Rick Menell, CEO, Teal Mining & Exploration
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TEAL needs another $200m

Posted: Mon, 03 Apr 2006

[miningmx.com] -- TORONTO-listed TEAL Exploration & Mining (TEAL) will come to the market for up to $200m within the next 18 months, as it accelerates its copper production strategy to tap into a hearty commodity market, said CEO Rick Menell on April 03.

TEAL, the latest exploration company to list on the JSE, is bringing a small copper mine into production in Zambia. It is also advancing feasibility studies on three copper and gold projects in Zambia, Namibia and the Democratic Republic of the Congo (DRC).

“We need $100m to $200m more, depending on what the feasibility studies show us over the next 12 to 18 months,” Menell told Miningmx at the launch of TEAL’s JSE listing.

“That’s total requirement. We could prudently raise some debt but undoubtedly we’ll be looking for some equity. We’ll look for that wherever there are investors who are interested. South Africa is now part of that.”
We could prudently raise some debt
TEAL raised $33.5m in November to bring its Mwambashi copper mine in Zambia into production early next year, and complete feasibility studies on its Konkola North copper project in Zambia, its Kalumines prospect in the DRC and a gold deposit in Namibia.

Mwambashi is undergoing a final feasibility study before moving into production of 12,000 tonnes of copper a year. Crushed oxide ore will be sold to other companies.

“It will have a material cash flow of a few million dollars that will underpin the company for at least six years and keep us in good standing,” Menell said.

Menell led Avmin in one of the first major privatisation investments on the Zambian copper belt at Chambishi in 1998. A low cobalt price, a faulty smelter and a need to reduce corporate debt sank that venture.

“A lot of things that were precedent-setting exceptions when we got to Zambia in terms of investment terms and conditions are now standard practice and well established. It is a better investment environment than it was. A lot of the problems we had don’t exist today,” he said.

Zambian copper production is expected to grow to above 700,000 tonnes next year from more than 500,000 tonnes this year. More than $1bn has been spent on refurbishing and building new mines in Zambia over the past three years.

“It has enabled the government and politicians to get over all their hang ups about privatisation,” Menell said.

The Otjikoto gold project in Namibia will have a total financing requirement of around $50m, and Konkola North, where a defunct mine will be reopened and processing facilities establish, will need about $150m. There was no figure for Kalumines, but “that could be tens of millions more,” he said.

TEAL will spend $7m out of its $33m on a two-year feasibility study at Konkola North, which could produce up to 100,000 tonnes of copper a year from the underground mine operated by Anglo American in the 1950s. It has an identified resource of 14 billion pounds of copper.

TEAL is spending $4.5m at Kalumines where some 600 million pounds of copper have been identified, he said. “We think there is a lot more. We want to drill that and expand that to turn it into an open pit mine.”

Otjikoto has a resource of 870,000 ounces of gold and TEAL wants to grow that to two million ounces.
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“The first round of property acquisition in the DRC is finished. All the goodies have been taken. Now it’s the second round where the dealing begins with people who can’t follow through on big opportunities and they can’t build joint ventures,” he said.

JSE-listed African Rainbow Minerals (ARM) holds 65% of TEAL. Avmin's assets were incorporated into ARM last year.