on Kinsevere Stage II
TSX, ASX: AVM
Common shares outstanding 101.3 million
All amounts are expressed in US dollars, unless otherwise stated.
MONTREAL, July 20 /CNW Telbec/ - Anvil Mining Limited (TSX, ASX: AVM), ("Anvil"
or the "Company"), today announced that it had completed an agreement with La
Générale des Carrières et des Mines ("Gécamines") and the Government of the
Democratic Republic of Congo ("DRC") on the terms of its Mutoshi Joint Venture
The Company is also pleased to announce that it has recommenced the engineering
and design work for the Kinsevere Stage II copper project located approximately
30 km north of Lubumbashi, the provincial capital of the Katanga Province in
the DRC. At the time the Company suspended the development of Kinsevere Stage
II in November 2008, the engineering and design work was approximately 80%
Bill Turner, President and CEO of Anvil, commented, "The conclusion of the
Mustoshi JV amended agreement effectively ends the DRC Government's review of
our mining agreements that commenced in mid-2007. We look forward to working
with Gécamines to further evaluate and develop the potential of the Mutoshi
properties. Today's announcement means that the future development of Mutoshi
can be carried out under a structure that not only delivers value to our
shareholders but also to Gécamines and the Kolwezi community more generally."
Amended Agreement for the Mutoshi Joint Venture
The Mutoshi project comprises the Company's Kulu mine and a number of
exploration interests located in Kolwezi, which is situated in the western
extremity of the Central African Copperbelt approximately 250 kilometres west
of the provincial capital, Lubumbashi. The Company's interests in Mutoshi are
held through a special purpose JV company, Société Minière de Kolwezi SPRL. The
key terms are as follows:
- Anvil's interest in the Mutoshi project has been reduced from 80% to
70%; Gécamines' interest has increased from 20% to 30% on a non-
- Anvil will pay an additional Pas de Porte (entry premium) of $14.4
million, of which $7.2 million is to be paid within six months of the
amended agreement coming into effect and the balance within 18 months
of the amended agreement coming into effect. In the event that Anvil
completes financing of $125 million or more prior to payment of the
first tranche of the Pas de Porte, the timing of these payments will be
revised such that $7.2 million shall be paid within 14 days of the
receipt of the funds of such financing and the second tranche of the
same amount will be paid within 12 months of the date of payment of the
- The Company will pay royalties to Gécamines of 2.5% of gross turnover
(total sales) calculated in accordance with the 2003 Mining Code (prior
royalties were based on a 2% net smelter return).
- Cash payments, at a rate of $35 per tonne of contained copper on
additional copper reserves over and above 753,000 tonnes of copper,
based on JORC 2004 or equivalent norms.
- A complementary Feasibility Study based on the in situ resources
contained in the Mutoshi exploitation permit area must be completed
within 12 months of the amended agreement, subject to an extension of
two additional six month periods for the submission of such a
- Anvil will nominate the General Manager of the JV company, while
Gécamines shall appoint three members of the eight person management
committee and nominate the Assistant General Manager.
The Company has significant exploration interests at Mutoshi and during 2008
completed a scope drilling program, the purpose of which was to outline
sufficient near-surface oxide copper and cobalt mineralization to justify
development of the Mutoshi Stage II Solvent Extraction - Electrowinning ("SX-EW") plant. While significant further infill drilling and metallurgical
testwork are required, the results of the scope drilling program have enabled a
grade-tonnage model to be created which has allowed for the development of
preliminary mine planning and notional mining schedules for feed to a possible
Stage II SX-EW plant.
Status of Kinsevere Stage II - restart of the engineering and design work
During the fourth quarter of 2008, the Company placed the remaining engineering
design, fabrication, construction works and procurement for the Kinsevere Stage
II 60,000 tpa SX-EW development on hold pending the securing of additional
funding. Construction of the plant is almost 50% complete.
The Company has engaged Ausenco Limited to recommence work on Kinsevere Stage
II in order to complete the well-advanced engineering and design work relating
mainly to electrical, piping and instrumentation, which is expected to take
three months to complete. Auscenco has been involved with Anvil since the
commencement of Kinsevere Stage II in 2007, and approximately 80% of the
engineering and design work has been completed. The Company remains well-positioned to recommence development of Kinsevere Stage II when the Company
obtains the necessary funding.
Payment of Kinsevere Pas de Porte
As part of the Kinsevere amended agreement reached in January 2009 with
Gécamines and the DRC Government, the Company paid this week to Gécamines the
first tranche of the Pas de Porte of $10 million, less an amount of $2.2
million due to Anvil by Gécamines with respect to past purchases of copper
concentrates by Gécamines. The second tranche of the Pas de Porte payment of $5
million is due to be paid in January 2010.
Anvil Mining Limited is an unhedged copper producer whose shares are listed for
trading on the Toronto Stock Exchange (as common shares) and the Australian
Securities Exchange (as CDIs) under the symbol AVM.
Caution Regarding Forward Looking Statements: This news release contains
"forward-looking statements" and "forward-looking information", based on
assumptions and judgements of management regarding future events and results.
Often, but not always, forward-looking information can be identified by the use
of words such as "plans", "expects", "is expected", "is expecting", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes",
or variations (including negative variations) of such words and phrases, or
state that certain actions, events or results "may", "could", "would", "might",
or "will" be taken, occur or be achieved. The purpose of forward-looking
information is to provide the reader with information about management's
expectations and plans for 2009. Readers are cautioned that forward-looking
information involves known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of Anvil and/or
its subsidiaries to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking
information. Such factors include, among others, the actual market prices of
the available-for-sale investments, the actual market price of copper, changes
in project parameters as plans continue to be evaluated, and the possibility of
cost overruns, as well as those factors disclosed in the Company's filed
documents. There can be no assurance that the Stage II expansion of the Mutoshi
operation will proceed as planned; or funding to provide for the recommencement
of construction of Kinsevere Stage II will be available; or the Stage II
expansion of the Kinsevere copper mine will proceed as planned or be
successfully completed within expected time limits and budgets; or that, when
completed, the expanded facility will operate as anticipated.
For further information: Craig Munro, Senior Vice President Corporate & CFO,
Tel: +61 (8) 9481 4700, email@example.com (Perth); Robert La Vallière,
Vice President Corporate Affairs, Tel: (Office) (514) 448-6664, (Cell) (514)
944-9036, firstname.lastname@example.org (Montreal); Website: www.anvilmining.com
CO: Anvil Mining Limited
NI: MNG PCS VNT
-0- Jul/20/2009 8:13 GMT
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