Tenke Mining Corp.

Tenke Mining Corp.

November 02, 2005 07:00 ET

DRC Approves Tenke Fungurume Project

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 2, 2005) - Tenke Mining Corp. (TSX:TNK) (the "Company") is pleased to announce that amended agreements for the development of the Tenke Fungurume Copper/Cobalt Project have been formally approved by Gecamines and the Government of the Democratic Republic of Congo ("DRC") and ratified by Presidential decree. These agreements govern the Company's rights in partnership with Phelps Dodge Corporation ("Phelps Dodge") to develop the Tenke Fungurume Copper/Cobalt Project in Katanga Province, DRC. Tenke Mining Corp. will have an effective 24.75% interest in what is considered the largest and highest-grade undeveloped copper/cobalt project in the world today.

The enormous deposits at Tenke Fungurume are within a concession area totaling more than 1500 square kilometers in the rich and prolific Katanga copper belt. The project area remains extensively under explored. The known deposits contain inferred resources of 547 million metric tonnes grading 3.5% copper and 0.27% cobalt. The mineralization is hosted in a sequence of sedimentary host rocks with a cumulative strike length greater than 82 kilometres. Copper outcrops have been mapped over a 300 square kilometer area to date.

This landmark approval allows the Tenke Fungurume project to advance according to a staged development plan led by Phelps Dodge, with active involvement of the Company and Gecamines. The amended agreements become effective immediately and, coincident with this, the condition of force majeure is being lifted as related to the initial project. A summary of the key amended terms is as follows:

- Start the project with at least 40,000 tpa of copper and associated cobalt with the desired objective to be at 130,000 tpa by the end of year 5 and 400,000 tpa of copper production by year 11 of operations. Preliminary in-house mine plans estimate oxide ore grades exceeding 5% copper for the first 8 years of production.

- Approval for Phelps Dodge to complete the process of becoming the controlling shareholder of Lundin Holdings Ltd. ("Lundin Holdings") which is the Company's wholly owned subsidiary and majority shareowner of the Tenke Fungurume Project. Coincident with the receipt of the DRC government final approvals Phelps Dodge and the Company have completed the transfer of shares of Lundin Holdings to give Phelps Dodge 70% ownership of Lundin Holdings, the 30% balance being retained by the Company.

- Lundin Holdings will have 82.5% and Gecamines 17.5% of the share ownership of Tenke Fungurume Mining S.A.R.L ("TFM") - the Congolese company which holds 100% interest in the properties. As a result of the Lundin Holdings shareholding agreement with Phelps Dodge, the Company will have an effective 24.75% interest in the Tenke Fungurume Project. Phelps Dodge as operator will have an effective 57.75% interest.

- A total of $US 50 million in asset transfer payments are to be paid to Gecamines according to 5 milestones staged over a period of about 5 years. Of these remaining transfer payments, Phelps Dodge is obligated to pay the first $US 25 million. Thereafter the Company's obligations are to pay 30% of the remaining balance in stages of $US 1.5 million upon commencement of commercial production and $US 3 million on each of the two anniversaries from first commercial production of copper.

- Incorporation of the comprehensive tax provisions of the DRC's new Mining Code.

In anticipation of the project advancing, earlier this year Phelps Dodge mobilized GRD Minproc, one of the most experienced engineering contractors in the region, to update previous feasibility studies and to commence infrastructure assessments. This work is now well advanced, based on initial production criteria of 50,000 tpa copper and 4,000 tpa cobalt production. Golder Associates and Greystone Environmental are also progressing with production of the final environmental impact assessments and social programs respectively.

Staff have recently mobilized to the field to commence data collection, the community consultation process and initiation of social development programs to assist the people in the area of the project. The objective is to have the feasibility study completed towards mid-2006 and construction to proceed targeting first copper production in early 2008.

Paul Conibear, President of Tenke Mining Corp., commented, "The remobilization of this world-class copper project is a direct result of outstanding efforts of the DRC government's Office of the Presidency, cooperation between the four major components of the transitional government and the initiatives of the Ministries of Mines, Portfolio, Plan, Finance and Gecamines to arrive at development terms which enable Tenke Fungurume to advance immediately. The project will be a major source of new employment for Katanga and will bring significant annual tax revenue to the government along with infrastructure rebuilding and important social programs for the region."

The historic resource estimate for the Tenke Fungurume copper/cobalt project complies with the requirements of "Mineral Resource/Reserve Classification: Categories, Definitions and Guidelines for Public Reporting" a Report of the Ad Hoc Committee on Mineral Resource Classification of the Canadian Institute of Mining, Metallurgy and Petroleum as revised 15 February 1996. (the "Report").The estimates are based on and accurately reflect information compiled by the Competent Persons, as defined in the Report. Each of the Competent Persons has relevant experience in relation to the mineralisation being reported on by them to qualify as Competent Persons as defined in the Report. The competent persons for the Mineral Resources statement are Alan King, and Brian Spratley who were employed by Mining Development Services Ltd, a subsidiary of Tenke Mining Corp. The resource estimate is not compliant with NI 43-101 standards.

On Behalf of the Board

Paul K. Conibear, President

Contact Information

  • Tenke Mining Corp.
    Sophia Shane
    Corporate Development
    (604) 689-7842
    (604) 689-4250 (FAX)