Anvil Mining Reports Second Quarter 2009 Results

      <<     TSX, ASX: AVM     Common shares outstanding 101.9 million     All amounts are expressed in US dollars, unless otherwise stated.     >>   MONTREAL, Aug. 13 /CNW Telbec/ - Anvil Mining Limited (TSX, ASX: AVM), ("Anvil"  or the "Company"), today announced a net loss for the second quarter ended June  30, 2009, of $11.3 million (-$0.13 per share), compared to net income of $8.5  million ($0.12 per share) for the second quarter of 2008. Net sales for the  second quarter of 2009 totalled $7.7 million, compared to $59.8 million for the  corresponding quarter in 2008. Negative cash flows from operating activities,  before working capital movements, of $6.4 million (-$0.07 per share), compared  to a positive cash flow of $24.6 million ($0.35 per share) in the second  quarter of 2008. At June 30, 2009, the Company had a cash balance of $48.7  million, available for sale investments of $12.6 million, trade receivables of  $5.4 million and almost no debt. Copper production for the second quarter of  2009 totalled 5,372 tonnes.  The Company's 2009 second quarter results were negatively affected by a number  of factors including: significantly lower production and sales resulting mainly  from the cessation of mining and processing operations at the Dikulushi and  Mutoshi mines, lower realized copper prices and one-off charges of $6.1 million.  Bill Turner, President and CEO of Anvil, commented, "While the strategy put in  place during the fourth quarter of 2008 and implementation of a range of  further initiatives have involved significant one-off impacts on the Company's  financial performance, we believe that the Company is now better positioned to  move forward. The Kinsevere HMS plant which recommenced operations in late  March 2009 is on target to produce 8,900 tonnes of copper through to the third  quarter of 2009."  Mr. Turner further commented, "We are especially pleased to have reached  agreement with Trafigura for a combined debt and equity financing arrangement  for an aggregate amount of $200 million that represents a fully financed  solution for the development of Kinsevere Stage II. With approximately 50% of  the Stage II capital cost already incurred, this financing package will enable  us to commence commissioning of Kinsevere Stage II in late 2010 and achieve  commercial production in 2011. Annual production is expected to be 60,000  tonnes of Grade A copper cathode at an estimated "C1"(1) cash cost of $0.89 per  pound of copper. We believe that Trafigura, an internationally renowned,  independent commodities trading company, represents an excellent long-term  partner for Anvil and we look forward to working with them to successfully  complete Kinsevere Stage II and further develop the Company's interests in the  DRC."  The complete second quarter 2009 unaudited financial statements together with  the related Management's Discussion and Analysis (MD&A) are available on  Anvil's website at www.anvilmining.com under the heading "Financial Reports"  within the Investor Relations section.        <<     ------------------------------------------     (1) The C1 Cash cost is the mine gate cash cost that includes export         duties and transportation and marketing charges but does not include         royalties.     >>     Cash and Liquidity    As at August 12, 2009, Anvil had approximately $40.0 million in cash, $10.5  million in available-for-sale investments and $5.2 million of receivables, the  majority of which it expects to realize during the third quarter of 2009.  During the next 12 months the Company's commitments include $12.2 million for  Pas de Porte (entry premium) payments due to La Générale des Carrières et des  Mines ("Gécamines") with respect to the Kinsevere and Mutoshi amended  agreements and $19.5 million that relates to the Kinsevere Stage II  development. In July 2009, the Company paid to Gécamines the first tranche of  the Pas de Porte of $10 million for Kinsevere, less an amount of $2.2 million  due to Anvil by Gécamines with respect to past purchases of copper concentrates  by Gécamines.    Kinsevere HMS Production    The Kinsevere HMS plant was restarted on March 27, 2009, with feed to the plant  sourced from the Run of Mine ("ROM") stockpile and at June 30 has produced  21,655 tonnes of concentrate, grading 25.7% for 5,571 tonnes of copper. The HMS  plant is expected to produce approximately 8,900 tonnes of copper contained in  concentrates through to the end of the third quarter of 2009, at an operating  cash cost at the mine gate of less than $0.50/lb Cu (inclusive of sunk costs).  Table 1 below sets out the details of the performance of the HMS plant for the  second quarter and year to date.  In order to extend the operation of the HMS plant beyond the end of the third  quarter 2009, during August, the Company plans to resume mining in the Stage I  Central (Tshifufia) Pit where ore faces and broken stocks with an inventory of  approximately 825,000 tonnes with a grade in excess of 5.0% copper are  available.     <<                  Table 1. Performance of Kinsevere HMS Plant     -------------------------------------------------------------------------                                                           Second        Year                                                          Quarter     to date                                                            ended          at                                                          June 30,   June  30,                                                             2009        2009     -------------------------------------------------------------------------     Ore mined (tonnes)     -------------------------------------------------------------------------     Ore processed(1)                                      83,084      85,780     -------------------------------------------------------------------------     HMS feed grade (%Cu)                                     7.9         8.0     -------------------------------------------------------------------------     Contained copper (tonnes)                              6,566       6,837     -------------------------------------------------------------------------     HMS copper recovery (%)                                 70.9        70.9     -------------------------------------------------------------------------     Copper produced in concentrate (tonnes)                5,372       5,571     -------------------------------------------------------------------------     Copper sold(2) (tonnes)                                3,060       4,121     -------------------------------------------------------------------------     Operating cash cost (ex mine-gate)     $/tonne of concentrate                                   484         734     -------------------------------------------------------------------------     1. Ore processed relates to ore processed through the HMS plant.     2. At July 31, 2009, the Company held a stockpile of 5,295 tonnes of        copper contained in concentrate.     >>     Kinsevere Stage II    On August 10, 2009 the Company announced that it had reached agreement with  Trafigura Beheer B.V. ("Trafigura") for a combined debt and equity financing  arrangement for an aggregate amount of $200 million that represents a fully  financed solution for the development of Kinsevere Stage II. Under the terms of  the equity financing, Trafigura will subscribe for Anvil equity units by way of  private placement, which will result in proceeds to Anvil of $100 million. Each  Anvil equity unit will be issued at a price of C$2.20 and consist of one common  share of Anvil and 0.232 of one common share purchase warrant. The equity  financing will be undertaken in two tranches, the first of which will bring  Trafigura's aggregate equity interest in Anvil to 19.9% and the second of  which, will increase Trafigura's shareholding to approximately 36% of the  issued and outstanding common shares of Anvil, with an opportunity to increase  its shareholding to approximately 39% on a fully-diluted basis should it  exercise the common share purchase warrants.  Trafigura will also make available to the Company a loan facility with a total  commitment of $100 million. The term of the loan facility is five years from  the first drawdown and all amounts outstanding under the loan facility will  bear interest at a rate per annum equal to LIBOR plus 4%, plus the cost of  political risk insurance.  The second tranche of the equity financing, the debt finance and the additional  agreements described below are subject to normal regulatory approvals and  shareholder approval.  In addition to the agreements reached in connection with the equity and debt  financing, the Company has reached agreement with Trafigura on the principal  terms of an offtake agreement, a technical services agreement and an ancillary  rights agreement.  In July 2009, the Company re-engaged with Ausenco Limited ("Ausenco"), signing  a contract for recommencement of work on engineering and design work relating  mainly to electrical, piping and instrumentation, which was approximately 80%  complete at the time the project was placed on hold in November 2008. The  Company is also working to put in place a Lump Sum Turnkey contract for  completion of the construction and fabrication works, the awarding of which is  conditional upon receiving the normal regulatory approvals and shareholder  approval of the funding package with Trafigura.  As at August 12, 2009 approximately $199 million ($179.5 million spent, $19.5  million committed) of the budgeted cost of $394 million had been invested. The  increase in capital cost is a result of several factors including: redundancy  payments to Kinsevere Stage II personnel; payment of demobilisation costs to  contractors; charges associated with the cancellation of the engineering and  design works; penalties in connection with the cancellation and suspension of  orders; provision for reestablishment of contracts and remobilisation and some  escalation primarily due to the contract being a LSTK contract rather than an  engineering, procurement and construction management contract.    Conclusion of DRC Government Review of Anvil's Mining Agreements    During July 2009 the Company finalised an amendment agreement with Gécamines  and the Government of the Democratic Republic of Congo ("DRC") on the revised  terms of its Mutoshi Joint Venture ("JV") Agreement. As a result, the Company's  interest in the Mutoshi JV has reduced from 80% to 70% and an additional Pas de  Porte payment of $14.4 million is payable to Gécamines in two tranches; $7.2  million is to be paid within 6 months of the amended agreement and the balance  ($7.2 million) within 18 months. The finalisation of the Mutoshi JV  negotiations, together with the amendment agreement reached on the Company's  Kinsevere Lease Agreement and the Dikulushi Mining Convention, brings to an end  the DRC Government's review of the Company's mining agreements.    Cancellation of Q2 Conference Call and Webcast    Please note that the second quarter 2009 conference call, previously scheduled  to take place at 8:30 a.m. (Canada, Toronto time) today, Thursday August 13,  2009, has been cancelled due to the recent update provided at the conference  call held on Monday August 10, 2009 on the agreement reached with Trafigura  regarding a $200 million funding package; the status of Kinsevere Stage II and  the Company's cash position.    Anvil Mining Limited is a 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.  Such "forward-looking statements" and "forward-looking information which may  include, but is not limited to the operation of the Kinsevere HMS plant, the  liquidation of the Company's available-for-sale investments and the Company's  plans for expansions of the Kinsevere copper mine. 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  Kinsevere copper mine will proceed as planned or that the transactions proposed  with Trafigura will be successfully completed within expected time limits and  budgets or that, when completed, the expanded production facility will operate  as anticipated.     <<                                    Appendix                 Key Financial and Production Data (unaudited)     -------------------------------------------------------------------------                                        3 months ended        6 months ended                                            June 30               June 30                                        2009       2008       2009       2008     -------------------------------------------------------------------------     Revenues: ($ millions)(1)           7.7       59.8        9.4      135.1     -------------------------------------------------------------------------     Operating (loss) / profit :      ($ millions)                      (7.7)      16.0      (22.1)      49.7     -------------------------------------------------------------------------     Provision for impairment:      ($ millions)                      (0.2)         -       (3.9)         -     Exploration expenditure      written off ($ millions)          (3.2)         -       (3.2)         -     -------------------------------------------------------------------------     Net (loss)/ Income:      ($ millions)                     (11.3)       8.5      (30.2)      30.0     -------------------------------------------------------------------------     PRODUCTION STATISTICS:     Consolidated Group     Copper produced in      concentrates (tonnes)            5,372     10,521      5,571     22,548     Silver produced in      concentrates (ounces)                -    248,816          -    731,472     Per Mine     Kinsevere mine     Ore mined (tonnes)                    -    578,350          -  1,520,731     Ore processed (tonnes)(2)        83,084     94,403     85,780    186,394     Copper grade (% Cu)                 7.9       10.0        8.0        9.6     Contained copper in ore      (tonnes)                         6,566      9,424      6,837     17,823     Recovery Cu (%)                    70.9       68.3       70.9       63.3     Copper produced in      concentrates (tonnes)            5,372      6,433      5,571     11,288     Copper produced in blister      (tonnes)                             -          -        461          -     -------------------------------------------------------------------------     Costs of production ($)     Operating cash costs per      tonne of concentrate      (ex mine gate) $/t                 484        278        734        321     -------------------------------------------------------------------------     Dikulushi mine     Ore mined (tonnes)                    -     33,159          -     63,470     Ore processed (tonnes)(3)             -    110,990          -    210,523     Feed grade (% Cu)                     -        3.1          -        4.2     Contained Copper in Ore      (tonnes)                             -      3,399          -      8,903     Recovery Cu (%)                       -       76.7          -       84.2     Copper produced in      concentrates (tonnes)                -      2,607          -      7,491     Silver produced in      concentrates (ounces)                -    248,816          -    731,472     Operating cash cost (ex mine      gate) (after silver credits)      ($/lb)                               -       0.73          -       0.39     -------------------------------------------------------------------------     Total cash costs from      operations ($/lb)                    -       1.24          -       0.89     -------------------------------------------------------------------------     Mutoshi mine     Ore mined (tonnes)                    -    200,035          -    287,991     Ore processed (tonnes)(4)             -    130,693          -    237,427     Copper grade (% Cu)                   -        3.7          -        4.0     Contained copper in ore      (tonnes)                             -      4,872          -      9,545     Recovery Cu (%)                       -       30.4          -       39.5     Copper produced in      concentrates (tonnes)                -      1,481          -      3,768     -------------------------------------------------------------------------     Costs of production: ($)     Operating cash costs per      tonne of concentrate      (ex mine gate)                       -      1,164          -        871     -------------------------------------------------------------------------     1. Includes provisional and final pricing adjustments and treatment and        refining charges.     2. Kinsevere commenced production in June 2007 as an HMS processing        operation.     3. Ore processed at Dikulushi relates to ore processed through the ball        mill and flotation plant.     4. Ore processed at Mutoshi and Kinsevere relates to ore processed        through the HMS plants.                    Consolidated Balance Sheets (unaudited)               (Expressed in thousands of United States dollars)                                                          June 30 December 31                                                             2009        2008                                                                $           $     ASSETS     Current assets     Cash and cash equivalents                             48,677      45,033     Restricted cash                                          964         871     Accounts receivable                                    9,478      24,243     Inventories                                           23,964      31,064     Available-for-sale investments                        12,635      24,032     Prepaid expenses and deposits                         33,142      51,258                                                         ---------------------                                                          128,860     176,501     Equity accounted investment                                -       1,320     Long-term inventory                                   10,651      10,651     Long-term receivable                                  13,411      12,464     Exploration and acquisition expenditure               49,790      51,352     Property, plant and equipment                        320,120     280,334                                                         ---------------------                                                          522,832     532,622                                                         ---------------------                                                         ---------------------     LIABILITIES     Current liabilities     Accounts payable and accrued liabilities              29,059      34,731     Income taxes payable                                     414         463     Other liabilities                                      1,759       2,460     Current portion of long-term debt                        535         362                                                         ---------------------                                                           31,767      38,016     Future income tax liability                           19,167      24,431     Long-term debt                                           195         321     Asset retirement obligations                          13,410      12,980                                                         ---------------------                                                           64,539      75,748     Non-controlling interest                               1,118       1,909                                                         ---------------------                                                           65,657      77,657                                                         ---------------------     Shareholders' equity     Equity accounts                                      412,444     383,419     Retained earnings                                     40,805      70,987     Accumulated other comprehensive income                 3,926         559                                                         ---------------------     Total shareholders' equity                           457,175     454,965                                                         ---------------------                                                          522,832     532,622                                                         ---------------------                                                         ---------------------          Consolidated Statements of Income and Comprehensive Income                                  (unaudited)                (Expressed in thousands of United States dollars                           except per share amounts)                                        3 months ended        6 months ended                                            June 30               June 30                                        2009       2008       2009       2008                                           $          $          $          $     Sales                             7,738     59,789      9,384    135,056     Operating expenses              (11,371)   (27,928)   (23,823)   (61,986)     Amortization                     (4,032)   (15,897)    (7,697)   (23,390)                                    ------------------------------------------                                      (7,665)    15,964    (22,136)    49,680                                    ------------------------------------------     Other income                        125      2,428        446      5,247     Share of loss in associates           -          -          -       (336)     Provision for impairment of      assets                            (258)         -     (4,935)         -     Exploration expenditure      written off                     (3,224)         -     (3,224)         -     General, administrative and      marketing                       (3,208)    (7,021)    (5,842)   (12,413)     Foreign exchange gains              905        334      1,545        382     Stock based compensation            254       (433)    (1,106)    (1,000)     Interest and financing fees        (280)       748       (518)      (857)                                    ------------------------------------------     (Loss) / earnings before      income tax and      non-controlling interest       (13,351)    12,020    (35,770)    40,703     Income tax recovery /      (expense)                        1,692     (3,712)     5,234     (9,309)     Non-controlling interest      share of loss / (gain)             310        208        354     (1,439)                                    ------------------------------------------     Net (loss) / income             (11,349)     8,516    (30,182)    29,955     Other comprehensive income,      net of  taxes     Net unrealized gain on      available-for-sale      investments                      3,367        200      3,367        342                                    ------------------------------------------     Total comprehensive (loss) /      income                          (7,982)     8,716    (26,815)    30,297                                    ------------------------------------------                                    ------------------------------------------     Basic (loss) / earnings      per share ($)                    (0.13)      0.12      (0.37)      0.42     Diluted (loss) / earnings      per share ($)                    (0.13)      0.12      (0.37)      0.42                Consolidated Statement of Cash Flows (unaudited)               (Expressed in thousands of United States dollars)                                        3 months ended        6 months ended                                            June 30               June 30                                        2009       2008       2009       2008                                           $          $          $          $     Cash flows from operating      activities     Net (loss) / earnings for      the period                     (11,349)     8,516    (30,182)    29,955     Items not affecting cash       Amortization                    4,032     15,897      7,697     23,390       (Gain) on derivative        instruments                        -       (960)         -          -       Share of loss in associates         -          -          -        336       (Gain) / Loss on sale of        assets                            52        (31)        42        257       Exploration expenditure        written off                    3,224          -      3,224          -       Provision for impairment        of assets                        258          -      4,935          -       Accretion expense                 215          -        430          -       Non-controlling interest        share of (loss) / income        (310)      (208)      (354)     1,439       Unrealized foreign exchange        losses                          (552)       467         59        550       Future tax                     (1,719)       530     (5,265)     3,063       Stock based compensation         (254)       433      1,106      1,000     Changes in non-cash working      capital                          1,025     (7,008)    11,806    (23,362)                                    ------------------------------------------                                      (5,378)    17,636     (6,502)    36,628                                    ------------------------------------------     Cash flows from investing      activities     Payments for property, plant      and equipment                   (9,649)   (55,956)   (27,297)   (95,198)     Proceeds from sale of assets        342         61        352        240     Payments for exploration and      evaluation expenditure             (42)   (10,592)    (1,108)   (15,359)     Proceeds of principal      repayments from investments     11,060      6,057     11,528      7,305                                    ------------------------------------------                                       1,711    (60,430)   (16,525)  (103,012)                                    ------------------------------------------     Cash flows from financing      activities     Proceeds from issue of shares      (net of issue expenses)         27,199        302     27,199        518     Proceeds from borrowings      (net of fees incurred)               -          -          -        800     Repayment of borrowings               -        (38)         -        (38)     Movement in restricted cash         (79)    (1,291)       (93)    (1,193)     Disbursements on behalf of      Dikulushi Trusts                  (434)    (2,304)      (437)    (3,099)                                    ------------------------------------------                                      26,686     (3,331)    26,669     (3,012)                                    ------------------------------------------     Net increase / (decrease) in      cash and cash equivalents       23,019    (46,125)     3,642    (69,396)     Cash and cash equivalents at      beginning of the period         25,617    192,498     45,033    215,754     Effects of exchange rate      changes on cash held in      foreign currencies                  41       (187)         2       (172)                                    ------------------------------------------     Cash and cash equivalents at      end of the period               48,677    146,186     48,677    146,186                                    ------------------------------------------     >>     %SEDAR: 00020549E    For further information: Craig Munro, Senior Vice President Corporate & CFO,  Tel: +61 (8) 9481 4700, craigm@anvilmining.com (Perth); Robert La Vallière,  Vice President Corporate Affairs, Tel: (Office) (514) 448-6664, (Cell) (514)  944-9036, robertl@anvilmining.com (Montreal); Website: www.anvilmining.com  CO: Anvil Mining Limited ST: Quebec NI: MNG PCS ERN -0- Aug/13/2009  7:36 GMT