Tenke Mining Corp.

Tenke Mining Corp.

November 20, 2006 10:36 ET

Tenke Fungurume Project Update

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 20, 2006) - Tenke Mining Corp. ("Tenke" or the "Company") (TSX:TNK) is pleased to provide the following update on the Tenke Fungurume copper/cobalt project in Katanga Province, Democratic Republic of Congo ("DRC"). The project is advancing under the direction of project operator Phelps Dodge Corporation through its wholly owned subsidiary Phelps Dodge Katanga Corporation ("Phelps Dodge"). Final feasibility study, environmental impact assessment work and implementation of local social programs have progressed significantly over the past quarter. In addition, significant pre-construction activities have advanced on site to maintain a target of first copper cathode production at Tenke Fungurume towards the end of 2008.

Feasibility study work being performed by GRD Minproc is advancing towards a fourth quarter 2006 completion. As a result of project drilling and Kwatebala ore reserve modeling success, enhancements were recently made to the feasibility study criteria and the initial facility capacity for purposes of the feasibility study was increased to more than 100,000 tonnes of copper and a nominal 8,000 tonnes of cobalt production. Infill ore reserve, step out and condemnation drilling progressed well during the past quarter and drill rigs are being added to further explore three new mineralized zones just to the west of the Kwatebala ore body.

Pilot plant process test work continued at Hazen Laboratories in Colorado and basic design work in Perth by GRD Minproc is well advanced. To further progress the project schedule, major long delivery items including mining equipment, acid plant and the grinding mill have been tendered. Bids will be in hand and evaluated to facilitate major equipment awards in the fourth quarter 2006. The largest piece of mining equipment, a continuous miner, has been purchased and delivered to Fungurume for use in site work construction and pre-stripping. Earthworks and steel supply contracts were also sent out to tender during the past quarter with the intent to award prior to year end.

Project staffing increased with both expatriate and local staff added in Lubumbashi and at Fungurume. Current full time staffing in the DRC is about 275 personnel, with more than 600 additional local personnel retained on contract for road construction, site clearing, housing erection and other pre-construction activities. A large number of local workers were contracted for road rebuilding of 40 kilometers of the national highway in the vicinity of the Tenke Fungurume concessions. Total full time and contract employment facilitated by the project will soon reach 1,000 local jobs, providing a new major source of employment in the region.

Environmental impact assessments, community consultation and social programs remain a high priority on the project. Construction of two schools to accommodate 600 children is occurring, teachers have been hired and classroom furniture and supplies purchased. The first of the schools went into operation in October, and the second school is expected to be in operation prior to year end. Rebuilding of the former Gecamines school will commence following completion of the other two new schools in Tenke and Fungurume villages.

Agricultural activities being advanced by the project in the Tenke Fungurume concession area continued, including provision of seeds, crop purchase and oxen husbandry programs. A fresh water well drilling program is in progress through funding from the Lundin for Africa Foundation providing fresh water to 10 communities who are located in remote locations in the area.

To promote micro-enterprise development, small business training and starter funding is being given to local entrepreneurs to stimulate employment through 24 micro-enterprise initiatives with products from these new businesses supplying the project with bricks, fencing, and other local goods. Social and employment programs are being conducted with the guidance of PACT Congo, a non-governmental organization ("NGO") well established in Katanga, who in turn are directing specialist NGOs for agricultural, school and other specific social programs. Community and regional support for the project is high. The project is being developed under the Equator Principles, Voluntary Principles for Security and Human Rights, OECD and applicable IFC guidelines and Phelps Dodge's high corporate standards.

Debt financing initiatives led by Phelps Dodge and the project's financial advisor Rothschild Inc. are advancing. It is expected that a significant level of debt will be available for the project. Prior to debt drawdown being available, project activities are being funded with partner advances. To contribute to a rapid advancement of pre-construction capital works ahead of formal Phelps Dodge board approvals for the project, in the third quarter Tenke agreed to contribute funding to early capital works estimated at $24.5 million, of which Tenke is committed to fund up to 30% prior to year end.

Within the DRC, a historic milestone has been achieved, with the DRC people accomplishing their first democratic elections in 40 years, a remarkable success given the logistical challenges and large diverse population of the country. A new elected government is anticipated to be in place by year end, providing a supportive framework for advancement of Tenke Fungurume in the year ahead.

The potential acquisition of Phelps Dodge by Freeport-McMoRan Copper & Gold, Inc. ("Freeport") announced today is expected to be very positive for the project. Freeport successfully pioneered the enormous Ertsberg/Grasberg mine in a remote region in Papua, Indonesia (formerly Irian Jaya), mastering the technical, political and geographic challenges at Grasberg to make it one of the largest, most successful copper/gold mines in the world.

On behalf of the Board

Paul K. Conibear, President

Contact Information

  • Tenke Mining Corp.
    Sophia Shane
    (604) 689-7842
    (604) 689-4250 (FAX)
    Website: www.tenke.com