2.0 Mineral Projects and Exploration Areas
Namibia – Gold Project and Exploration Area
Otjikoto Gold Project, Greater Otjikoto Project Area and Otavi Exploration Area – TEAL 100%
KEY FEATURES
Project description: The Otjikoto Gold Project (Otjikoto) is situated within the Otavi Exploration Area, which totals 3,800km2 in north-central Namibia, where the company discovered vein-hosted gold mineralization. The gold occurs as ‘free’and often coarse gold within predominantly pyrrhotite-magnetite-pyrite veins. TEAL is conducting an exploration program over a portion of the property to expand and upgrade the current resource base through further drilling and a pre-feasibility study assessment of the deposit is also underway.
Resources: TEAL’s resource estimation work at Otjikoto has resulted in an inferred mineral resource of approximately 1,760,000oz of gold defined to date. The Company believes the resource is open-ended and has potential for the delineation of further resources. TEAL has conducted airborne geophysics and geological compilation over the entire Otavi Exploration Area and has identified targets, several of which are high priority and in close proximity to the known deposit.
Ownership level: TEAL owns 100% of Avdale Namibia (Pty) Limited,the company which holds Otjikoto. A partnership is being negotiated with the EVI consortium to acquire a 10% interest.
Accessibility and infrastructure: The project is located between the towns of Otjiwarongo and Otavi, approximately 300km north of Windhoek,the capital of Namibia.The Otavi area is situated between the Kombat Copper Mine and the Okoruso Fluorspar Mine. The Tsumeb copper smelter facility is located some 110km to the northeast of the project. The project is located close to well-developed infrastructure of road, rail, electrical power, and communications.
Table 1:
| Tonnes | Au g/t | Moz | |
|---|---|---|---|
| Oxide | |||
| Upper Zone | 948,267 | 1.382 | 0.042 |
| Lower Zone | 1,778,638 | 1.274 | 0.073 |
| Bottom Zone | 8,594 | 0.933 | 0.0003 |
| Total | 2,735,499 | 1.310 | 0.115 |
| Sulphide | |||
| Upper Zone | 7,659,720 | 1.644 | 0.405 |
| Lower Zone | 23,854,000 | 1.139 | 0.874 |
| Bottom Zone | 9,729,625 | 1.177 | 0.368 |
| Total | 41,243,345 | 1.242 | 1.647 |
| Total Oxide | |||
| and Sulphide | 43,978,844 | 1.246 | 1.762 |
TEAL recently completed geological modeling and geostatistical evaluation from its ongoing phase of drilling of the Otjikoto deposit. Results of the resource estimation provide approximately 2.7Mt of oxide material with a grade of 1.31g/t gold and 41Mt of sulphide material with a grade of 1.25g/t gold. The current total combined inferred resource estimate is approximately 44Mt at 1.246g/t, providing 1.76Moz of gold. Results from boreholes TC23,TC40 and OT152 have confirmed, and extended, higher grade zones of mineralization. TC23 returned 18.90m grading 3.05g/t gold,
TC40 is 16.20m grading 9.54g/t gold, and OT152 returned 13.50m at 6.89g/t gold.
This estimation represents an increase of 460,000 ounces, or 35%, from the previous estimate of 1.30Moz which was audited and supported by SRK Consulting in February, 2007. The additional ounces have resulted from the intersection of extensions to the mineralization to the eastern and southern areas of the deposit. Further resource expansion has been related to the identification and modeling of extensions to the “Bottom Veins” unit. Table 1 indicates the current Inferred resource estimate.
Figure 4 illustrates the current outline of the mineralized zones in a plan view.
One drill rig is continuing with resource expansion drilling, while two rigs are active within the infill drilling area and the high grade delineation area. TEAL anticipates combining this increase in the inferred resource base with the building of an inventory of indicated resources, following a second phase of planned infill drilling. A total of 3,478 borehole samples were submitted for analyses and results have been received for 2,844 samples.
High Grade Infill and Expansion Drilling
Table 2 indicates the results of boreholes TC23, TC40 and OT152.
Figure 4 illustrates the location of boreholes within the infill and resource expansion areas of the deposit. Boreholes TC23 and TC40 confirm the identification of higher grade zones of gold mineralization within the relatively shallow area of the deposit. On completion of the infill drilling program, an improved understanding and geological modeling of these higher grade zones of gold mineralization will be possible. The subsequent geometry of, and grade distribution within, the high grade zones could have a positive impact on the economic evaluation of the project. Exploration drilling is also being undertaken to the east of the current resource outline to test the tenor and continuity of an eastern ‘shoot’ of the mineralization that is not included in the resource estimation.
Borehole OT152 (see table 2) indicates the extension of previously intersected zones of higher grade gold mineralization in the southwestern extensions to the current resource. Figure 4 shows the location of OT152 within the area of the higher gold grade delineation drilling. This borehole is located some 900m from the edge of the phase 1 infill drilling program. The intersection represents the down plunge continuation of high grade zones of gold mineralization previously reported.
Table 2: Recent borehole results (infill & expansion drilling areas)
| Location | Borehole | Depth from (m) | Depth to (m) | Corrected width (m) | Gold g/t |
|---|---|---|---|---|---|
| 7350N/4850E | TC23* | 112 | 133 | 18.90 | 3.05 |
| Including | 112 | 120 | 7.20 | 5.55 | |
| 6850N/4750E | TC40* | 68 | 86 | 16.20 | 9.54 |
| Including | 75 | 86 | 9.90 | 15.28 | |
| 6400N/4950E | OT152+ | 174 | 189 | 13.50 | 6.89 |
| Including | 176 | 183 | 6.30 | 13.81 |
Infill Drilling Area (Phase 1)
Phase 1 infill drilling at 50 x 25m centres is being undertaken on a portion of the shallow resources of both the upper and lower orebody, containing approximately 8Mt of the total inferred mineral resource. Detailed drilling is being conducted in this region as it would be the area where open-pit mining could start. Detailed geostatistical assessments, of the currently available phase 1 results, are in progress. The conclusion to these assessments will determine the borehole spacing and/or other parameters required to achieve indicated mineral resources within the phase 1 infill area. Importantly, the phase 1 infill drilling results have confirmed the continuity of the vein system and the position of the major geological units. Conceptual open-pit designs are being prepared based on the current resource estimate that will define priority areas for a further phase of drilling.
Within the Otavi area, the final geological interpretation of the second SPECTREM AEM™ survey, which was conducted in early 2007, has been received. Targets for ground follow-up have been prioritized, and field inspection has also commenced on these priority targets.
TEAL is currently conducting a pre-feasibility study on the Otjikoto Gold Project, and the current status of the study is summarized as follows:
- Metallurgical: TEAL has completed 780m of diamond drilling for additional metallurgical test work samples. The location of these boreholes has been selected in an attempt to provide material representative of grade ranges and mineralogical associations. The primary focus of the test work, being undertaken by Mintek of South Africa, is to establish the optimum route for the pre-milling concentration of the gold mineralization.
- Geotechnical: South African company, SRK Consulting, has been contracted to conduct an assessment of the geotechnical aspects of the deposit, which work is expanding upon a previous study completed in 2003.
- Geohydrology: South African company, AGES, has been engaged to carry out ground water investigations and modeling.
- Mining and Engineering Assessment: Ukwazi from South Africa has been appointed to carry out mining cost estimates, open pit design, pit optimization, production scheduling and related engineering and infrastructure studies.
- Mine Residue Disposal: Geotail of South Africa has been appointed to assess the mine residue disposal options, including the waste rock stockpile as well as the tailings facility.
- Environment and Social: A Namibian based consultant, A. Speiser Environmental Consultants, is providing the Environmental Impact Assessment, including a social impact study.
- Project Co-ordination: GRD Minproc from South Africa is project managing the pre-feasibility study, including process route optimization, as well as capital and operating cost estimation.
TEAL anticipates the completion of the pre-feasibility study next calendar year and, following a positive conclusion, it will be followed with the immediate initiation of a bankable feasibility study with the goal of fast tracking Otjikoto to a mine development decision.
