Antofagasta makes its first African foray
Allan Seccombe
Posted: Wed, 09 Apr 2008
miningmx.com
[miningmx.com] -- ANTOFAGASTA, the Chilean copper producer, has made its first foray into Africa, entering a joint venture exploration agreement on two properties in Zambia with Teal Exploration and Mining.
Teal has just bought out its 30% joint venture partner, Korea Zinc on a larger number of Zambia properties for $4m over the next three years. It extracted two large properties out of that venture and put them into the Antofagasta joint venture.
Antofagasta has bought a first stage 30% of the new joint venture for $5m and will spend $4.5m more to earn up to 50% of the joint venture. Two million dollars of the latter figure is committed.
It doesn’t mean Antofagasta will go through all the way to development, it has in the past dropped exploration projects because they’ve not yielded adequate results.
An exploration programme will run over four years to give the partners a good idea of the resource potential of the two properties, which flank TSX- and JSE-listed Teal’s Konkola North mining project in northern Zambia.
Teal has retained from the Korean Zinc venture the Mwambashi prospect which has just been granted a mining licence. Teal is considering an underground to supplement its surface mine to boost volumes from the property.
The reason Mwambashi was not vended into the Antofagasta JV was that it is too small, said Teal’s Julian Gwillim.
Teal would consider a partnership with either a mining or fellow exploration company to develop the Mwambashi or it could bring in a local group to take a stake in the project much like it did at its Otjikoto gold exploration play in Namibia.
Within the next four to six months Teal will begin raising part of the $450m it needs to become a mid-tier copper producer.
The capital will be raised in stages, involving debt, equity and possibly bringing in partners on some projects, including the two million oz gold resource at Otjikoto in Namibia, which CEO Rick Menell reckons will never be fully valued within Teal.
Teal has a final $10m to draw down in a $50m debt facility, which should see it through to July, but it needs to raise capital before then as it moves towards output of 65,000 tonnes/year by 2012.
TEAL needs $240m to build a 40,000 tonne copper plant at the Lupoto project at Kalumines. It needs a further $160m for its 25,000 tonne Konkola north project, where there is an existing shaft, which has taken $150m out of the budget and given the company a two-year head start.
TEAL plans to spend $30m on an 18-month drilling programme at Area A and needs a further $20m to sustain the business. |
