Teal updates Konkola resources (April 30, 2007)

Teal Exploration & Mining (TL-T, TEL-J) has published updated resource figures for the Konkola North copper project, in northern Zambia, moving about half the previously inferred resource into the indicated category.

The new resource is being incorporated into an ongoing feasibility study, scheduled to come out near mid-year.

The property’s South Limb deposit is now estimated to have 11.3 million tonnes grading 2.35% copper, plus an inferred 30.6 million tonnes at 1.6%. A previous estimate, made in 2005 for Teal’s listing in Toronto, had given it an inferred resource of 49.4 million tonnes grading 1.92% copper.

The East Limb deposit has a measured and indicated resource of 13.6 million tonnes with a grade of 2.37% copper, plus 17.2 million inferred tonnes at 2.65%. The earlier resource showed 29.4 million tonnes at 2.52% copper.

The resource figures, estimated by consulting firm Mining Consulting Services, used the same blocks as the 2005 estimate, remodelled using geostatistics. Ongoing drilling may change those blocks, at which time Mining Consulting will update the resource estimates again.

The two deposits are immediately north of the Konkola copper mine, held by Vedanta Resources (VED-L, VDNRF-O) and ZCCM Investments Holdings (ZCC-L). Konkola and its satellite operations produced 37,000 tonnes copper in the 12 months ended March 31.

Under Teal’s acquisition agreement, which gives it a mining licence for the 44-sq.-km Konkola North land package, ZCCM holds a right to buy into Konkola North for a 15% working interest and a 5% carried interest.

Drilling is now scheduled to start on two other resource areas, Area A and Area A Extension, where inferred resources have been calculated. At Area A, there are 107 million tonnes grading 2.3% copper, and in the Extension, a further 63 million tonnes at 3.88% copper.

The feasibility study on resuming production from Konkola North continues, mainly concentrating on geotechnical and hydrogeological work. Teal now has full access to underground workings on the South Limb through a 1950s-era shaft to 423 metres vertical depth, and the workings are dewatered.

Tailings and waste-rock storage have already been designed, and an environmental impact study is complete. A 50-tonne bulk sample taken late in 2006 is currently the subject of metallurgical tests.

Currently under study is a plan to mine from the South Limb using the existing workings and to have the ore custom-milled. The results of that economic study are being reviewed.

The deposit, about 75 km north of Kitwe in the Copperbelt, consists of copper oxides and sulphides in the Ore Shale unit, which hosts most of the copper deposits on the Zambian side of the border. Most of the copper in the South Limb deposit is held in chalcopyrite, and most in the East Limb deposit in chalcocite. About 90% of the copper was leachable in metallugrical tests, and bio-leaching has shown some promise to increase that.