Namibia -
gold project & exploration areas

Otjikoto Gold Project and Otavi Exploration Area
     – TEAL 100%

Overview

The Otjikoto Gold Project is situated within TEAL"s 100% owned Otavi Exploration Area, which totals 3,084 square kilometres in north-central Namibia, where the Company recently discovered vein-hosted gold mineralization. TEAL has undertaken resource estimation work at the Otjikoto Gold Project and an inferred mineral resource of approximately 870,000 ounces of gold has been 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 Otjikoto Gold Project and has identified targets, several of which are high priority and in close proximity to the known deposit. TEAL plans to expand and upgrade the current resource base through further drilling and expects to undertake a feasibility study of the Otjikoto Gold Project within 36 months. The project is located close to a developed system of road, rail, electrical power, ground water and communications.

References in this prospectus to the Otavi area mean, collectively, the Otjikoto Gold Project and the Otavi Exploration Area.

Property Description, Location and Ownership

The Otavi area consists of four exclusive prospecting licences held by TEAL"s wholly-owned subsidiary, Avdale, that cover a surface area of approximately 3,084 square kilometres in the north-central part of Namibia. The project is located between the towns of Otjiwarongo and Otavi, approximately 300 kilometres due north of Windhoek, the capital of Namibia, which can be reached by direct commercial air travel from several countries. The Otavi area is situated between the Kombat Copper Mine and the Okorusu Fluorspar Mine. The Tsumeb copper smelter facility is located some 110 kilometres to the northeast of the project.

Exclusive prospecting licences are issued by the Namibian Ministry of Mines and Energy for an initial term of three years, and provide for the exclusive right to explore for base, precious and rare metals, as well as precious stones. The licences may be renewed twice, each for an additional two year term, and confer upon the holder the right to apply for a mining licence.

Information in respect of the Company"s Otavi area licences is as follows:

Licence Number	Area km2	Date of Original Grant	Date of Last Renewal	Expiry Date of Current Licence
2409	654	30/07/1997	31/07/2004	30/07/2006
2410	906	15/09/1997	15/09/2004	14/09/2006
2417	566	15/09/1997	15/09/2004	14/09/2006
3177	959	24/06/2004	N/A	23/06/2007

The annual fees to maintain the Company"s exclusive prospecting licences in good standing are N$6,000 (Licence No. 2417), N$7,000 (Licence No. 2409) and N$10,000 (Licence Nos. 2410 and 3177).

Renewals of exclusive prospecting licences in Namibia beyond seven years from the date of the original grant require the approval of the Namibian Minister of Mines and Energy. Approval of the Minister has been given in respect of Licence Nos. 2409, 2410 and 2417, which reflect the Company"s progress to date. Licence No. 3177 was applied for in direct response to the exploration results obtained at Otjikoto, and represents a further 70 kilometre strike of the targeted host lithotypes as those containing the Otjikoto Gold Project.

The Namibian Mining Act requires that an access compensation agreement be entered into with the surface rights owners when physical access to individual farms is required for exploration activities. Such agreements are regularly formulated when access to specific properties is required. The surface rights to the Otjikoto Gold Project are held by a local farmer. An access compensation agreement has been entered into with the landowner pursuant to which, in consideration of a monthly payment of N$14,300, the Company has unrestricted access to conduct exploration and feasibility studies with respect to the Otjikoto Gold Project. The Company will negotiate and enter into additional access compensation agreements, if necessary, to gain access to other surface rights in the Otjikoto Exploration Area. Should any negotiations with a specific surface rights holder fail, the Namibian Mining Act permits a mineral rights holder to seek arbitration to settle the terms of access and usage of the surface rights. By law, arbitrators may not consider the underlying value of any minerals in establishing the value of surface access and usage rights.

No permits are needed to conduct TEAL"s current work plan. All required environmental reporting procedures are in place and updated on a bi-annual basis. The Company is not aware of any environmental liabilities existing within the boundaries of the Company"s four licences.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Otjikoto Gold Project and the Otavi Exploration Area can be reached directly by a national road, the B1, which is a paved road in good condition and connects to Windhoek. The main national rail line, which runs to the north of the country, also intersects the Otavi area. This road and rail network acts as a good link from the Otavi area to the deep-water port facility at Walvis Bay.

The town of Otjiwarongo has a population of approximately 30,000 and possesses most modern amenities expected of a regional town serving a large agricultural community, including medical, dental, school and other services. Cellular and modern fixed line telecommunications are readily available in both Otjiwarongo and the town of Otavi. The cellular network coverage extends on to the Otavi area.

Tsumeb, a mining and processing centre, is located along the B1 highway approximately 60 kilometres to the northeast of Otavi. Tsumeb has a regional airport with scheduled and chartered flights to Windhoek. Namibia has a long history of mining and as such the Company anticipates that skilled labour will be available.

Namibia is an arid or semi-arid region. The climate of the Otavi area is considered semi-arid. As a result, the secondary roads within the Otavi area are generally accessible year-round and TEAL has conducted full field operations at all times of the year. Most of the country is located on a high plateau and the Otavi area lies within the eastern part of the Central Western Plains situated 1,500 metres above sea level.

In the event of any mining operations being initiated at the Otjikoto Gold Project or elsewhere in the Otavi area, water could be purchased from Namwater, a public utility, at commercial rates. Namwater would have to extend pipelines from current ground water resources or construct additional ground water extraction borehole sites. Depending on extraction rates or the aquifer used, the Company may need to obtain water permits from Namwater for water usage. Three main aquifers, one of which extends into the Otavi area, supply Namwater with water for public usage and distribution. TEAL has completed a preliminary ground water study and concluded that a minimum of 80,000 cubic metres of water per month would be extractable from the known aquifer closest to the Otjikoto Gold Project, an extraction rate that the Company believes will fall within the normal water re-charge of the aquifer and which should satisfy approximately 80% of the anticipated requirements for a mining and processing operation at the Otjikoto Gold Project. At present, the Company obtains sufficient water supplies for exploration operations from farm water boreholes.

Power is supplied in Namibia by Nampower, a public utility. Nampower is expected to complete within the next two years a plan to supply power throughout the entire Otavi area. It is anticipated that any mining and metallurgical plant operations for the Otjikoto Gold Project would require 6,000 Kva power, which is readily provided from the Maxwell substation located approximately 16 kilometres to the northwest of the project.

The vegetation found on the Otavi area mainly comprises Black Thorn and Bastard Umbrella Thorn. Marble outcrops generally form topographical highs and shallow northeast and east-west elongated, valley-like features extend for kilometres throughout the Otavi area. The thin, but extensive calcrete cover and schistose aquitard bedrock formations provide many suitable areas for the construction of mining infrastructure, tailings dams and heap leach pads.

History

Little historical exploration work was conducted within the Otavi area prior to 1997 when TEAL first acquired certain of its current licences in the region. Of the 3,084 square kilometres that currently comprise the Otavi area, only approximately 750 square kilometres, primarily located in the northern most area of the project, formed part of prior exclusive prospecting licences or other exploration rights.

Each of Kennecott Exploration SWA (Pty) Ltd., Falconbridge of SWA (Pty) Ltd., Tsumeb Corporation (Pty) Ltd. (now called Ongopolo Mining and Processing (Pty) Ltd.), Anglo American Corporation of South Africa Ltd. ("Anglo American") and Goldfields Prospecting Corporation (Pty) Ltd. performed a variety of exploration activities during the period from the mid-1960s to the mid-1980s, including mapping and drilling, all with limited success. All previous work was related to base metal exploration activities. There is no recorded history of prior gold focused exploration activity within or adjacent to the Otavi area.

No knowledge or information exists as to any historic mineral resources or mineral reserves estimated for any mineral occurrences on the Otavi area. In addition, no information with respect to any significant commercial mineral exploitation exists. Limited small-scale amethyst mining has taken place within certain of the Company"s licence areas but not in the area of the Otjikoto Gold Project.

TEAL established an office in Namibia in 1992 and undertook base metal exploration programs in different parts of the country. Target generation work in the covered terrains of the Otavi region resulted in the Company making applications in 1997 for certain of the licences it currently holds.

Geological Setting

Regional Geology

The Otavi area is set within the northeast-trending, intracratonic arm of the Damara Orogen. The project area is believed to traverse the Northern Central Zone and the Northern Zone of the Damaran tectonostratigraphic zones. The edge of the Northern Platform (also referred to as the "Otavi Platform") is to the north of the project in the vicinity of the Kombat Copper Mine.

In this part of the orogen, fluvial sedimentation was initiated in intracontinental rift basins at about a billion years ago to form the Nosib Group. Subsequently, rifting gradually evolved into spreading and deepening of the basin southwards about 700 million years ago. Argillites and carbonate sediments were deposited in grabens south of the northern platform to form the Swakop Group. In the project area, the rocks are correlated with the North and North-Central Zone of the Damara Orogen. The Northern Platform remained an extremely stable carbonate shelf, forming the Otavi Group.

Damaran orogenic activity resulted from a reversal of spreading and the initiation of subduction of the Kalahari Craton below the Congo Craton. Episodes of granitoid intrusion, metamorphism and tectonic activity took place over an extended period from about 650 to 460 million years ago. Along the southern edge of the Northern Platform the Askevold Formation is developed at the top of the Nosib Group. This formation consists of phyllites, intermediate agglomerate, tuff and epidosite (possibly edipotised lava or andesite).

The "platform facies" consist of dolomite and limestone with subordinate shale, arkose and greywacke (Abenab Subgroup); mixtite, with a variety of other rock types, such as quartz-mica schist, quartzite, conglomerate, dolomite, iron-formation and calc-silicate rocks (Chuos Formation); dolomite and limestone, intraformation breccias or conglomerates (remainder of Tsumeb Subgroup). The Mulden Group unconformably overlies the uppermost part of the Tsumeb Subgroup. Isolated lenses of arkose may occupy palaeokarst features at the unconformable contact between the Mulden Group and the Huttenberg Formation. The "basin facies" of the region consist of the Okonguarri (schists and carbonates), Ghaub (diamictite), Karibib (marble and dolomite) and Kuiseb (schists and calcareous siltstones) Formations. Intrusions into the Damara Sequence in the Otjiwarongo-Otavi region are syntectonic and post-tectonic granites.

Local and Property Geology

Due to the lack of bed rock outcrop within the Otavi area, the current geological understanding of the area has been achieved by the GIS compilation of photogeological studies, outcrop mapping (where possible), geophysical interpretations and borehole data. Most of the drilling information to date has been related to the resource estimation of the Otjikoto Gold Project and, as a result, the geological understanding of this specific area is more advanced.

The Karibib Marble unit represents a useful marker horizon and, to a large extent, represents the only outcrop in the region. The package of meta-sediments hosting the mineralization of the Otjikoto Gold Project includes biotite schists, albitites and marbles that are correlated with the Okonguarri, Oberwasser and Okawayo Formations, respectively. The Karibib Marble is folded in an open, synformal structure immediately to the east of the deposit. Kuiseb Formation calcareous siltstones occupy the core of the main synforms in the area.

The Otjikoto Gold Project is hosted within extensively albitised schist of the basal Oberwasser and Okawayo Formations. There are broad similarities between the tectonic style of the Central Zone and that interpreted within the project area. Investigations suggest that late Damaran (D3/D4) deformation events played a critical role in focusing mineralizing fluids at the Otjikoto Gold Project.

Due to extensive areas covered by calcrete units, the geology hosting the Otjikoto Gold Project mineralization was unknown and unexplored prior to TEAL"s work in the area.

Exploration

To date, the Company has conducted resource estimation at the Otjikoto Gold Project and reconnaissance mineral exploration work throughout the Otavi area. This work has relied mainly on airborne and ground geophysical surveys to target drilling as the bedrock geology of the area is largely covered by thin calcrete units. Prior to 2004, the Company"s regional exploration work plans and budgets were designed to focus on base metal exploration.

In 1997, TEAL commissioned airborne magnetic surveys and a magnetic anomaly centred on the farm Otjikoto 573 was identified. Extensive follow-up exploration and drilling of this magnetic anomaly led to the discovery of vein hosted gold mineralization. Following this discovery, much of the work completed by the Company has been related to the resource estimation of the Otjikoto Gold Project located wholly within Licence No. 2410. The area shown as the "Otjikoto Gold Project" in Figure 6 is an area of approximately 0.78 square kilometres.

Since 1998, TEAL has conducted airborne geophysics as well as field and photo-geological surveys of the Otavi area. Data obtained from these activities has been used by the Company to produce both direct exploration targets and stratigraphic and structural interpretations. Results from exploration activities have led to subsequent ground relinquishments which have reduced TEAL"s licence holdings from over 10,000 square kilometres to its current holding of approximately 3,084 square kilometres.

In 2003, TEAL completed a diamond and reverse circulation resource estimation drilling program in excess of 15,000 metres that resulted in the delineation of the inferred gold resource at the Otjikoto Gold Project.

A high-resolution AEM and magnetic (SPECTREM AEM) survey was completed during February 2005 by Spectrem Air Ltd. ("Spectrem") over prospective host stratigraphy and structurally favourable settings. The survey tested a total of 75 kilometres of strike in Licence Nos. 2409, 2410 and 2417. This survey covered the Otjikoto Gold Project and should assist with further exploration in the vicinity of the project. A team of geoscientists are interpreting data from this survey in order to identify high priority areas for ground follow-up exploration activities.

The Otjikoto Gold Project possesses a clear magnetic and electro-magnetic signature from both airborne and ground data. The application of SPECTREM AEM to the exploration of the project is enhanced by the absence of significantly conductive overburden and saline ground water. Initial results of this SPECTREM AEM survey have been received and a number of prominent magnetic and electromagnetic exploration targets have been identified from the geophysical interpretation. TEAL"s exploration geologists and geophysical consultants will further characterize and prioritize these targets after placing them into geological context.

Figure 7 illustrates the results of a detailed ground magnetic survey undertaken over the known zone of mineralization on the Otjikoto Gold Project and a further 1,000 metres to the east. Target 1 is the area of the down-dip extension of the known mineralization. The survey has identified a second magnetic anomaly of similar character to that associated with the currently known mineralization at the Otjikoto Gold Project. This second magnetic anomaly, which may represent a parallel structure to the Otjikoto Gold Project mineralization, is comprised of two distinct domains (Targets 2 and 3). These magnetic anomalies, none of which have been drill tested, will be further assessed using the recently completed high resolution SPECTREM AEM survey data. This should result in the further definition of existing targets and generate additional high priority exploration targets for drill testing in close proximity to the known mineral resource.

The exploration work on the Otavi area is managed by TEAL geologists from an office in Windhoek. A project exploration office with supporting infrastructure has been set up in Otjiwarongo. TEAL has employed the following contractors in conducting its exploration work on the Otavi area:

ALS Chemex and Anglo American Research Laboratories Ltd. ("Anglo American Research") for assaying samples taken during initial regional exploration.

• SGS Lakefield Research (Pty) Ltd. (Johannesburg) ("SGS Lakefield"), Moruo Analytical Services Ltd. (Johannesburg) and Genalysis Laboratory Services Pty Ltd. (Perth) for assaying samples taken during advanced exploration and the resource estimation.
• Anglo American Research and SGS Lakefield for bulk density determinations using a pycnometer.
• Drillcon Africa (Pty) Ltd for percussion and RC drilling services.
• Afridrill (Pty) Ltd and Drillcon (Pty) Ltd for diamond drilling services.
• Badger Mining & Consulting (Pty) Limited for metallurgical test work, metallurgical studies and mine design investigations.
• Geodass Exploration Geophysical Services (Pty) Ltd, Fugro Airborne Surveys (Pty) Ltd, and Spectrem for various airborne magnetic, electromagnetic and radiometric surveys.

The above-mentioned service providers are well known throughout the southern African minerals business. TEAL implements numerous quality control and quality assurance programs in respect of all service providers.

Deposit Type and Mineralization

The Otjikoto Gold Project exhibits characteristics indicative of epigenetic gold mineralization, metamorphogenic mineralizing fluids, and skarn-type alteration mineral assemblages. The Otjikoto Gold Project does not precisely fit into any one of the pre-defined mineralization styles. RSG believes, however, that the best comparison is the Navachab Gold Mine, owned by Anglogold Ashanti Limited, which has similar mineralization and grade, and is located in Namibia, 260 kilometres southwest of the Otavi area. Since its refocused exploration program commenced in 2000, Navachab has developed into a deposit with 5.2 million ounces of gold in resource. (Mineral resources calculated in accordance with the SAMREC and JORC codes as at end 2004 are as follows: Measured – 9.2Mt @ 0.73 g/t gold; Indicated – 63Mt @ 1.3 g/t gold; Inferred – 65.6 Mt @ 1.13 g/t gold. Source: www.anglogold.co.za.). The mineralized vein system at Navachab has lateral dimensions of at least 2 kilometres by approximately 900 metres and mineralization is known to extend to 730 metres below surface.

Initial investigations of mineralization found in drill core at the Otjikoto Gold Project suggests similarities with the generally accepted Navachab style of mineralization. There is a spatial correlation between gold, pyrrhotite and magnetite at the Otjikoto Gold Project.

The gold mineralization is hosted by a series of thin (less than 10 centimetres) sheeted veins that lie essentially parallel to the NE-striking (locally 035°) foliation of the schists and granofels (metamarls) of the basal Oberwasser Formation. Specifically, the veins lie parallel to an S0/S1 transposition foliation. In the Otjikoto area, the shallow-dipping (~25°) Oberwasser Formation attains a thickness of approximately 1,000 metres and is overlain to the southeast by the calcareous marbles and calc-silicate rocks of the Karibib Formation, the most reliable (and best exposed) marker in the area. The calc-silicate fels immediately underlying the Karibib Formation marbles also host bedding-parallel auriferous quartz + pyrrhotite + pyrite + magnetite + carbonate veins.

The lithotypes at the Otjikoto Gold Project have been divided into three lithostratigraphic units: from bottom to top the OT"A" Zone (fels), the OT"B" marble and the OT"C" Zone (albitite-hornfels). Figure 8 shows a schematic view of a NW-SE oriented cross section through the mineralization at the Otjikoto Gold Project.

The OT'C' Zone hosts the mineralized vein system and is underlain by the 6 to 10 metres thick unmineralized OT"B" calcareous marble. Underlying the OT"B" marble is the albitised OT"A" Zone (fels) (approximately 30 metres thick), which hosts minor bedding-parallel veins with irregularly distributed gold values. At the base of the OT"A" Zone is the Footwall Marble (approximately 20 metres thick). The OT"A" Zone and the OT"B" marble are part of the Okawayo Formation, which is an important host to tungsten skarns in the Omaruru District and gold skarns in the Karibib District.

Drilling

TEAL has completed percussion, reverse circulation and diamond drilling on targets within the Otavi area. All field percussion and core drilling operations and sampling followed the Company"s standard procedures. Percussion drilling was used to recover geochemical samples below the calcrete cover and allowed for geological and regolith assessment. Reverse circular drilling was used to test exploration targets as part of the advanced exploration and evaluation of the Otjikoto Gold Project. Diamond drilling was used to test both regional exploration targets and to provide detailed information on the vein mineralogy and geometry within the resource estimation at the Otjikoto Gold Project.

Sampling and Analysis

Percussion Sampling and Analysis

Percussion drilling is used for regional geochemical sampling, employing short holes to penetrate surface cover. Samples are collected as 2 metre composites through a cyclone with a continuous splitter. Each 2 metre sample approximates 40 to 50kg from which a representative 4kg is split into quarters. A 3kg sample is retained and stored as a reference sample. The remaining 1kg sample is split 200g to 400g sub-samples, which are dispatched for analysis. All samples are analyzed by ALS Chemex laboratory in Canada for gold by fire assay and for 31 other elements by the ICP method.

Where possible, percentage estimates are made of the regolith, bedrock, and any sulphides or oxides observed within the drill chips. This provides continuous geological control and holes are stopped when bedrock saprolite or weathered bedrock is intersected. In general, the deepest two to three samples (4 to 6 metres) of each hole are sampled for analysis.

Reverse Circulation Sampling and Analysis

Each 1 metre intersection sample is weighed before splitting on site, allowing for immediate monitoring of sample recovery while drilling. Should sample recoveries fall below approximately 85%, drilling is suspended and equipment checked. Each 1 metre sample is riffle split once, then recombined and riffle split twice in sequence to homogenize the material and create four sub-samples. All rifflers are cleaned after splitting of each 1 metre sample. The four resulting sub-samples are then processed to provide material for geological logging, primary assay sample and full field duplicate sampling. Provision is also made to retain a reference sample for project audits and material for metallurgical test work.

Core Sampling and Analysis

Core is oriented and a low point-line placed on the core at the maximum dip of the prevalent dip of the fabric. A second reference line is also placed down the entire length of the core to ensure that a standard half (the top half) of the core is always sampled. Metre depth marks are placed on the core and any core losses are corrected as appropriate. The core is then geologically logged. The orientated core is split in half along the low point line with core cutting saws. Depths are then marked with a permanent-marking pen and samples are taken on a consecutive metre basis and labelled with the "depth to" metre number.

Sample Quality and Density

On the Otjikoto Gold Project, resource evaluation drilling has been carried out resulting in 93 vertical holes and 14 angled holes that intersect the shallow dipping (25°) sheeted vein array at representative core angles. Due to the coarse particulate nature of the gold mineralization, the evaluation program used large sample masses in sample preparation for assays.

In addition, a screen fire assay method was employed to all the advanced exploration and evaluation sample assays. An orientation study on material from the Otjikoto Gold Project was initially carried out to test the suitability of this assay method. Best practice international standards also indicated that this method provides an appropriate technique to produce representative gold determinations where significant coarse particulate gold occurs.

The three laboratories used for gold assay determination gave comparable results with a similar slope and R2 value for the trend line of the same size fraction. The coarse size fraction analysis indicated inferior repeatability for duplicate samples. This is due to the coarse particulate nature of the gold and not due to poor analyses by the laboratories. The absence of standard material to monitor instrumental drift is the only significant deviation from a proper quality control regime. The three laboratories used were SGS Lakefield Research Africa (Pty) Ltd. and Morno Analytical Services, both located in Johannesburg, South Africa and accredited with the South African National Accreditation System, and Genalysis Laboratory Services (Pty) Ltd., located in Perth, Australia and accredited with the National Association of Testing Facilities, Australia.

The drilling of the Otjikoto Gold Project was conducted on a grid of 100 metres (strike) by 50 metres (dip) spacing between boreholes. The database for wire framing consisted of 55 diamond drill and 52 reverse circulation boreholes. The assay results below detection, 0.02 gold (g/t), were set at 0.01 gold (g/t) and the high outlier values cut to 20 gold (g/t).

Security of Samples

Transport of drill samples, core and RC chips, from the drill rigs to the core yard is undertaken daily by TEAL exploration staff, overseen by a senior geological technologist. The core yard is well fenced and secured. Transport of samples to Windhoek and on to independent laboratories is by independent courier. Samples are kept in sealed and labelled bags until received by a laboratory in Johannesburg or overseas. Analytical laboratories are instructed to check samples against the dispatch list and indicated weight. Half core, RC and metallurgical reference material are kept secure in the Otjiwarongo sample storage facility, which is a secure shed on the outskirts of town.

The sampling technique, equipment, field and core yard operations and analytical method undertaken throughout the development of the Otavi area is considered by RSG Global to be appropriate for this stage of the exploration program. Notably, the retention of representative geological and assay material allows for thorough auditing and check analysis. All of the laboratories used by the Company for assaying also reported their own internal quality control results.

Mineral Resources

No mineral reserves have been defined on the Otjikoto Gold Project to date. However, an inferred mineral resource has been established. The resource estimate relates to two mineralized zones known as the Upper and Lower Blocks. These two blocks are separated by a low grade parting known as the middle zone. The resource envelope includes this middle zone and a 0.5g/t cut-off is maintained. The zones have been mapped into a geological model.

Although the mineralized zones were modelled on a 0.5 gold (g/t) cut-off, the boundaries of the mineralized zones or lenses were extended by 1 metre ("soft grade boundary approach"). The bulk density applied was 2.8t/m3. The inferred mineral resources extend to a depth of approximately 130 metres and are open-ended along strike and down dip to the southwest.

Inferred Mineral Resources – Otjikoto Gold Project
Mineralized Zone	Tonnes(000)	Gold Grade(g/t)	Contained Gold(oz)
Upper	4,410	1.43	203,000
Middle	2,620	0.31	26,000
Lower	18,551	1.08	644,000
Total	25,581	1.06	873,000

Metallurgy

Although the Otjikoto Gold Project is not yet considered a mine development project, significant metallurgical work has been performed that is considered material to the project. The Company drilled 17 large diameter diamond drill holes in order to recover representative sample material for metallurgical test work. The sample material was selected to represent low, medium and high in-situ gold grades.

Detailed geological logging indicates that the typical percentage of vein material in the mineralization rarely exceeds 10% of the total volume within the deposit envelopes. The gold mineralization occurs as free gold grains associated with pyrrhotite, magnetite and pyrite in veins. It is therefore considered important to test the applicability of a pre-concentration stage prior to milling. Results from magnetic separation on the 12x6 millimetre and 6x2 millimetre size fractions of crushed material for the sulphides returned good gold recoveries (78% and 83%, respectively) and mass pulls of 55% and 60%, respectively. In-line pressure jig ("IPJ") gravity separation resulted in recoveries ranging from 79.5% (12x6 millimetre size material) to 88.2% (6x2 millimetre size material).

TEAL intends to investigate further the suitability of magnetic separation and IPJ equipment for the Otjikoto Gold Project.

Flotation test work carried out on both oxide and sulphide material provided excellent recoveries in the mid-90% recovery range. Dissolution test work carried out on mill gold concentrates to simulate intensive leaching in an In-Line Leach Reactor ("ILR") returned extremely good dissolution results with recoveries in excess of 95%. The abrasion test work results have shown that both oxide and sulphide material are relatively soft, with the sulphides being marginally harder than the oxide types. No specific problems are envisioned in milling operations.

Program of Work

The Company"s proposed three year exploration and evaluation budget for the Otjikoto Gold Project and the Otavi Exploration Area is $9.0 million.

The Company plans to pursue at an estimated cost of $6.0 million the following work program on the Otjikoto Gold Project within the next 36 months in order to expand and upgrade the current resource base of the Otjikoto Gold Project:

• Perform delineation and infill drilling with a resource expansion drilling program to be completed within 12 months.
• Perform assays and mineralogy.
• Perform geological and mine modelling and assessments.
• Perform geohydrological as well as geotechnical assessments and investigations.
• Complete a feasibility study on the Otjikoto Gold Project.

The Company plans to pursue at an estimated cost of $3.0 million the following work program on the Otavi Exploration Area within the next 24 months:

• Appraise and prioritize SPECTREM AEM (2005) survey results.
• Perform ground follow-up of SPECTREM AEM anomalies.
• Continue regional exploration drill testing.
• Pursue advanced exploration (resource definition) of specific targets.
• Perform further SPECTREM AEM surveys (phase 2) and ground follow-up.
• Perform regional exploration drill testing.