This Management’s Discussion and Analysis (“MD&A”) of the results of operations and financial position for the three and 12 months ended June 30, 2007 for TEAL Exploration & Mining Incorporated (“TEAL” or the “Company”), dated August 28, 2007 should be read in conjunction with our audited, consolidated financial statements and notes thereto, which are expressed (unless otherwise specified) in United States dollars and prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”).
Mr. Claus Schlegel, Pr.Nat.Sci (No. 400149/90), the Company’s Vice President: Exploration and Business Development and a “qualified person” as defined by the Canadian National Instrument 43-101, has reviewed the technical material contained herein.
This MD&A contains certain forward-looking statements based on management’s current expectations. The forward-looking statements entail various risks and uncertainties which could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this MD&A.
Within this MD&A, references to “TEAL” or “the Company” mean the corporate entities and the business in respect of the mineral projects and other interests and assets acquired by TEAL from Limited (“ARM”) in 2005.
1.0 Overview
TEAL is incorporated under the laws of the Yukon Territory, Canada and its common shares are listed on the Toronto Stock Exchange (“TSX”) and the JSE Limited (“JSE”).The common shares of the Company trade under the symbol “TL” on the TSX and “TEL” on the JSE.
TEAL is a mineral development and exploration company with development projects and exploration areas in Namibia, Zambia and the Democratic Republic of Congo (“DRC”). TEAL has a portfolio of base and precious metal development projects and complementary exploration areas, and the Company continues to seek other opportunities, mainly in southern and central Africa.
TEAL has targeted specific projects: the Kasonta-Lupoto Mines s.p.r.l. (“Kalumines”) Copper-Cobalt Project in the DRC, the Konkola North Copper Project in Zambia; and the Otjikoto Gold Project in Namibia. TEAL also has interests in various other mineral licence areas in Zambia and in Namibia on which the Company continues drilling and other exploration activities.
As at end June 30, 2007, TEAL’s cash resources amounted to $5.9 million, and the Company also had access to an additional $10 million remaining from a one-year $20 million bridge loan facility entered into during the financial year with Standard Chartered Bank, which is being guaranteed by TEAL’s major shareholder, African Rainbow Minerals (ARM). Subsequent to yearend, ARM has agreed to increase the guarantee to $50 million, subject to South African Reserve Bank approval, which will ensure that TEAL has a facility in place beyond the end of the 2008 financial year or until long-term funding is arranged. TEAL is currently negotiating the terms, including an extension beyond the one-year time-frame, with Standard Chartered Bank. These funds will be directed towards work to support studies on the core projects: the Konkola North and Kalumines copper projects, as well as the Otjikoto Gold Project. Funding for the capital expenditure at Konkola North, Kalumines and Otjikoto will be pursued after the completion of the respective final feasibility studies.
TEAL’s chief financial officer, Hannes Otto Meyer (37), the Company’s chief operating officer, Mr. Arné Nicolaas Lewis (38), as well as ARM’s executive: business development, Africa, Mr. Daniel Simelane (45) have been appointed to the Board.
