TEAL
About TEAL
ARM holds a 65 percent stake in TEAL Exploration & Mining Incorporated (TEAL), which in turn holds a strategic portfolio of near-production mineral projects and a number of properties with significant discovery potential.
TEAL was formed in 2005 as the company to turn to account the many minerals opportunities on the African continent, especially in respect of copper. This follows the acquisition by ARM, and its predecessor Avmin, of large tracts of exploration targets across southern and central Africa.
TEAL was successfully listed on both the TSX and the JSE within the past financial year, and undertook a successful capital raising programme ($33 million) in late 2005 to fund the development of TEAL's exploration assets in Africa.
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Project developments include:
- The Konkola North copper project in Zambia, in which TEAL holds a 100 percent stake. Zambia Consolidated Copper Mines Investment Holdings plc (ZCCM-IH), a company controlled by the Zambian government, has an option to acquire a stake (5 percent free-carried) of up to 20 percent.
- The Mwambashi copper project, in Zambia, in which TEAL owns a 70 percent stake. The balance is held by Korea Zinc Company, Limited (KZC).
- The Kalumines copper-cobalt project (60 percent TEAL-owned) , in a joint venture with state-owned Gécamines.
- The Otjikoto gold project, in Namibia, which is currently 100 percent held by TEAL.
Exploration projects include:
- The Copperbelt Joint Venture exploration areas in Zambia, in which TEAL owns 70 percent, in partnership with KZC.
- The Kafue Joint Venture exploration areas (51 percent held by TEAL) in Zambia, held in partnership with BHP Billiton (49 percent).
- The Otavi exploration area in Namibia, which is solely held by TEAL.
Management
The TEAL board is independent of the management of ARM and the relationship between the companies is structured through an arm's length agreement. A number of ARM board members and executives serve on the board of TEAL.
Review of the markets
The global copper market has not been immune to the surge this year in the prices of commodities and resources. Copper prices, along with those of other base metals, reached record levels in May, and although they fell temporarily from these highs, the copper price has regained some lost ground. Despite some fears of a potential slowdown in international economic growth, demand has been forecast to increase by 5 percent this year. However, the current level of stockpiles at the LME is dangerously low and stockpiles in Shanghai are also depleted. This, together with continued strong demand and likely supply shortfalls/disruptions at the world's two largest copper producers, will support the fundamentals in the copper market.
| Project | Country | Interest | Resources | Concept | |||
|---|---|---|---|---|---|---|---|
| Level | (000t) | Grade | Metal | ||||
| Konkola North | Zambia | 100%* | Inferred | 249 241 | 2.65% | 14.56bn/lb (copper) | A large-scale well-defined underground resource adjacent to Konkola copper mines. An existing shaft and underground development will allow access to this deposit. |
| Mwambashi | Zambia | 70% | Measured, Indicated & Inferred | 10 980 | 2.03% | 491Mlb (copper) | An open-pittable, easily accessible copper deposit. |
| Kalumines | DRC | 60% | Inferred | 8 200 | 3.51% | 634Mlb (copper) | Consists of four shallow deposits with high copper/cobalt grades. |
| Otjikoto | Namibia | 100% | Inferred | 24 500 | 1.13g/t | 0.890Moz (gold) | An open-pittable gold deposit with potential to expand resource in the near term. |
| Kafue JV | Zambia | 51% | Three exploration licences covering 2 200km2. | JV with BHP Billiton covering geological terrains adjacent to the historic Kabwe zinc and copper mines. Drill-ready for zinc, copper and nickel targets. | |||
| Copperbelt JV | Zambia | 70% | Five exploration licence areas covering 2 800km2 adjacent to producing mines on the copperbelt. | . JV with KZC, with potential for copper/gold mineralisation. | |||
Review of the year
Following its listing, TEAL is now well positioned to accelerate project and exploration developments on a number of fronts.
Operational milestones during the year include:
- The feasibility study for Konkola North is under way, which will update the resource and develop a mining plan. The site has existing infrastructure, including a 423 metre deep vertical shaft, two ventilation shafts and three ore haulages.
- The technical assessment for the feasibility study for the Mwambashi copper project has been completed. The decision to proceed with the establishment of a new mine depends on receiving an optimal off-take agreement, successful permitting and securing finance.
- The Kalumines copper-cobalt project feasibility study should be concluded during 2007. Resource drilling is expected to start soon.
- Positive exploration drilling results announced for the Otjikoto gold project. (A memorandum of understanding has been concluded with a Namibian empowerment company, which provides for the acquisition of a 10 percent stake in TEAL's Namibian company, with a right to purchase a further 5 percent stake.)
Outlook and growth
TEAL's exploration and development programme is currently being accelerated in terms of its existing projects and its considerable opportunities, as it works towards unlocking the considerable value of its asset base.TEAL is an important component of the ARM growth strategy into Africa.
More detailed information is available in the Exploration and copper – TEAL (PDF 305KB) section of the annual report.
® 2006 African Rainbow Minerals Limited
