Tenke signs deal with Zairian rebels

Despite the recent political upheaval in the former Zaire, Tenke Mining (TNK-T) has secured its rights to one of the largest, undeveloped copper deposits in the Central African nation.

The company recently agreed to proceed with a US$50-Million payment for the Tenke Fungurume project and, as a result, the rebel alliance headed by new President Laurent Kabila paved the way for Tenke to proceed with development of its huge copper-Cobalt deposit.

Under the signed agreement the Alliance of Democratic Forces for the Liberation of Congo-Zaire has agreed to respect the terms of Tenke’s existing joint venture on the 1,437-sq. km Tenke-Fungurume concessions.

The US$50 million is the first installment of a US$250-Million joint-Venture agreement Tenke signed in November with state-owned La Gnrale des Carrires et des Mines, or Gecamines.

Now under rebel control, Gecamines is being run out of the Alliance stronghold of Lubumbashi. New management has taken over from previous managers considered to be too close to President Mobutu Sese Seko.

The second instalment will consist of US$40 million and is due 130 days after completion of a feasibility study. The third, in the amount of US$160 million, is due May 7, 2003.

The Vancouver-based company holds a 55% interest in the Tenke-Fungurume concessions, which are situated in the country’s southeastern highlands.

“As far as the Alliance is concerned, they’ve given us nothing but support,” says Edward Webb, president of Tenke. “We’re [proceeding at] full throttle.

We have two rigs working on the property, two more coming in and 25 experts doing geological work.”

Drilling along the Dipeta syncline of the Tenke and Fungurume concessions began at the end of April and, over the next nine months, will test 20,000 metres. Another 20,000 to 30,000 metres of exploration and infill drilling will be conducted near the deposit. Trenching is also planned.

Six bridges and 110 km of access roads have been built to date, and core cutting and logging facilities are nearing completion. Construction of the on-site assay lab will be complete before the end of May. Tenke has contracted Socit Gnrale de Surveillance, an independent lab with offices in Switzerland, to conduct additional assaying.

Tenke is four months into a 2-year, US$15-Million feasibility study, and the company says operations on site have proceeded “without delay.” The study envisages a $350-Million operation with an annual production of 80,000 tonnes copper.

The Tenke and Fungurume concessions contain resources totalling 222 million tonnes grading 4.42% copper and 0.33% cobalt, using a cutoff grade of 1% copper-equivalent. That calculation includes proven minable reserves of 92.6 million tonnes grading 4.59% copper and 0.36% cobalt.

Current drilling is expected to boost the resource.