Konkola North Project Study on Track for June
By Jacqueline Mackenzie
06 Feb 2007 at 04:08 AM EST
resourceinvestor.com
JOHANNESBURG (I-Net Bridge) -- The feasibility study for TEAL's [TSX:TL] Konkola North Copper Project in Zambia remains ahead of schedule and on track for completion by June 2007, the company said on Tuesday.
TEAL is a mineral development and exploration company that is focused on properties in Zambia, Namibia and the DRC. It 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 (Kalumines) Copper-Cobalt Project in the DRC.
Releasing results for the quarter ended December 2006, chairman Patrice Motsepe said good progress has been made with feasibility studies, project developments and exploration drilling at the various assets and properties owned by TEAL.
TEAL recorded a consolidated net loss for the three months ended December of US$4.4 million, or a $0.08 loss per share, compared with a consolidated net loss of $4.6 million, or a $0.09 loss per share for the three months ended September 2006.
The increase on the quarter-on-quarter exploration and development costs, from $3.9 million to $4.2 million, related largely to a ramping-up of work on the Kalumines Copper-Cobalt Project in the DRC following the cessation of artisanal mining that has enabled TEAL to accelerate its exploration and feasibility work, it said.
As at December 31, 2006, TEAL had a net working capital balance of $13.6 million and cash resources of $14.5 million. It recorded $4.6 million net cash outflows on operating activities compared to net cash outflows of $4.1 million for the previous quarter. The cash was used mainly for feasibility studies, exploration work and associated activities to advance the company's projects, including resource expansion drilling.
As part of the Konkola North Copper Project main feasibility study, an independent third-party has completed its assessment of the shaft and associated infrastructure and provided TEAL with a report, which is being included in the study. It has been confirmed that there is no water ingress into the historical production levels, including the shaft bottom that was accessed towards the end of 2006.
The mapping of the underground levels, and sub-levels, is underway. The first underground blast at Konkola North occurred in late 2006 to extract a 50-tonnes bulk sample for confirmatory milling and metallurgical test-work, which is being undertaken by a laboratory in South Africa.
The feasibility study for the Mwambashi Copper Project was completed in August 2006 and development remains subject to a favourable off-take arrangement and a successful financing plan, both of which are nearing conclusion, TEAL said.
Once these are finalised, the project will be presented to the TEAL Board for a final decision on developing a 12,000/tonnes-per-annum copper producer with capital expenditure of approximately $10 million, including contingencies.
TEAL's current expenditure to advance the Mwambashi Copper Project is being directed at the upgrade of the access road, a de-watering program, where eight monitoring holes and one de-watering hole are complete (out of a total 23 holes), and the implementation of a relocation action plan.
Discussions are being held with the various independent contractors involved with the Mwambashi feasibility study to further optimise the project.
Negotiations are also being held with the Zambian authorities on the necessary permits, including surface rights applications, in preparation for project release.
The Mwambashi Copper Project resource is estimated at 11 million tonnes at a grade of 2.03% copper in the measured, indicated and inferred categories, using a 0.5% total copper cut-off. The reserve estimate used in the feasibility study and for an open-pit mining operation only, amounts to three million tonnes at a grade of 2.08% copper.
Management 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, a joint venture with Gecamines, an initial scooping study on the Lupoto resource has been completed, while infill and confirmatory exploration drilling to verify the historical resource is underway.
There is currently no informal mining activity occurring on TEAL's mining licence area. TEAL has moved machinery, including three exploration drill rigs, onto the property for the resource drilling program. Once the drilling is completed, it will enable TEAL to advance the feasibility study for an open-pit mining operation and processing plant.
Management is planning the start of mining on a modest scale to produce a high copper concentrate that will be used to ‘feed’ TEAL's furnace, which will be operational in Lubumbashi by mid-2007.
The furnace that was acquired by TEAL has been structured into a company called TEAL Metals (DRC) that is currently 100%-owned by TEAL.
Consideration is being given to introducing local partners in the DRC into this venture, it said.
During the Phase 1 expansion drilling program, which concluded at the end of June 2006, TEAL announced an increase in the overall Otjikoto Gold Project resource to 32.2 million tonnes, which equates to 1.30 million ounces, at a grade of 1.26g/t gold. This is an increase in inferred gold resources of 46% and an increase in gold grade of 10.3%. An independent competent persons report has been issued and supports TEAL's Phase 1 resource statement of 1.30 million ounces.
A project appraisal study has commenced to further scope the critical mining, metallurgical and financial aspects of the Otjikoto Gold Project based on the current inferred resource.
TEAL has also recently completed a second high resolution airborne survey over a large portion of its prospective Otavi Exploration Area. Results of the survey are being assessed and interpreted to provide direct drill targets
for Otjikoto-style mineralisation.
It is expected that TEAL will conclude the transaction over the coming months with a local Namibian partner, EVI Mining, to acquire a 10% shareholding in Avdale Namibia, it said.
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