TEAL Exploration & Mining releases results for the three months ended September 30, 2005
17 November 2005
TEAL Exploration & Mining Incorporated (TSX-“TL”) (“TEAL” or the “Company”), which listed on the Toronto Stock Exchange (“TSX”) on November 15, 2005 following its initial public offering (“IPO”) that raised US$31.3 million (net of expenses), today released its interim financial results for the three month period ended September 30, 2005.
On the initial day of trading on the TSX, TEAL’s common shares opened at the IPO offer price of C$2.25 per share and closed, 7% higher, at C$2.40 on modest volumes. At the time of issuing this media release, which was after the close of the market on Thursday, November 17, 2005, TEAL’s closing share price was C$2.25 per share.
TEAL is a mineral development and exploration company that is currently focused on properties located in Zambia, Namibia and the Democratic Republic of Congo. The TEAL portfolio formerly comprised the non-South African mineral development and exploration portfolio of African Rainbow Minerals Limited (“ARM”), a JSE Limited listed company. ARM owns approximately 66.3% of the issued and outstanding TEAL common shares.
Patrice Motsepe, Executive Chairman of ARM and Chairman of TEAL commented: “The listing of TEAL is part of ARM’s growth strategy in Africa. Through the TEAL business we have a dedicated team that will focus on the development of current exploration assets and pursue further opportunities.”
Rick Menell, TEAL’s President and Chief Executive Officer, commented: “The US$31.3 million proceeds will be used to advance our four key mineral projects, progressing each through feasibility and towards development, as well as exploration work to be performed on other high-priority targets. The Company has already mobilized teams that have started feasibility studies on the two Zambian copper projects: Konkola North and Mwambashi. In Nambia, TEAL has appointed drilling contractors to conduct further exploration drilling and two drill-rigs are on-site on the Otjikoto Gold Project, while another drill-rig is currently operating within the Otavi Exploration Area. A further exploration drill rig is currently in operation in Zambia on our zinc prospect located within the Kafue Joint Venture area.”
TEAL incurred a net loss for the quarter ended September 30, 2005 of $1.0 million compared to a profit of $0.1 million for the comparable period to September 30, 2004. This change was due primarily to a foreign exchange loss of $0.4 million on loans from ARM to the operating entities of TEAL, relative to a gain of $0.8 million for the prior period. These loans were denominated in South African Rand for which the exchange rate deteriorated relative to functional currencies in the three month period ended September 30, 2005, compared to the prior period.
Exploration costs remained largely unchanged at US$0.6 million during the three month period ended September 30, 2005, compared to the comparative period last year.
Various activities are underway or planned at each of TEAL’s properties:
Located within the greater Konkola area of the Zambian Copperbelt, Konkola North has an identified inferred mineral resource of 78.8 million tonnes at a grade of 2.14% copper. Historic records, pre-dating National Instrument 43-101, relating to other areas of Konkola North indicate a further inferred mineral resource of approximately 107 million tonnes at grades of 2.30% copper and 63 million tonnes at grades of 3.88% copper. At the south limb, TEAL intends to focus initially on the development of a high-grade region of this vast deposit by re-equipping the existing infrastructure, which includes a 423 metre vertical shaft, two ventilation shafts and three ore haulage levels. Management intends to upgrade the resource base and complete feasibility studies to access the high-grade, shallow copper resource, including the south limb, using the existing infrastructure. The process of redefinition and verification of the resource blocks is underway, which includes a review of previous geo-technical studies that is being audited by SRK Consulting.
The Mwambashi Copper Project is located on the Zambian Copperbelt and is held within TEAL’s Copperbelt Joint Venture Exploration Area. This 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 pre-feasibility study at Mwambashi has advanced and TEAL is currently in a process of resource block verification to upgrade the resource, which will be followed by the completion of a feasibility study to enable a decision to proceed on a fast-track open pittable copper deposit. During the next three to six months, drilling will commence for additional geotechnical and geo-hydrological investigations, as well as for specific metallurgical tests. The feasibility study will include a comprehensive geological, mining and metallurgical review, including mine plan and scheduling, as well as environmental and other operational issues. TEAL is anticipating that this study will be completed during the second quarter of calendar 2006.
Otjikoto is located within the Otavi Exploration Area in north-central Namibia where TEAL made a new discovery of vein-hosted gold mineralization. TEAL has undertaken resource estimation work at Otjikoto and an inferred mineral resource of approximately 870,000 ounces of gold has been defined to date at a grade of 1.06g/t. TEAL’s management believes the resource is open-ended and has the potential for the delineation of further resources. TEAL has started resource extension and delineation drilling in the build-up to complete a pre-feasibility study on a possible new gold mining operation. Further drilling should lead to resource definition within a year: two drill-rigs are currently operational and a ground magnetic survey will commence over the next three months. This information will be combined with the SPECTREMAEM data.
Within the Otavi Exploration Area, TEAL has an exploration drill-rig that is currently operating and is trenching areas highlighted in the SPECTREMAEM survey and grid establishment is underway, which will be followed by a magnetic ground geo-physical survey. It is anticipated that most of the data will be available over the next six months, which may enable a reclassification of resources.
Situated in the Democratic Republic of Congo, in close proximity to Lubumbashi, the Kalumines Copper-Cobalt Project is a joint venture with La G�n�rale des Carri�res et des Mines (“G�camines”). The project area hosts four near surface areas of copper mineralization that TEAL believes may be exploitable using open-pit mining techniques. Two primary areas of interest within the Kalumines area, Lupoto and Kasonta, contain historical inferred mineral resources of 6.7 million tonnes and 1.5 million tonnes, respectively. Lupoto contains grades of approximately 3.13% copper, while Kasonta is grading 5.18% copper. TEAL’s objective at the Kalumines project is to advance the prefeasibility study and conclude negotiations with owners of various processing facilities for future off-take agreements for the high-grade material that is currently being produced by artisanal workers on TEAL’s property.
Copperbelt Joint Venture Exploration Area:
TEAL is focusing on a review of the geological data on the Chipopo area within the Zambian-based Copperbelt joint venture. A field reconnaissance sampling program will also be conducted over the next three months, as will a review of certain copper projects in the joint venture, specifically the Samba, Mwambashi A, Pitanda and Kabula areas. Following these reviews, TEAL will be in a position to target its most suitable area for a surface exploration drilling program.
Kafue Joint Venture Exploration Area:
TEAL is currently assessing the data received from the Falcon� gravity survey over the Lusaka West nickel-PGM target and an evaluation is underway. One drill-rig is operational on the property and TEAL expects that the first data from this program will be available during the first half of 2006.
Additional Zambian Exploration Licence:
Geological reviews will be carried out on the various other properties in Zambia over the next six months to highlight the targets that TEAL intends to concentrate on in future.
Menell concluded, “We are well on track to develop our existing projects by progressing each through clearly defined and articulated milestones, including the completing of feasibility studies. We are optimistic and remain confident that attractive mineral projects will emerge from these feasibility studies.”
A copy of TEAL’s Interim Financial Statements and the MD&A will be available at www.sedar.com as well as at www.tealmining.com.
For further details contact:
(VP: Investor Relations)
+27 82 452 4389
(President and CEO)
+27 82 450 2301
Forward-Looking Information: Statements contained in this news release that are not historical facts are forward-looking statements that involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Although TEAL believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this press release. TEAL disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made in a province or territory of Canada only after the time a receipt for the final prospectus or other authorization is obtained from the applicable provincial or territorial securities regulatory authority, nor shall there be any sale or any acceptance of an offer to buy the common shares in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The common shares of TEAL have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an application for exemption from the registration requirements of U.S. securities laws.