Anvil Reports Updated Economic Analysis of Kinsevere Stage II


    <<
                                                               TSX, ASX: AVM
                                     Common shares outstanding 150.4 million
    All amounts are expressed in US dollars, unless otherwise stated.
    >>


MONTREAL, Jan. 27 /CNW Telbec/ - Anvil Mining Limited (TSX, ASX: AVM), ("Anvil" 
or the "Company") AMCK Mining SPRL ("AMCK"), a Joint Venture company formed by 
Anvil (95%) and Mining Company of Katanga SPRL (5%) today reported an updated 
analysis of its Stage II 60,000 tonnes per year Solvent Extraction and 
Electrowinning ("SX-EW") development at its Kinsevere Copper Project, located 
approximately 30 km north of Lubumbashi, the provincial capital of the Katanga 
Province in the Democratic Republic of Congo ("DRC"). The updated economic 
analysis follows completion of a new Mineral Reserve estimate, revised mine 
plan and completion of a Lump Sum Turnkey ("LSTK") contract with Ausenco 
Limited ("Ausenco"). 
AMCK has an exclusive "Contrat d'Amodiation" (Lease Agreement) with La Générale 
des Carrières et des Mines ("Gécamines"), the title holder of the mineral 
rights. In January 2009, the Company reached agreement with Gécamines and the 
Government of the DRC on the terms of the Lease Agreement. 
Key outcomes of the updated economic analysis of Kinsevere Stage II: 


    <<
    - A Net Present Value ("NPV"), at 95% equity of $683 million after tax;
    - Internal Rate of Return of 79%;
    - A payback period of less than 2.5 years after final loan drawdown;
    - Cash cost of $0.89/lb Cu (C1);
    - Total operating cost of $1.33/lb Cu (C3);
    - Commercial production expected to be achieved during the second quarter
      of 2011;
    - Proven and Probable Mineral Reserve of 20.8 million tonnes at an
      average grade of 3.9% total copper ("TCu") available for Stage I and
      Stage II processing;
    - Contained acid soluble copper of approximately 690,000 tonnes;
    - Peak mill throughput of 1.6 million tonnes per annum; and
    - Operational life of 14 years.
    >>


Bill Turner, President and CEO of the Company said: "Kinsevere Stage II is the 
Company's flagship project, with outstanding economic returns, reflecting the 
exceptional quality of these copper deposits located in the renowned Katangan 
Copperbelt. It is pleasing to see the construction works at Kinsevere starting 
to gather pace and we look forward to completing this project and commencing 
commissioning in early 2011. During the last two years, a significant amount of 
work has been undertaken to further enhance our understanding of the Kinsevere 
ore bodies and we are pleased to have completed an updated Mineral Reserve 
estimate. The sulphide portion of the Kinsevere orebodies beneath the defined 
oxide reserves remains open at depth and as optimization studies continue and 
with further drilling, there is scope to increase the sulphide resources". 
Applying a discount rate of 10%, the economic analysis has been based on a 
Stage II project construction capital cost of $400 million, commissioning 
commencing in the first quarter of 2011, a six-month ramp-up period to full 
production, a Mineral Reserve estimate of 20.8 million tonnes with an average 
grade of 3.3% acid soluble copper ("ASCu"), an average head grade of 4.0% ASCu 
over an initial eight year period followed by a period of reclamation from 
lower grade stockpiles, an open pit waste to ore ratio of around 1.2:1, an 
average copper price of $2.44/lb, corporate tax in the DRC of 30%, and royalty 
payments of 2.5% of gross revenues to Gécamines and 2% Net Smelter Return 
("NSR") to the DRC Government. 
The outcomes associated with the economic analysis are highly sensitive to 
variations in copper price, with every 10% change in the copper price resulting 
in a change of $120 million in the NPV. Movements in other key variables have a 
less significant impact. For example, a 10% change to capital expenditure 
results in only a 2% change in the discounted cash flow, whilst a 10% change in 
the operating costs results in a 7% change in the discounted cash flow. 
Capital Cost Estimate 
The capital cost estimate for construction of Kinsevere Stage II of $400 
million includes $200 million already spent. The LSTK contract with Ausenco was 
signed on January 22, 2010 for a total value of $130 million. Owner's Costs, 
which include purchase and transportation of the remaining capital equipment, 
spares, first fills, initial training and pre-commissioning costs and 
associated taxes and duties amount to $58 million, which together with 
contingency of $12 million, brings the total remaining cost to $200 million. 
At December 31, 2009 the Company had unaudited cash reserves of $121 million, 
available-for-sale securitised investments of $18 million and receivables of 
$18 million. The Company is well advanced in discussions with a syndicate of 
banks to refinance the $100 million loan facility established with Trafigura 
Beheer B.V. ("Trafigura") in December 2009, to an amount of $140 million. The 
additional funding is sought in order to ensure that the Company has sufficient 
funding available to meet the Stage II ramp-up costs that are expected to be 
incurred during the first half of 2011, the pas de porte payment due to 
Gécamines for the Company's Mutoshi project and the recommencement of 
exploration and development activity. 
Kinsevere Stage II Operating Parameters 
The revised life of mine plan has a Stage II mining life of approximately eight 
years, during which time approximately 18 million tonnes of ore will be mined 
to produce a total of approximately 631,500 tonnes of contained copper metal. 
Processing of material from long-term stockpiles is expected to continue for 
another six years following the completion of mining of the current reserves. 
The peak ore processing rate is 1.6 million tonnes per year. A summary of the 
key operating parameters for Stage II is shown in Table 1. 


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              Table 1: Summary of Kinsevere Stage II Operations
    -------------------------------------------------------------------------
    Description                                                     Stage II
    -------------------------------------------------------------------------
    Ore mined (million tonnes)                                          18.0
    -------------------------------------------------------------------------
    Average grade (%ASCu)                                                3.5
    -------------------------------------------------------------------------
    Waste mined (million tonnes)                                        22.4
    -------------------------------------------------------------------------
    Waste to ore ratio                                                 1.2:1
    -------------------------------------------------------------------------
    Processing life (years)                                               14
    -------------------------------------------------------------------------
    Ore processed (million tonnes)(1)                                   21.9
    -------------------------------------------------------------------------
    Average processed grade (%ASCu)                                      3.2
    -------------------------------------------------------------------------
    Recovery (%)(2)                                                     91.9
    -------------------------------------------------------------------------
    Cu metal produced (tonnes)                                       648,500
    -------------------------------------------------------------------------
    1. Total ore processed exceeds the total ore mined due to reclamation
       from existing long-term stockpiles (refer to Table 3), plus floats and
       effluent stockpiled from Stage I processing.
    2. Average recovery over the term of Stage II reflects a period of
       reduced recovery during production ramp-up.
    >>
    Operating Cost Estimate



Table 2 lists the updated Stage II unit cash operating cost estimates, in real 
terms.
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               Table 2: Average Stage II Unit Operating Costs
    -------------------------------------------------------------------------
    Average Stage II Operating Costs                        Cash Costs ($/lb)
    -------------------------------------------------------------------------
    Mining and Technical Services Costs                                $0.15
    Processing Costs                                                   $0.34
    Maintenance Costs                                                  $0.07
    Administrative Costs                                               $0.11
    -------------------------------------------------------------------------
    Cash Cost at Mine Gate                                             $0.67
    -------------------------------------------------------------------------
    Transport and Marketing Costs                                      $0.20
    Export Duties                                                      $0.02
    -------------------------------------------------------------------------
    Total C1 Cash Costs                                                $0.89
    -------------------------------------------------------------------------
    Royalties - Paid                                                   $0.11
    -------------------------------------------------------------------------
    Depreciation & Amortisation                                        $0.33
    -------------------------------------------------------------------------
    Total C3 Operating Cost                                           $1.33
    -------------------------------------------------------------------------
    >>
    Progress with Kinsevere Stage II



Following the receipt in September 2009 of the Tranche 1 funds of $32 million 
relating to the $200 million financing agreed with Trafigura, an Early Works 
Program was initiated on the Kinsevere Stage II project, with progress being 
made in a number of areas since this date, including:
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    - Steel erection - 213 tonnes of pre-fabricated pipe rack steel have been
      erected, representing approximately 9% of the total requirement.
    - Contracts - security, catering and earthworks contracts negotiated by
      Ausenco are in an advanced stage of documentation and are expected to
      be finalised shortly.
    - Critical path issues - steel for the sulphuric acid tanks has been
      ordered and fabrication of a variety of other tanks is near completion.
    - Stockpiles of cement, sand and aggregate - orders and initial payments
      for the total stock requirement of cement and additives for the
      remainder of the project have been made and the first two of four
      deliveries of cement were received in November 2009.
    - New orders - purchase orders have been prioritised according to
      schedule requirements and are being prepared and committed.
    - Transportation of goods in storage - equipment items held in storage
      since Kinsevere Stage II was placed on hold have been reviewed and
      categorised according to priority. Delivery of these goods to site is
      underway and the Company expects to take delivery of the majority of
      this equipment before March 31, 2010.
    - Work permit applications - Ausenco has assumed full responsibility for
      obtaining work permits and the process is underway for identified
      staff.
    - Camp refurbishment - significant progress has been made in relation to
      the junior and senior accommodation, laundry and messes.
    >>


Group Five Projects ("Group Five") is being engaged by Ausenco to undertake the 
Kinsevere Stage II construction and fabrication works. Prior to November 2008 
when the development of Stage II was placed on hold, Group Five was contracted 
to perform this role and as a result has a sound understanding of the Stage II 
development. In addition Group Five has an established presence in the DRC and 
is well equipped to manage logistical, regulatory and other issues associated 
with operating in the DRC. 
Group Five and Ausenco have already begun mobilising to site and it is expected 
that by February 2010, more than 100 Group Five personnel and 15 Ausenco 
personnel will be on site. 
The engineering and design works which recommenced during the third quarter of 
2009 are approximately 95% complete, with 2,057 drawings of the total of 2,160 
now completed. In addition, a substantial amount of vendor data has been 
received. 
With the commencement of the Early Works Program, the engagement of Group Five, 
the near completion of the engineering and design works and the mobilisation 
already underway, the Company is well positioned to allow for a timely 
recommencement of full-scale construction and fabrication works at Kinsevere 
Stage II. 
Proven and Probable Reserve Estimate at Year-end 2009 
The Proven and Probable Mineral Reserve estimate at year-end 2009 shown in 
Table 3 totals 20.8 million tonnes at an average copper grade of 3.3% ASCu, 
representing approximately 690,000 tonnes of contained acid soluble copper. The 
copper price used for the Mineral Reserve estimate was $1.43/lb Cu flat and the 
cut-off grade was determined as 0.7% ASCu. The Mineral Reserve estimate was 
derived from conventional mine planning processes including Whittle 
optimisation, detailed pit designs and life of mine production scheduling. The 
total Mineral Reserve includes additional previously mined ore located on 
various long-term stockpiles, available for either Heavy Media Separation 
("HMS") or SX-EW processing, as shown in Table 3. 


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         Table 3: Kinsevere Copper Project: Mineral Reserve Estimate
    -------------------------------------------------------------------------
        Kinsevere oxide Mineral Reserve statement as at December 31, 2009
                             (based on $1.43/lb Cu)
    -------------------------------------------------------------------------
    Deposit          Category     Tonnes         TCu        ASCu    Contained
                                    (M t)         (%)         (%)  ASCu (k t)
    -------------------------------------------------------------------------
    Tshifufia        Proven         7.14        4.12        3.51       250.5
                     --------------------------------------------------------
                     Probable       4.40        5.09        4.05       178.3
    -------------------------------------------------------------------------
    Tshifufiamashi   Proven         1.65        3.56        3.21        52.8
                     --------------------------------------------------------
                     Probable       1.20        4.02        3.68        44.3
    -------------------------------------------------------------------------
    Kinsevere Hill   Proven            -           -           -           -
                     --------------------------------------------------------
                     Probable       4.02        3.42        3.07       123.5
    -------------------------------------------------------------------------
    Subtotal Pits    Proven and
                      Probable     18.41        4.14        3.53       649.5
    -------------------------------------------------------------------------
    Stockpiles       Proven            -           -           -           -
                     --------------------------------------------------------
                     Probable       2.40        1.99        1.67        40.1
    -------------------------------------------------------------------------
    Subtotal         Proven and
     Stockpiles       Probable      2.40        1.99        1.67        40.1
    -------------------------------------------------------------------------
    Total Pits and   Proven and
     Stockpiles       Probable     20.81        3.89        3.31       689.5
    -------------------------------------------------------------------------
    Note: The Total Mineral Reserve is available for both HMS and
          SX-EW processing.
    >>


The Mineral Reserve has declined from 2008, as a result of ore extraction to 
feed the Kinsevere HMS plant, together with mineral resource model density and 
grade estimation differences. 
Measured and Indicated Resource Estimate at Year-end 2009 
The Measured and Indicated Mineral Resource for oxidised mineralisation at year-end 2009 (Table 4), using a 0.7% TCu cut-off grade is estimated at 25.7 million 
tonnes at an average grade of 3.1% ASCu, representing approximately 807,000 
tonnes of contained acid soluble copper. The Proven and Probable Mineral 
Reserves included within the Measured and Indicated Mineral Resource are for 
oxidised mineralisation. The oxide and sulphide Inferred Mineral Resource is 
estimated at 14.2 million tonnes at an average grade of 3.6% TCu for 
approximately 507,000 tonnes of additional contained total copper. 


    <<
         Table 4: Kinsevere Copper Project: Mineral Resource Estimate
    -------------------------------------------------------------------------
       Kinsevere oxide Mineral Resource statement as at December 31, 2009
                                 (0.7%TCu cutoff)
    -------------------------------------------------------------------------
    Deposit          Category     Tonnes         TCu        ASCu    Contained
                                    (M t)         (%)         (%)  ASCu (k t)
    -------------------------------------------------------------------------
    Tshifufia        Measured       7.37        4.30        3.64       268.4
                     --------------------------------------------------------
                     Indicated      5.81        5.00        3.95       229.3
    -------------------------------------------------------------------------
    Tshifufiamashi   Measured       1.97        3.45        3.06        60.3
                     --------------------------------------------------------
                     Indicated      4.18        2.70        2.08        87.0
    -------------------------------------------------------------------------
    Kinsevere Hill   Measured          -           -           -           -
                     --------------------------------------------------------
                     Indicated      6.41        2.88        2.53       162.2
    -------------------------------------------------------------------------
    Total Oxide      Measured and
     Deposits         Indicated    25.74        3.78        3.14       807.1
    -------------------------------------------------------------------------
      Kinsevere sulphide Mineral Resource statement as at December 31, 2009
                                (0.7%TCu cutoff)
    -------------------------------------------------------------------------
    Deposit          Category     Tonnes         TCu        ASCu    Contained
                                    (M t)         (%)         (%)  ASCu (k t)
    -------------------------------------------------------------------------
    Tshifufia        Measured       0.06        2.16        0.97         0.6
                     --------------------------------------------------------
                     Indicated      3.09        3.99        2.60        80.4
    -------------------------------------------------------------------------
    Tshifufiamashi   Measured          -           -           -           -
                     --------------------------------------------------------
                     Indicated      0.61        2.40        1.59         9.7
    -------------------------------------------------------------------------
    Total Sulphide   Measured and
     Deposits         Indicated     3.76        3.70        2.41        90.6
    -------------------------------------------------------------------------
    Total Oxide and
     Sulphide        Measured and
     Deposits         Indicated    29.50        3.77        3.04       897.7
    -------------------------------------------------------------------------
    >>


The Mineral Reserve estimate has been classified and reported using the 
guidelines of the Australasian Code for Reporting of Exploration Results, 
Mineral Resources and Ore Reserves (the JORC Code, 2004). These guidelines are 
generally consistent with those required by Canadian National Instrument 43-101 
- Standards of Disclosure for Mineral Projects ("NI 43-101"). The estimate was 
prepared by Mr Anthony Cameron of A & J Cameron and Associates Pty Ltd, who is 
a Qualified Person in accordance with NI 43-101. 
The Mineral Resource estimate was prepared under the supervision of Mr Gerry 
Fahey of CSA Global Pty Ltd who is a Qualified Person in accordance with NI 43-101. All samples were prepared for assay and analysed at the ALS Chemex 
laboratory in Johannesburg or at the ActLabs Pacific laboratory in Perth, 
Australia, and standard QA/QC checks were applied throughout the drilling 
program, including the submission of certified reference materials, duplicate 
samples and blanks. 
A revised NI-43-101 Technical Report will be lodged on the SEDAR website at 
www.sedar.com within the prescribed timeframe. 
The shares of Anvil Mining Limited are listed for trading on the Toronto Stock 
Exchange (as Common Shares) and the Australian Securities Exchange (as CDIs) 
under the symbol AVM. For further information on Anvil, please refer to the 
Anvil website at www.anvilmining.com. 
Additional Notes: Information in this news release regarding Mineral Resources 
is based on information compiled by Gerry Fahey of CSA Global Pty Ltd and David 
Gray, formerly of Anvil. Gerry Fahey is a Member of the Australasian Institute 
of Mining and Metallurgy and a Member of the Australian Institute of 
Geoscientists, and has sufficient experience which is relevant to the style of 
mineralization and type of deposit under consideration, and to the activity he 
is undertaking, to act as a Qualified Person as defined by NI 43-101. 
Information in this news release regarding Mineral Reserves has been compiled 
by Anthony Cameron of A & J Cameron and Associates. Anthony Cameron is a Fellow 
of the Australasian Institute of Mining and Metallurgy and has sufficient 
experience which is relevant to the style of mineralization and type of deposit 
under consideration, and to the activity he is undertaking, to act as a 
Qualified Person as defined by NI 43-101. Other technical information in this 
news release has been reviewed by the following Anvil personnel: Michael Lawlor 
who is the Company's Manager of Group Technical Services and a Fellow of the 
Australasian Institute of Mining and Metallurgy and is a Qualified Person as 
defined by NI 43-101. Messrs Fahey, Gray, Cameron and Lawlor have consented to 
the inclusion of such information in this news release in the form and context 
in which it appears. 
Caution Regarding Forward Looking Statements: This news release contains 
"forward-looking information" that is based on assumptions and judgements of 
management regarding future events and results. Such forward-looking 
information includes, but is not limited to, statements regarding the updated 
economic analysis of Kinsevere Stage II (including NPV, internal rate of 
return, payback period, cash costs, capital cost estimates, mill throughput and 
mine life), the future price of copper and updated mineral reserve and mineral 
resource estimates for the Kinsevere Copper Project. The purpose of forward-looking information is to provide the reader with information about 
management's expectations and plans. Readers are cautioned that forward-looking 
information involves known and unknown risks, uncertainties and other factors, 
many of which are not in the control of Anvil, 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 price of copper, the actual results of future 
mining, processing and development activities, 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, including under 
the heading "Risk Factors" in the Company's most recently filed AIF, which is 
available under the Company's profile on SEDAR at www.sedar.com. Although Anvil 
has attempted to identify important factors that could cause actual results to 
differ materially from those contained in forward-looking information, there 
may be other factors that cause results not to be as anticipated, estimated or 
intended. There can be no assurance that the Stage II expansion of the 
Kinsevere copper mine will proceed as planned and within expected time limits 
and budgets or that, when completed, the expanded Kinsevere Copper Project will 
operate as anticipated. 
%SEDAR: 00020549E 
For further information: Craig Munro, Senior Vice President Corporate & CFO, 
+61 (8) 9481 4700, craigm@anvilmining.com (Perth); Robert La Vallière, Vice 
President Corporate Affairs, (Office): (514) 448 6664, (Cell): (514) 944 9036, 
robertl@anvilmining.com (Montréal); www.anvilmining.com 
CO: ANVIL MINING LIMITED
ST: Quebec
NI: MNG PCS FIELD
-0- Jan/27/2010  8:24 GMT
 
 
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