupoto mine in the DRC
In releasing its results for the three month period ended September 30, 2008,
TEAL Exploration & Mining Incorporated (TSX-"TL") (JSE-"TEL") ("TEAL" or the
"Company") has announced that despite the current market environment, it will
continue with its large copper exploration programs on its large resource base
in Zambia and the DRC.
At the Konkola North property in Zambia, TEAL is currently conducting an
exploration program on its Area `A` to confirm and upgrade the current inferred
mineral resource estimate, which totals 219.5 million tonnes, or 12.78 billion
pounds, grading 2.64% copper. Four exploration drill rigs are operational and
as at the end of the last quarter 14,186 metres of the 18,000 metres drill
program had been completed. A geological model is currently being constructed
that will aid the placement of the drill rigs for the remaining metres to be
drilled.
At the northern end of the Konkola North property, on the South and East limbs,
a revised feasibility study has been compiled to assess the viability of a
copper mining operation. The revised study, in its current form, has been
submitted to TEAL`s partner, ZCCM Investment Holdings plc. This study requires
additional inputs with an objective of increasing the size of the underground
infrastructure and concentrator plant, various optimization studies -
specifically in terms of shaft capacities - and re-scheduling programs, before a
final version can be completed. A process of engagement with the Zambian
authorities on the taxation structure is also underway.
At Kalumines in the DRC, TEAL has focused its resource definition, feasibility
study work and initial mine production on the Lupoto Copper Project. TEAL is
responsible for conducting and funding a feasibility study on Kalumines, which
is for delivery to Gecamines by September 22, 2009.
During the last financial year, TEAL approached SRK Consulting South Africa
(Pty) Limited ("SRK") for an independent technical review of the mineral
resources and for the compilation of an independent Technical Report which
conforms to the requirements of the Canadian Institute of Mining`s National
Instrument 43-101 ("NI 43-101") project. SRK has now reviewed the technical
studies undertaken on Lupoto leading to the estimation of mineral resources, at
a 0.5% copper cut-off, as follows:
* Indicated Resources: 14.20 mt @ 2.47% TCu, 1.65% ASCu; and
*
Inferred Resources: 9.13 mt @ 2.04% TCu, 1.47% ASCu.
The total strike length of the Lupoto structure is 3,698 metres. The copper
orebody at Lupoto is about 25 meters thick and the dip varies from 90o to 65o.
Importantly, the copper mineralization remains open ended along strike and at
depth, as the first phase drilling has only defined the copper orebody to an
average vertical depth of 80 metres. No cobalt credits are included at this
stage.
Phase two drilling at the Lupoto Copper Project is now underway, and over the
last three month period, 13,600 metres of exploration drilling was conducted on
the Kalumines property, which included 50 boreholes for 8,133 metres on the
Lupoto Copper Project area. Three exploration drill rigs are active on the
Lupoto project, while one rig is used exclusively to conduct reconnaissance
drilling on other areas of the Kalumines property.
TEAL has completed its assessment of the current small-scale mining operation
and its continued production level at the Lupoto Copper Project and, as a result
of current market conditions, mining production was reduced from 300,000m3 to
170,000m3. Management has since reduced this even further, to 50,000m3 a month,
from September 2008 onward. As a result of the scaled-down mining rate ,
Kalumines has advanced a process of reviewing its employee complement. Various
other major contracts have been reviewed and several cost cutting initiatives
have been implemented.
In September 2008, TEAL received written notification from Gecamines informing
the Company that pursuant to the DRC`s Mining Contracts Review process, the
Company was required to negotiate an addendum to its agreement with Gecamines.
Meetings were held with Gecamines in September and October 2008 and terms of an
addendum were agreed. The revised terms are subject to the approval of the DRC
Minister of Mines. In the interim, drafting of the addendum has commenced.
TEAL has announced an increase in the Otjikoto Gold Project`s indicated gold
resource from 460,000 ounces to 1.05 million ounces of gold, equating to 23.3
million tonnes grading 1.40g/t, with an additional 877,000 ounces contained in
the inferred category at a grade of 1.41g/t. A comprehensive geological model,
which takes into account the 77,167 metres drilled at the Otjikoto Gold Project,
is now being compiled to estimate the final grades and tonnages that will be
used in the pre-feasibility study.
As a result of the scaled-down mining rate and the suspension of deliveries into
certain copper concentrate contracts at the Lupoto Copper Project, the Company
generated lower revenues for the quarter ended September 30, 2008 of $3.9
million, which resulted in a contribution from sales of $0.4 million. Revenues
for the last quarter, ended June 30, 2008, were $8.6 million with a contribution
from sales of $5.3 million. After other expenses, principally exploration and
development costs of $10.2 million, the net loss amounted to $14.1 million (June
30, 2008: $3.7 million - loss), or $0.26 loss per share ($0.07 - loss per
share).
As at September 30, 2008, the Company had available cash of $8.6 million. TEAL
has fully utilized the unsecured $85 million facility, which is repayable on
August 31, 2009. The loan is guaranteed by TEAL`s holding company, African
Rainbow Minerals Limited ("ARM"). With the substantial accumulated deficiency,
commitments and planned exploration and development programs, the Company is
dependent on ARM for continued support. A letter of financial support has been
made available to TEAL by ARM, which provides the Company with financial
assistance amounting to ZAR385 million up to September 30, 2009. This will allow
the Company to cover liabilities and commitments in the ordinary course of
business. The first draw-down on this facility occurred at the end of October
2008.
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 the DRC, Zambia, Namibia, and Mozambique. 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 specific projects: the
Konkola North Copper Project 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.
TEAL`s Financial Statements for the quarter ended September 30, 2008 and its
Management`s Discussion & Analysis 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 +27 82 4524
389 (SA); or julian@tealmining.com
Date: 17/11/2008 08:26:44 Produced by the JSE SENS Department.
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