Latest update: 05-13-08

Additional licences in Zambia

Overview

TEAL has four additional wholly-owned large scale prospecting licences covering 6,679 square kilometres of prospective geological terrain in Zambia, three of which are located between the towns of Lusaka and Kabwe and the other within Zambia’s Eastern Province. The Company considers the properties that are subject to the Company’s licences to have the potential for carbonate hosted, high-grade zinc silicate, sediment-hosted copper and magmatic nickel sulphides mineralization.

Licence No. 203 has been explored in the past and contains a known high-grade zinc silicate deposit. This licence grants the right to prospect for copper, lead, zinc, gold, sulphur and germanium. A portion of the licence area is subject to a prior claim with a small-scale licence holder. Subject to concluding an agreement with this holder, TEAL intends to undertake a diamond drilling program to evaluate the anomalies previously defined and to extend the known resource.

Licence No. 218 is situated in eastern Zambia and is remote from main infrastructure and amenities. This licence grants the right to prospect for copper, gold, nickel and chromium. The area is prospective for nickel, copper and gold. Only limited exploration work has been undertaken by TEAL to date.

Licence Nos. 238 and 242 have been recently acquired. Licence No. 238 grants the right to prospect for copper, cobalt, zinc and silver, and licence No. 242 grants the right to prospect for copper, cobalt, lead, zinc, nickel, gold and silver. TEAL has undertaken no work to date on these licences.

Property Description, Location and Ownership

Licence Nos. 203, 218, 238 and 242 are large scale prospecting licences and cover a total of 6,679 square kilometres in Central Zambia. These licences are wholly owned by either ARM (Zambia) Limited, or ARM Development (Zambia) Limited. For licencing details and permit requirements see ‘‘Zambia - Exploration Areas -Copperbelt Joint Venture Exploration Area - Property Description, Location and Ownership’’.

Information in respect of the Company’s additional licences in Zambia is as follows:

 Licence
 Number
Area
km2
Date of
Original Grant
Expiry Date of
Current Period
203 646 27/01/2003 16/05/2007
218 3,468 10/03/2004 09/03/2006
238 1,465 24/02/2005 23/02/2007
242 1,100 14/04/2005 13/04/2007

The fees to maintain the licences in good standing for a two year period range from $248 for Licence No. 203 to $1,247 for Licence No. 218. A small scale mining

licence has been registered over parts of Licence No. 203. TEAL hopes to negotiate an agreement with the holders of this claim.

TEAL’s intention is to use a portion of the net proceeds of the Offering to evaluate these licences and to carry out exploration activities.

Sample Preparation and Analysis - Central African Projects

Initial sample processing is carried out at the Company’s core yard at Chambishi. Sampled half core is crushed in a jaw crusher into pieces less than 2 millimetres wide. The crusher is cleaned using compressed air and pure quartz before every use and with compressed air between samples. The crushed sample is repeatedly riffle split to yield a sub-sample of approximately 250 grams. Compressed air is used to clean the riffler after every sample. The sub-sample is pulverised to less than 106 microns using a sieb mill (‘‘ring and puck’’ mill). The mill is cleaned after each sample using compressed air and a paint brush. After every tenth sample, the mill pot and rings are cleaned again using crushed pure quartz. The milled sample is placed in a labelled sample envelope for dispatch to the laboratory. RC and RAB samples are collected at 1 metre intervals and split to approximately 3 kilograms on site, prior to dispatch to the selected laboratory. Rock chip samples collected from outcrops are crushed and milled at the Company’s Chambishi facility. Preparation procedures are the same as those described above for diamond drill core.

The following laboratories were used to analyse drill samples from drilling and soil sampling activities in Zambia and the DRC: Alfred H Knight Laboratories (previously the ZCCM Laboratory), ALS Chemex, AVRL (Anglovaal Research Laboratory, Johannesburg) for check, umpire and exploration samples, and AARL (Anglo American Research Laboratory, Johannesburg) for further check and umpire samples.

These laboratories are large facilities that are well known to the minerals industry in Africa. The laboratories use conventional sample preparation and analytical methods. Standard base metal analysis techniques included a two acid digestion and analysis by atomic absorption and XRF analysis on fused beads and pressed powder pellets. Acid soluble copper is analysed by leaching with sulphuric acid, and extraction and analysis by atomic absorption. ALS Chemex runs two sets of appropriate standards with every sample batch. Blank and duplicate samples are also analysed and reported to the client. Rock chips are routinely analysed by a ‘four acid’ digestion procedure, with 27 element analyses by ICP-AES method at ALS Chemex in Toronto. These methods are considered conventional and appropriate for base metals analysis.

Sample Security

Transport of drill samples (core and RC chips) from the drill rigs to the core yard is undertaken by the Company’s exploration staff, overseen by a senior geological technologist. The core yard is well fenced and actively secured. Transport of samples to laboratories in South Africa or elsewhere is undertaken by an independent courier service. Samples are kept in sealed and labelled bags until received by the laboratories in Johannesburg or overseas. Analytical laboratories are instructed to check samples against the dispatch list and indicated weight. Half of the core percussion, RC and metallurgical reference material is kept secure in the Chambishi sample storage facility, which is a well-built and secure property situated between the towns of Kitwe and Chingola.

The sampling technique, equipment, field and core yard operations and analytical method undertaken are considered by RSG Global to be appropriate for this stage of the programs. In particular, the retention of representative geological and assay material allows for thorough auditing and check analysis. All of the laboratories used for assaying also reported their own internal quality control results.