| Wed 15 Nov 2006, 7:54 | | TEAL - Results for the quarter ended September 30 |
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TEAL - Results for the quarter ended September 30, 2006
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 RELEASES RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2006
HIGHLIGHTS
* Technical team gains access underground at Konkola North through existing
shaft
* Mining licence issued for the Mwambashi Copper Project: TEAL now has
mining licences for all three copper projects - Mwambashi and Konkola
North (in Zambia) and Kalumines (in the DRC)
* Gold resource increased by 46% to 1.3 million ounces over the last year
at the Otjikoto Gold Project in Namibia
* Resource expansion drilling at the Otjikoto Gold Project continues
TEAL Exploration & Mining Incorporated (TSX-"TL") (JSE-"TEL") ("TEAL" or the
"Company"), which is incorporated in Canada and listed on the Toronto Stock
Exchange ("TSX"), and the JSE Limited ("JSE") today released its results for
the three months ended September 30, 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 ("DRC"). The Company has targeted four specific projects: the
Konkola North and Mwambashi copper projects in Zambia; the Otjikoto Gold
Project in Namibia; and the Kasonta-Lupoto Mines sprl ("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 is 64.9% owned by the South African
diversified mining company, African Rainbow Minerals Limited.
Commenting on progress over the last quarter, TEAL"s Chairman, Patrice
Motsepe, said, "TEAL is establishing a strong platform from which to take
advantage of growing opportunities in the base and precious metals mining
sectors throughout Africa".
Rick Menell, TEAL"s President and Chief Executive Officer, commented, "As part
of the Konkola North Copper Project feasibility study, we have completed the
installation of a winder and conveyance system within the existing shaft and
have gained underground access into the historical workings. Our project team
is now focused on re-surveying the underground working areas and a bulk sample
will be taken for confirmatory metallurgical test-work. Importantly, there is
no evidence of water ingress into the shaft area, including the historical
workings, and the haulage levels remain in good shape with the hanging-wall
intact. There is some evidence of steel corrosion on some of the steelwork and
costs are being evaluated for appropriate corrosion protection".
Menell continued, "As a result of better than expected conditions underground,
and following an early shaft evaluation, the feasibility study will now also
include an assessment of the viability of extracting ore from the existing
workings and toll-processing these ores. The economics of this `rapid-entry"
study will be dependent on the amount of ore that can be hoisted by using the
existing shaft system as well as toll treatment charges. We expect that this
`rapid-entry" study will be completed early in 2007".
The Company recorded a consolidated net loss for the three months ended
September 30, 2006 of US$4.6 million, or US$0.09 loss per share. This
compares to a consolidated net loss of US$5.4 million, or US$0.10 loss per
share, for the previous three months ended June 30, 2006.
As at September 30, 2006, the Company had a net working capital balance of
US$18.4 million and cash resources of US$20.0 million. The Company recorded
US$4.1 million net cash outflows on operating activities compared to net cash
outflows of US$2.7 million for the previous quarter. The cash was used mainly
for exploration, feasibility studies and associated activities to advance the
Company"s projects, including resource expansion drilling.
Over the next six months, management is expecting to complete a feasibility
study on the Konkola North Copper Project"s south limb focusing on the
development of previously defined and partially developed resources, a
separately defined higher copper grade region of the resource, and re-
equipping the existing infrastructure, which includes the No. 2 shaft, a 423
metre deep, vertical shaft, a ventilation shaft and three production haulage
levels. While the main focus of the feasibility study remains on the south
limb, the assessment is also being extended into the possibility of accessing
the east limb by means of a twin decline system underground.
During the quarter ended September 30, 2006, both the feasibility study and
the geostatistical resource model for the Konkola North orebody were advanced
considerably with a draft report being completed. The new model incorporates
the geological interpretation of the latest wireframed ore envelope to apply
an estimation methodology different from those previously used. This work is
still under review by TEAL and it is anticipated that the results will be
released early in 2007.
At the end of the last quarter TEAL announced that the Mwambashi Copper
Project feasibility study, for a 12,000 tonnes per annum copper producer, was
completed and development remained subject to a favourable off-take
arrangement and a successful financing plan, both of which are being actively
pursued.
The Company announced recently that the Zambian Minister of Mines and Minerals
Development had granted TEAL a Large Scale Mining Licence over our property in
the Musenga area where the Mwambashi Copper Project is situated. The newly-
acquired mining licence, covering an area of 330km2, includes Mwambashi and
also incorporates three other exploration targets held by TEAL known as the
Samba, Pitanda and Mwambashi `A" copper prospects. These prospects were
explored in the past and historical inferred resources have been defined. TEAL
is currently drilling the three areas further to expand the resources and to
bring these resources into compliance with National Instrument 43-101.
All three of TEAL"s copper projects, namely Mwambashi and Konkola North (in
Zambia) and Kalumines (in the DRC) have now secured long-term mining licences.
Negotiations have also commenced to finalize the Development Agreement with
the Government of the Republic of Zambia, which will define and confirm the
various taxation, custom duties and other obligations governing future
operations at Mwambashi.
Management still anticipates that mine site establishment and open-pit pre-
stripping will commence during 2007, followed by the build-up to full
production.
At the Kalumines Copper-Cobalt Project, the program to stop the informal and
illegal mining, that has inhibited access and delayed the Company"s resource
confirmation and expansion drilling, has progressed satisfactorily. TEAL has
started moving machinery, including two exploration drill rigs, onto site and
work to prepare access and drill platforms for the resource expansion program
is now underway. Although a group of informal miners are still active on the
property, most of these individuals have been registered with the local
authority and are cooperating with TEAL as it implements its work program.
Work has also started on upgrading the access road into the property and
environmental studies have advanced, and applications are being prepared for
submission to the authorities to enable some mechanized mining to commence
that will replace the current mining practices being used by the informal
miners. Following the completion of the scoping study and, as the Company now
has full site access, the objective is to advance the feasibility study for an
open-pit mining operation to produce an oxide concentrate. This concentrate
will be used to feed TEAL"s furnace that will be erected and operational in
Lubumbashi during the first half of the 2007 calendar year.
In October 2006, TEAL announced the results of the first phase of its resource
expansion project at the Otjikoto Gold Project. The current inferred resource
estimation is based on 126 boreholes. Three mineralized zones were identified
and have been geologically modeled based on vein intensity, vein mineralogy
and using a 0.4g/t gold cut-off grade. The result has been an increase in
inferred gold resources by 46% from 0.89 million ounces contained gold to 1.30
million ounces, with the resource grade increasing from 1.13g/t to 1.26g/t
gold. TEAL is continuing drilling to expand the total resource further, guided
by higher grade drill intersections at the southern and eastern zones of the
resource identified to date. These encouraging results have also led TEAL to
begin an intensive infill drilling program with the aim of re-classifying
portions of the inferred resource to higher-confidence measured and indicated
categories.
Within the Greater Otjikoto Exploration Area, positive results were received
from previous soil sampling for gold anomalies in a four square kilometer area
directly south-west and along strike extension of the Otjikoto Gold Project.
The soil survey covers both high priority SpectremTrade Mark airborne electro-
magnetic ("SpectremTrade Mark AEM") anomalies and previously identified ground
magnetic anomalies. Nine reverse circulation boreholes were completed totaling
approximately 430 metres. These boreholes targeted the gold in soil anomalies
that were identified during the soil sampling program. Within the Otavi
Regional Exploration Project, 410 soil samples have been collected over one of
the areas and submitted for gold analyses. Four diamond drill boreholes were
completed, testing four SpectremTrade Mark AEM anomalies identified during the
2005 airborne survey. Boreholes ranged in depth from 150 to 200 metres and
assay results are being awaited. The Company will continue to release
exploration drilling results after these have been assayed, compiled and
verified in terms of the correct procedures.
The Namibian Ministry of Mines and Energy has also granted TEAL an additional
exclusive prospecting licence over the area that lies immediately to the north-
east of the current Otjikoto Gold Project.
TEAL announced on November 1, 2006 that Jarrad Charles Niehaus had departed
from the Company and vacated his position as Chief Financial Officer ("CFO").
Effective November 14, 2006, the Board of Directors appointed Hannes Meyer as
TEAL"s CFO. Hannes is a Chartered Accountant (South Africa) with more than ten
years experience in the mining industry. Prior to joining TEAL, he held the
position of Senior Financial Manager: Business Development with AngloGold
Ashanti Limited where he gained extensive experience in all facets of
corporate finance during his seven year tenure at that company. While at
AngloGold Ashanti he also worked in the DRC and Tanzania on short-term
secondments. Prior to joining AngloGold Ashanti, he was employed by Randgold
Resources Limited, during which time he spent over two years working at a
mining operation in Mali. He completed his articles with a South African
accounting firm and he obtained his B.Com (Hons) in accounting from the
University of Pretoria in South Africa.
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 for purposes of National Instrument 43-101.
ends
A copy of TEAL"s Financial Statements for the three month period ended
September 30, 2006, 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: 15/11/2006 07:54:14 AM Produced by the JSE SENS Department
