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Copper in Peru and Ilmenite, Zircon and Rutile in Kenya Tiomin has two major projects underway in Peru and Kenya and is working hard to restore shareholder value after the difficult period in late 2006 and early 2007. The management is constantly evaluating new investment opportunities and hopes to see material progress in 2007. Jinchuan Group Ltd., of China, recently increased its interest in Tiomin to 20% and we are looking forward to expanding our relationship with Jinchuan. Jinchuan (www.jnmc.com) is the largest producer of nickel, cobalt and platinum group metals in China, combining mining, milling, smelting & refining and chemical engineering operations. It produces nickel, copper, cobalt, precious metals, various bulk chemicals and nonferrous metals. The output of nickel and platinum group metals are 88% and 90% respectively of total Chinese production. We will continue to invest in the Pukaqaqa Copper Project in Peru, in which we own a 49% interest. This copper-gold deposit is located 15km northwest of Huancavelica, Peru. Pukaqaqa was previously the subject of extensive exploration by Rio Tinto Mining between 1996 and 2000, where 17,590 meters of drilling were completed. In 2005, Tiomin and its joint venture partner Compania Minera Milpo S.A. (51%) completed 6,000 meters of drilling and proceeded with the preparation of a new resource of 17.1 million tonnes grading 0.54% Cu, and an inferred resources of 114.6 million tonnes grading 0.60% Cu, at a cut-off grade 0.3% Cu. The project has excellent infrastructure and growth potential. Tiomin is optimistic that the Pukaqaqa project will create significant value for its shareholders in view of the strong outlook for commodities such as copper. In Kenya, Kwale remains an interesting project but we are waiting for the Government of Kenya to complete the tasks required by international lenders so that we reorganize a new project financing syndicate. Tiomin will not lift the state of Force Majeure at Kwale until this occurs. With proven and probable reserves of 116.9 million tonnes(MT) (38.9 Mt proven @ 7.1% Total Heavy Minerals (THM) and 78.0 MT probable @ 4.16% THM) in the Central and South dunes alone, Kwale is projected to produce annually 330,000 tonnes of ilmenite, 75,000 tonnes of rutile and 40,000 tonnes of zircon per year generating over US $40 million in pre-tax operating cash flow (excluding capitalized financing costs) for the first six years over an expected mine life of approx. 11 years. Thereafter, Tiomin's considerable heavy mineral coastal deposits are expected to see development, benefiting from the coastal infrastructure in place and fueling the potential for a long-term growth. | | | | ||||||
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