The period from here and the next half year to come will be a series of news like this. It is in the interest of both Tenke Mining and the regime in Kinshasa to show the world what it is all about. The data room has opened...now it is up to the Kabila regime to show the investors what it means to be a long term host for mining CO. Now is the time for clarification. We will truly see examples of that during this spring. Share price will double.
"
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NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: TENKE MINING CORP.
TSE SYMBOL: TNK
MARCH 9, 1998
Tenke Mining: Feasibility Study Indicates Tenke Mining
Corp. to be one of World's Lowest Cost Prroducers of
Copper and Cobalt
VANCOUVER, BRITISH COLUMBIA--Tenke Mining Corp. ("TMC") is pleased
to announce that the final feasibility study provides a
preliminary indication that the Tenke Fungurume copper-cobalt
deposits will be among the world's lowest cost producers of copper
and cobalt.
Commenting, Mr. Philip J. Wright, President and C.E.O. of Tenke
Mining Corp., said, "We expect Tenke Fungurume to be at the bottom
of the cost curve and it will be one of the world?s major
producers of copper and cobalt."
"Our indications are for a cost of US$0.10 per pound after cobalt
credits based on a price of US$8.00 per pound for cobalt. This
cost becomes negative at US$10.00 per pound for cobalt."
Over the last 16 months, Lundin Holdings, a subsidiary of TMC, has
been carrying out a feasibility study on the Tenke Fungurume
copper-cobalt deposits located in Katanga Province, Democratic
Republic of Congo. This study is being prepared by Kilborn SNC
Lavalin and is nearing completion. It is expected that final
results will be available before June, 1998.
Net revenue per tonne of ore is expected to be approximately
US$95.50 based on US$0.95/lb copper and US$10.00/lb cobalt.
Operating costs are expected to be approximately US$31.50 and
capital costs are estimated to be US$455 million including owners
costs, pre-production and contingency.
The Tenke Fungurume deposits are located within two concessions
totaling 1,437 square kilometres approximately 175 kilometres
northwest of Lubumbashi, second largest city of the DRC. The
concessions contain extensive high-grade mineral resources that
are estimated to exceed 500 million tonnes with a grade of 3.6
percent copper and 0.28 percent cobalt. The concessions are
extensively under-explored.
Initial production is planned at 100,000 tonnes per annum ("tpa")
of copper with expansion likely to 200,000 tpa from the fifth year
of operation. Cobalt capacity will be expanded to match sales
contracts with approximately 5,000 tpa planned in the first 4
years and 12,000 tpa thereafter. Preliminary production plans
schedule 85 million tonnes of oxide ore at an average acid-soluble
grade of 3.19 percent copper and 0.25 percent cobalt to be
processed during an initial 15 year life.
A long-term power supply agreement has been finalized with SNEL,
the national power utility in the DRC. This agreement is expected
to deliver reliable, low cost hydroelectric power to the mine
site. A robust network of transmission lines brings the power to
an existing substation located on the concession. Draft
agreements have been finalized for sulphur supply, rail operation
and for a secure port facility.
A range of ports is available for product shipment and incoming
supplies. South Africa presently offers the best facilities and
both Durban and Richards Bay are on a direct rail route from site.
Metal will be shipped out, to customers in North America, Asia
and Europe.
TMC has commenced evaluation of funding options and expects to
finalize its funding strategy in June of this year.
Investec Bank Ltd. of South Africa has been mandated to arrange a
procurement debt facility of US$170 million. Micon International
Limited has been appointed by Investec as independent engineer and
is presently reviewing the project and the study on behalf of the
international banks expected to form the project's banking
consortium.
TMC proposes to implement the project using a Turn Key Lump Sum
contract to engineer, procure and construct the facilities and
invitations have been sent to suitably qualified companies to
participate.
Union Bank of Switzerland Limited is advising TMC in relation to
equity. A final dataroom opens on 11 March 1998 and a number of
major companies who have expressed interest in participating in
the development of Tenke Fungurume are in active due diligence.
TMC expects to be in a position to proceed with the project later
this year and is aiming for first copper production by December,
2000.
The concession holder is a partially owned subsidiary of TMC with
TMC holding a 55 percent controlling interest and Gecamines the
remaining 45 percent. TMC is responsible for arranging all the
financing and will receive 100 percent of cash flow until an
amount equal to the financing and interest thereon is repaid.
Thereafter, profits are split 55 percent/45 percent with
Gecamines.
An initial property payment of US$50 million has been paid to
Gecamines. A further US$50 million is due 4 months after
finalization of the final feasibility study and a final US$150
million in May 2003.
The following table sets out the details of production, revenues
and costs based upon current data. This information is undergoing
final verification.
/T/
First 4 Years 15 Year Total
Average Average
Total Ore to Plant
(000'st) 2400 5680 85154
Strip Ratio 6.2:1 7.0:1 7.0:1
Copper Head Grade
(acid-soluble)
(percent) 4.37 3.19
Cobalt Head Grade
(acid-soluble)
(percent) 0.28 0.25
Copper Production (t) 93000 163000 2400000
Cobalt Production (t) 4800 10900 165000
Net Revenue
($/tonne primary ore)x $95.50
Operating Cost
($/t primary ore)
Mine $ 5.50
Process 20.50
G&A 3.50
Contingency 2.00
--------
Total 31.50
--------
Net Margin per tonne $64.00
--------
x After transportation and marketing costs of US$7.50 and based on
copper US$0.95/lb and cobalt US$10.00/lb.
/T/
Tenke Mining Corp. held its Annual General Meeting today in
Toronto.
By Order of the Board
Philip J. Wright, President and C.E.O. "
Regards Marten |
