Patrice Motsepe
| “The company is also
fortunate to have solid
partnerships in our host
countries, and the progress
we have made during the
year is a credit also to these
partners in our projects” |
Dear Shareholders
This has been another year of substantial progress at TEAL as the company transforms from an exploration entity to an operational company with attractive opportunities in copper, cobalt and gold in highly prospective countries in Sub-Saharan Africa. The progress the Company has made during the year has been steady and I am comfortable that TEAL’s management has moved rapidly to take advantage of the sustained market for our commodities. Of particular importance during the last year, was:
- the start of a phase 1 copper mining operation at Kalumines in the DRC;
- the commissioning, which is underway, of the furnace at TEAL Metals in the DRC;
- the completion of the technical aspects of feasibility studies into mining operations at the Konkola North Copper Project and the Mwambashi Copper Project in Zambia; and
- a doubling of the inferred gold resource to 1.76 million ounces (Moz) at the Otjikoto Gold Project in Namibia.
In any environment, developing and building mines can be a challenging business, requiring long-term commitment, foresight and, most of all, resources. In the current commodities rush, physical resources (from steel and cement, to drill rigs) along with human resources, are in short supply. TEAL’s critical mass, well established base and reputation all play an important part in attracting and retaining these scarce resources.
The Company is also fortunate to have solid partnerships in our host countries, and the progress we have made during the year is a credit also to these partners in our projects.
In the DRC, the state-owned mining company La Société Générale des Carrières et des Mines (Gécamines), holds a 40% stake in the Kalumines Copper-Cobalt Project, which has been the subject of a significant amount of work in the past year. We have received excellent co-operation from the regulators in the DRC and the release of the phase 1 operation is a prelude to a larger and very exciting mining operation.
In Namibia, the relationship with government and local authorities has been invaluable as we continue to promote development in the country and to ensure long-term common interest with the communities where we operate. Another initiative is a partnership we are forming with a broad-based group of Namibians, including the Namibian Mineworkers Union. This group has formed EVI Mining Company Limited (the “EVI consortium”) to acquire a 10% interest, and an option on a further 5%, in TEAL’s company that holds the Otjikoto gold prospect.
At Konkola North, we have enjoyed an excellent relationship with ZCCM Investment Holdings plc, a company controlled by the Zambian government, which retains an option of acquiring a stake of up to 20% in the project. We hope to sign off on the results of a bankable feasibility study in the near future and bring this operation into production as rapidly as possible.
I am also pleased to report that, through substantial dialogue with investors, there is a greater understanding of our ability to fast-track our substantial asset base into production, through our competitive advantage of having unique African credentials.
| “...through substantial
dialogue with investors, there
is a greater understanding of
our ability to fast-track our
substantial asset base into
production...” |
Following the free and fair elections in the DRC in the previous year, we have been encouraged by the political settlement reached at the time, and the continuing improvement of the socio-political and business environment in that country. We look forward to maximizing our growth in the future as we develop our exciting assets in the DRC.
Although new legislation being implemented in Zambia, in terms of royalties, taxes and social obligations, may represent a potential impact on financial returns as we build large new mines in that country, the strength of our partnerships provides us with a significant level of comfort in the changing legislative environment. The pragmatic approach from government, balancing the need for long-term capital investment with the potential gains from the development of new mines, is to be commended. Furthermore, with the experience gained in the transformed South African environment, we are well placed to assist and benefit from the new Zambian regulatory position.
As the feasibility studies at our various projects are completed, and we reach the stage where decisions need to be taken on a number of attractive new mining projects, together with the associated additional capital required to turn these orebodies to account, I remain satisfied that the team at TEAL is looking at all the best options for debt and equity raising.
In conclusion, I must thank the team at TEAL, which has displayed passion and flair in developing our significant portfolio of quality assets. Also to my fellow board members and shareholders, your support in these exciting stages of building a new mining company, has been invaluable.
Patrice Motsepe
Chairman
September 12, 2007
