| Tue 9 May 2006, 7:30 | | TEAL releases results for the three months ended M |
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TEL
TEL
TEAL releases results for the three months ended March 31, 2006
TEAL EXPLORATION & MINING INCORPORATED
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 EXPLORATION & MINING RELEASES RESULTS FOR THE THREE MONTHS ENDED MARCH 31,
2006
HIGHLIGHTS:
- Drilling results announced for the Otjikoto Gold Project
- Mwambashi Copper Project feasibility study advanced
- JSE Limited listing completed
TEAL Exploration & Mining Incorporated (TSX-"TL") (JSE-"TEL") ("TEAL"), which is
incorporated in Canada and listed on the Toronto Stock Exchange ("TSX"), and the
JSE Limited ("JSE") today released its quarterly result for the three month
period ended March 31, 2006.
TEAL is a mineral development and exploration company that is currently focused
on properties located in Zambia, Namibia and the Democratic Republic of Congo.
TEAL"s Chairman, Patrice Motsepe, said, "We are pleased with the progress that
has been made on advancing our three copper projects in central Africa, as well
as our gold project in Namibia, towards production decisions".
Rick Menell, TEAL"s President and Chief Executive Officer, commented, "At the
Otjikoto Gold Project, we have completed 29 additional core boreholes totaling
7,000 metres, out of a planned 38 boreholes totaling 9,000 metres, since October
2005. The available results suggest that a higher grade zone of gold
mineralization may be developed within the resource expansion area. This zone
is related to the interpreted plunge of the mineralization within the sheeted
vein system. Further drilling is being planned to confirm and define the
geometry of this zone".
The results of the resource expansion drilling will be combined with the current
resource base and the updated resource estimation will be completed by end July,
2006. These results will be used to conduct a project appraisal study of the
Otjikoto Gold Project.
Menell continued: "The progress being made at the Mwambashi Copper Project
remains encouraging. Discussions have commenced with suppliers, including,
future material toll processing arrangements, transport haulage, road concept
design as well as the sourcing of mine equipment and future employees".
TEAL recorded a net loss for the three months ended March 31, 2005 of $2.3
million or $0.04 per share, compared to a loss of $1.3 million, or $0.02 per
share for the three months ended December 31, 2005. Quarter on quarter, net
expenses show a 91 percent increase, however, as TEAL"s effective date of
acquisition of its operating entities occurred on November 15, 2005, the
December 31, 2005 quarter"s results only include one and half months of
consolidated results. Hence, the increase of $1.5 million in exploration and
development cost represents a 55% increase on a comparable basis and is in line
with accelerating work on all the Company"s projects. Associated administration
and corporate costs, on a comparable basis, are in line with the previous
quarter.
Exploration and development costs during the period totaled $2.2 million at
March 31, 2006, in comparison to $0.7 million in the corresponding three month
period. The increase is primarily due to higher drilling and associated
contractor and personnel costs incurred on the Otjikoto and Mwambashi
development projects. In Zambia, expenditure on the Mwambashi Copper Project
feasibility study was directed at accelerated geo-technical and geo-hydrological
drilling, costs on the environmental impact study and auditing the resource
database. Geological consulting to audit and upgrade the Konkola North resource,
metallurgical studies and installing a ventilation system to assess the
underground shaft infrastructure, comprised most of the expenditure on the
Konkola North Copper Project. In Namibia, resource expansion drilling and
associated exploration cost increased by $0.3 million. Some 80% of planned
expansion drilling holes have been completed, which comprised most of the
Namibian expenditure.
As at March 31, 2006, the Company had a net working capital balance of $28.5
million. During the March, 2006 quarter, most of the African Rainbow Minerals
Limited ("ARM") interim facility was repaid, leaving a balance of $0.9 million
of which settlement is anticipated before June 30, 2006. The Company made $2.1
million net cash outflows on operating activities compared to net cash outflows
of $1.4 million for the corresponding 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, a review and audit of the existing
geological database with an objective of reclassifying and upgrading the
resource base is underway. This is expected to be completed subsequent to fiscal
year-end and the information, together with the ongoing review of possible
future underground development, is essential for the mining schedule and
extraction plan that will form part of a feasibility study. An assessment of
the Konkola North shaft as well as surface and underground infrastructure has
also started. The ventilation system to allow this assessment to proceed, and
the necessary power requirements, has been installed and the first underground
visit is currently being conducted. Management anticipates that an early
indication of the capital required for re-equipping the shaft and related
infrastructure will be available subsequent to fiscal year-end. Metallurgical
reviews of previously completed test work have also advanced.
A contracting company has been appointed to conduct a technical appraisal of
Konkola North"s Area "A" Extension. This work will be undertaken during May
2006. Following the technical appraisal of the Area "A" Extension, a scoping
study will be undertaken, which is expected to be completed subsequent to fiscal
year-end. This study will embrace the technical requirements to assess the
resources more thoroughly, the costs to develop a shaft and related
infrastructure, mining methods and the costs and time-line to evaluate and
develop this resource.
The Mwambashi Copper Project represents TEAL"s nearest to production prospect.
An indicated mineral resource of approximately 8.6 million tonnes at 2.43%
copper and 0.07% cobalt has been identified. The results of the review and
audit of the existing database have been received and an updated resource
statement will be issued subsequent to fiscal year-end, which will coincide with
the release of the feasibility study at Mwambashi. Pending the results of this
study, it is expected that by end of calendar 2006, TEAL will have completed the
necessary permitting requirements and finalized marketing and off-take
arrangements, where after mine site establishment and open-pit pre-strip mining
will commence. Build-up to full production is expected during the 2007 calendar
year.
Public Participation meetings of interested parties occurred towards the end of
March, 2006. The Environmental Impact Study will be submitted to the Zambian
authorities by September, 2006.
Additional metallurgical test-work has commenced to increase the confidence in
processing and recoveries.
TEAL has previously disclosed an inferred mineral resource of 25.6 million
tonnes at 1.06g/t for 873,000 ounces of gold defined to date at the Otjikoto
Gold Project. The Company believes the resource has potential for the
delineation of further resources. TEAL has also previously conducted airborne
geophysics, using the Spectrem airborne electro-magnetic ("Spectrem AEM") survey
technology, together with geological compilation over the project, and has
identified various targets, several of which are high priority and in proximity
to the known resource. TEAL completed a first phase resource drilling (12,740
metres) in 2005, with metallurgical test work and conceptual mine design
studies.
On April 19, 2006, TEAL announced a revision of the previously disclosed
Otjikoto Gold Project resource estimation, as well as progress with the on-going
resource expansion drilling program, and the identification of coincident
Spectrem AEM and gold-in-soil anomalies, 2km to the southwest of the Otjikoto
resource.
The revision of the resource estimation relates to a change from the previous
`soft grade boundary" approach to a conventional `hard grade boundary" approach,
which is normally used to report such inferred resources. The gold cut-off grade
used was 0.5 g/t. The previous `soft grade boundary" method requires the
extension of the resource envelope wire frame by 1 metre into both the hanging
and footwall. The `soft grade boundary" inferred mineral resource was estimated
at 873,000 ounces of gold, while the `hard grade boundary" inferred resource is
estimated and revised to 24.5 million tonnes at 1.13 g/t gold for 890,000 ounces
of gold, representing a 7% increase in grade.
Menell added: "Geological logging indicates the continuation of the sheeted vein
system along strike to the southwest. The veins are of a similar mineralogy to
those within the known resource and visible gold mineralization has been noted
in some intersections".
TABLE 1: Summary: Corrected width and gold grades for two sections at the
Otjikoto Gold Project indicating a potential higher grade zone of gold
mineralization developing towards the south
LINE BOREHOLE DEPTH (m) TO CORRECTED WIDTH GOLD
FROM (m) (g/t)
6500N CROSS SECTION OT84 25 32 6.30 1.08
SECTION A - B
OT84 129 142 11.70 0.75
OT85 145 188 38.70 0.83
INCLUDES 145 160 13.50 1.15
181 188 6.30 1.14
OT88 149 166 15.30 9.55
OT88 209 212 2.70 2.05
OT87 RESULTS PENDING
4900E LONG SECTION OT70 122 131 8.10 2.51
SECTION C - D
OT70 139 168 26.10 0.52
INCLUDES 162 168 5.40 1.06
OT73 139 172 29.70 0.59
OT76 156 164 7.20 3.53
OT79 128 140 10.80 1.94
OT79 171 188 15.30 1.05
OT90 163 179 14.40 4.33
OT90 211 223 10.80 2.09
OT64 RESULTS PENDING
OT104 RESULTS PENDING
Visual observations of the core indicate that another vein array is developed,
within the OTC Zone, close to the OTB Marble contact. This vein system has not
been included in the Otjikoto Gold Project"s resource estimation to date. A
geological and grade model will be constructed for this zone of gold
mineralization, which will be included in the resource estimation update.
Further drilling will target the higher grade zones, and specific drilling for
metallurgical testwork will be undertaken. The results of the resource expansion
drilling will be combined with the current resource and the updated resource
estimation is expected to be completed by the end of July, 2006. These results
will be used to conduct a project appraisal study of the Otjikoto Gold Project.
The conclusions of this study will dictate the design and the nature of the
subsequent feasibility work, with the objective of converting the inferred
resources into mineable reserves. This study will also take into consideration
the pit design parameters and options as well as a financial appraisal.
Mr. Paul van der Merwe, Pr. Sci. Nat., Mineral Resource Manager with ARM is the
"qualified person", as defined by the Canadian National Instrument 43-101,
responsible for this resource estimation in respect of the Otjikoto Gold
Project.
At the Kalumines Copper-Cobalt Project an agreement was signed with NOVA Mining
s.p.r.l. ("NOVA") to work in collaboration with small-scale miners on some of
TEAL"s properties to purchase and remove up to 1,000 tonnes a month of
mineralized material from surface. For the period up to March 31, 2006, NOVA
experienced various logistical problems in the sourcing of anticipated grades
and size-fraction of oxide copper material from the site. This has delayed
payments from NOVA to TEAL and discussions are in progress to ensure a
satisfactory commercial relationship in the future.
Within TEAL"s Copperbelt Joint Venture Exploration Area, the Chipopo area
remains a high priority target. Management believes this area has many
geological similarities to the Kansanshi area. During the next six months, a
more detailed investigation including the drilling of targeted anomalies, is
expected to progress. The assessment work being done on the other areas of
mineralization within the Copperbelt Joint Venture (historical resources of
material importance) will be completed and drilling of the shallow resource
projections will also have commenced.
Within TEAL"s Kafue Joint Venture Exploration Area, exploration drilling has
started on the Kabwe West licence area. Priority targets are the Lukali and
Mufukushi copper mineralization occurrences and high grade zinc mineralization
targets defined by the Falcon gravity survey. The first of three boreholes to
evaluate the `Y" nickel anomaly on the Lusaka West property has started and all
drill holes should be completed subsequent to fiscal year-end. Pending positive
results, further drilling will commence.
TEAL Corporate
TEAL announced on April 3, 2006 that it had obtained a secondary listing of its
Common Shares on the JSE. The main reasons for the secondary listing on the JSE
are to enhance South African investors" awareness of TEAL, thereby enlarging
TEAL"s potential investor base, which could lead to increased liquidity in
TEAL"s shares; and to facilitate direct investment by South African residents in
TEAL.
Effective February 28, 2006, Ms. Alyson D"Oyley was appointed General Counsel
and Corporate Secretary.
Mr. Claus Schlegel, Pr. Sci. Nat., TEAL"s Vice President: Exploration and
Business Development, is the "qualified person" for the content of this press
release in terms of National Instrument 43-101.
ends
A copy of TEAL"s Interim Financial Statements and the MD&A is available at
www.sedar.com as well as at www.tealmining.com
Sponsor
Investec Bank Limited
Date: 09/05/2006 07:30:27 AM Produced by the JSE SENS Department
