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Geacamines sold down the river as DRC Government Approves Key Terms for Tenke Fungurume.
Under the approved amendment terms, Lundin Holdings will have 82.5% and Gecamines 17.5% of the share ownership of Tenke Fungurume Mining S.A.R.L ("TFM").
Source: Tenke Mining Corp.
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 27, 2005) - Tenke Mining Corp. (the "Company") (TSX:TNK - News) is pleased to announce that the Council of Ministers of the Democratic Republic of Congo ("DRC") have approved the principal terms to be amended under existing agreements which govern the Company's rights to develop the Tenke Fungurume Project in Katanga Province, DRC.
The Tenke Fungurume Project is a world class copper/cobalt deposit which the Company acquired controlling interest of in November 1996 through agreements between its subsidiary Lundin Holdings Ltd. ("Lundin Holdings"), the DRC Government and the State mining company Gecamines. Thereafter, significant investment was made by Lundin Holdings, including rebuilding of local infrastructure and progress on a comprehensive feasibility study which was nearing completion when the conflict in the DRC forced a suspension of the project in early 1999. For several years, Phelps Dodge Corporation ("Phelps Dodge") have been actively supporting the Company on the project. A conditional shareholding agreement was signed in early 2004 between the Company and Phelps Dodge initiating steps for Phelps Dodge to become the controlling shareholder of Lundin Holdings.
The Council of Ministers approval of the principal terms allows Tenke Fungurume to advance to its next stage immediately upon amending the existing agreements. Once amended agreements are signed and ratified by the Government of the DRC, the project will progress according to a staged development plan led by Phelps Dodge, with active involvement of the Company and Gecamines. The project will be a major source of new employment and tax revenue in the region.
Under the approved amendment terms, 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, and Phelps Dodge as operator will have an effective 57.75 % interest. The amended terms also involve a significantly reduced series of asset transfer payments and incorporation of the comprehensive tax provisions of the DRC's new Mining Code. Additional details will be provided by the Company once the amendment process is completed.
With widespread support from the international community, the DRC has been evolving through a major peace process which achieved a milestone in July 2003 with the institution of a transitional government made up of representation from all main parties across the country. In June and July of 2005, new milestones in this process were achieved including commitments to hold a constitutional referendum by November 2005 and a reaffirmed commitment to hold country wide elections within the original time frames set out in the peace accords. Voter registration commenced in mid-June and since then, more than 2.5 million voters have been registered in the capital city of Kinshasa alone, in a country wide initiative supported by the international community.
The Company would like to acknowledge the considerable effort and support of the DRC transitional government including the office of the Presidency, each of the four Vice Presidents, the Ministers of Mines, Plan, Portfolio and Finance, and Gecamines for their perseverance in arriving at this important decision on the Tenke Fungurume Project. Development of projects like Tenke Fungurume will reestablish the DRC as a leading copper producer and provide long term economic benefits critical to the success of the rebuilding programs in the country.
On Behalf of the Board
Paul K. Conibear, President
Contact:
Tenke Mining Corp.
Sophia Shane
Corporate Development
(604) 689-7842
Fax: (604) 689-4250
www.tenke.com
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