Anvil Mining Reports Second Quarter 2011 Results - Construction of the Kinsevere Stage II SX-EW Plant Now Complete

Anvil Mining Reports Second Quarter 2011 Results - Construction of the Kinsevere Stage II SX-EW Plant Now Complete 
TSX, ASX: AVM
Common shares outstanding 157.9 million 


    All amounts are expressed in US dollars, unless otherwise stated.



MONTREAL, Aug. 12, 2011 /CNW Telbec/ - Anvil Mining Limited (TSX, ASX: AVM), ("Anvil" or the "Company"), today 
announced construction of the
 Kinsevere Stage II Solvent Extraction Electrowinning ("SX-EW") plant is
 essentially complete, with commissioning and ramp-up progressing in
 accordance with the Company's expectations. For the June quarter,
 start-up production of copper cathode totalled 3,376 tonnes.



The revenue and costs related to the production of cathode during the
 testing and commissioning phase were capitalized against the
 construction costs of the SX-EW plant in accordance with accounting
 standards. The Company anticipates that commercial production will be
 declared in the third quarter of 2011, at which time revenue, costs and
 depreciation of the Stage II SX-EW plant will be recognized in the
 income statement.



Importantly, provisional copper cathode assays received during the
 testing and commissioning phase, from a third party independent
 laboratory, confirm that the majority of cathode produced during the
 quarter conforms to LME Grade A chemical specifications.



Group copper production for the June quarter amounted to 5,999 tonnes,
 comprised of 2,623 tonnes of copper in concentrate and 3,376 tonnes of
 copper cathode. For the six months ended June 30, 2011, Group copper
 production totalled 9,315 tonnes, comprised of 5,939 tonnes of copper
 in concentrate and 3,376 tonnes of copper cathode.



The Kinsevere Stage I Heavy Media Separation ("HMS") plant operated
 until June 24, 2011, at which time it was placed on care and
 maintenance, allowing resources to focus on the commissioning and
 ramp-up of the SX-EW plant.



The Company generated revenues of $10.4 million from the sale of copper
 in concentrates and incurred an operating loss of $1.9 million for the
 June quarter due to lower volume and continued high mining costs in
 relation to the cutback program in the central pit at Kinsevere in
 order to prepare for Stage II processing and to provide waste material
 for the raising of the embankments at the Stage II tailings storage
 facility. The Company's net loss after tax for the June quarter was
 $0.8 million, equivalent to loss per share of $0.01 (basic).



The Company's consolidated financial statements for the three and six
 months ended June 30, 2011 and 2010 restated comparatives have been
 prepared in accordance with IFRS.



Key operating highlights for the second quarter 
    --  Net sales of copper in concentrate of $10.4 million compared to
        $14.5 million for the second quarter of 2010.
    --  Production of 2,623 tonnes of copper in concentrate, compared
        to 4,412 tonnes in the second quarter of 2010.
    --  Operating loss of $1.9 million, compared to $2.5 million for
        the second quarter of 2010.
    --  Net loss from continuing operations of $0.8 million (-$0.01 per
        share), compared to net profit of $15.1 million ($0.10 per
        share) for the second quarter of 2010.
    --  Average realized copper price of $4.09 per pound, compared to
        $2.95 per pound for the second quarter of 2010.
    --  Production of 3,376 tonnes of copper cathode.
    --  Copper cathode sales of 2,975 tonnes for revenue of $26.8
        million.
    --  Commencement of drilling program at the Kinsevere sulphide
        deposit.


Darryll Castle, President and CEO of Anvil, commented, "The construction
 of the Kinsevere Stage II 60,000 tonnes per year SX-EW plant is
 essentially complete. Our focus remains firmly on the commissioning and
 ramp-up of the Kinsevere Stage II SX-EW plant, which continues to
 progress well, with 2,023 and 3,173 tonnes of copper cathode for the
 months of June and July respectively, the majority of which has been
 independently assayed as LME Grade A quality. Given the current rate of
 progress with ramp-up and commissioning, it is anticipated that the
 5,000 tonnes per month design capacity will be achieved during the
 fourth quarter of 2011. With the performance of the Stage II SX-EW
 plant, along with the commencement of sulphide drilling at Kinsevere
 and the regional exploration effort, the Company is well placed for
 organic growth." 
Strategic Review Process 
Anvil has been informed by its largest shareholder, Trafigura Beheer
 B.V., that it considers its 39% ownership interest (fully diluted) in
 Anvil to be non-core and is considering alternatives to maximize the
 value thereof. In light of Trafigura's decision, the Board of Directors
 of Anvil has formed a Special Committee to review alternatives in order
 to maximize value for all shareholders. BMO Capital Markets has been
 retained by the Company to assist in this regard. 
Kinsevere Stage II Commissioning and Ramp-up 
Testing and commissioning of all modules is progressing in line with
 expectations and the Company anticipates that this will be completed in
 the third quarter of 2011, at which time it is expected that commercial
 production be declared and formal taking over of the Stage II SX-EW
 plant take place. 
With construction essentially complete, the Company remains firmly
 focused on the ramp-up of the plant to design capacity, which is
 expected during the fourth quarter of 2011. Consistency of supply of
 power from the grid will continue to be addressed both internally and
 with Société Nationale d'Electricité, the state owned electricity
 provider. 
As at July 31, 2011, $178 million of the $200 million budget for
 completion of construction had been spent, $123 million of which
 relates to the Engineering, Procurement and Construction (Lump Sum Turn
 Key) Contract (the "EPC Contract") with Ausenco Limited, $55 million to
 Owner's Costs, with a further $8 million committed for a total spent
 and committed amount of $186 million of the remaining $200 million
 required to complete the project. 
The Company continues to investigate an expansion of the capacity of the
 Stage II SX-EW Plant, which to date has involved review of various
 technical options. The Board has given management the approval to
 proceed with the ordering of long lead-time items.The long lead-time
 items will serve an additional purpose of debottlenecking the existing
 facility and allow it to exceed current design parameters. 
The complete June quarter 2011 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. 
Kinsevere SX-EW Cathode Production 
For the three months ended June 30, 2011, the Company produced 3,376
 tonnes of cathode, 2,975 tonnes of which were sold, for revenue of
 $26.8 million. 
         Kinsevere SX-EW operations      Three Months Ended 
                                            June 30, 2011 
Cathode revenue                        $'000              26,788 
Cathode allocated costs                $'000               9,085 
Net Cathode contribution allocated to  $'000              17,703
capital 
Cathode produced                      Tonnes               3,376 
Cathode grade                           % Cu               99.99 
Cathode copper sold                   Tonnes               2,975 


    Liquidity



As at July 31, 2011, Anvil had approximately $25.2 million in cash, all
 of which is held on deposit with international banks, and restricted
 cash of $7.3 million, the majority of which relates to cash collateral
 in connection with security in place under the Engineering, Procurement
 and Construction (Lump Sum Turn Key) Contract for the development of
 Kinsevere Stage II.



In addition to its cash, as at July 31, 2011, $43 million of the $100
 million Project Loan Facility (the "Loan Facility") provided by
 Trafigura, the proceeds of which are being used exclusively to meet
 costs associated with the completion of construction of Kinsevere Stage
 II, remains undrawn. The Company does not expect to make any further
 drawdown under the Loan Facility.



Appointment of Senior Executives



During the June quarter, the Company made two executive appointments to
 newly created positions, each of which further strengthened the
 management team and the Company's capacity to deliver its operational
 and growth objectives. Mr. Greg Morris was appointed to the position of
 Chief Operating Officer and Mr. Neil Caldwell was appointed to the
 position of Vice President Development and Sustainability. Both Mr.
 Morris and Mr. Caldwell are based in Johannesburg and report directly
 to the President and Chief Executive Officer. A summary of their
 respective experience is available on the Company's website (www.anvilmining.com) under the Corporate/Management 
section. The appointment of Mr. Morris
 and Mr. Caldwell follows the appointment of Mr. Darryll Castle to the
 position of President and CEO, effective May 1, 2011.



Second Quarter 2011 Results Conference Call and Webcast



A conference call will be held at 8:30 a.m. (Toronto time) on Friday
 August 12, 2011 coinciding with 8:30 p.m. (AWST - Australia, Perth
 time) on the same day to discuss the Company's second quarter 2011
 results.



The details to access the conference call and the live audio webcast are
 as follows:



Conference call: 



(Please call approximately five minutes prior to the scheduled start of
 the call).
    --  Toll-free within North America: 1-888-231-8191
    --  For local and overseas calling:    1-647-427-7450
    Live audio webcast of the conference call (listen mode only): 
    --  CNW Group website at:
        http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3608660 
        (English)
        http://www.cnw.ca/fr/webcast/viewEvent.cgi?eventID=3608660 
        (French)
    Replay Information (available for a period of 7 days):



The conference call will be recorded and a playback of the call will be
 available after the event by dialling:



Toll Free: 1-855-859-2056



Local: 416-849-0833, 514-807-9274, 613-667-0035, 403-451-9481,
 778-371-8506 or 902-455-3955.



Conference ID/Password number: 85078769 followed by the pound (#) key.



Anvil Mining Limited is a copper producer whose shares are traded 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 judgments of
 management regarding future events and results. Such "forward-looking
 statements" and "forward-looking information which may include, but is
 not limited to commissioning and ramp-up of the Kinsevere Stage II
 SX-EW plant, operation of the Kinsevere Stage II SX-EW plant, the
 financing of the development of Kinsevere, the Group's plans for
 expansions of the Kinsevere copper mine and exploration activities and
 the review of strategic alternatives. Many of these assumptions are
 based on factors and events that are not within the control of Anvil
 and there is no assurance they will prove to be correct. 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 2011. 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 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 be completed as planned, within expected time limits and
 budgets or that, when completed, the expanded Kinsevere Stage II copper
 project will operate as anticipated. There can be no assurance that the
 review will result in any specific transaction and no firm timetable
 has been set for the completion of this process. There can be no assurance that forward-looking information will prove 
to
 be accurate, as actual results and future events could differ
 materially from those anticipated in such information. Accordingly,
 readers should not place undue reliance on forward looking information.
                                     Appendix
                   Key Financial and Production Data (unaudited)
                                         3 Months Ended  6 Months Ended
                                                June 30         June 30
                                            2011   2010    2011    2010

FINANCIAL PERFORMANCE                                                  

Copper concentrate sales: ($ millions)      10.4   14.5    28.0    30.0

Operating income / (loss): ($ millions)    (1.9)    2.5     4.6     7.2

Net profit / (loss): ($ millions)          (0.8)   15.1    36.7    15.1

PRODUCTION STATISTICS                                                  

Consolidated Group                                                     

Copper produced in concentrates (tonnes)   2.623  4,412   5,939   8,505

Kinsevere mine (HMS)                                                   

Ore processed (tonnes)                    51,772 72,716 133,613 134,207

Copper grade (% Cu)                          5.6    7.3     5.3     7.9

Copper recovery - HMS (% Cu)                78.2   72.1    73.9    70.5

Concentrate grade - HMS and spirals (%      23.4   24.0    24.7    24.5
Cu)

Copper produced in concentrate - HMS and   2,623  4,412   5,939   8,505
Spiral (tonnes)

Copper sold (tonnes)                       2,149  4,872   5,331   9,296

Operating cash costs ( $/tonne               924    292     824     305
concentrate)

Kinsevere mine (SX-EW)                                                 

Ore processed (tonnes)                   146,790      - 146,790       -

Feed grade (% Cu)                            3.4      -     3.4       -

Cathode produced (tonnes)                  3,376      -   3,376       -

Cathode Grade (% Cu)                       99.99      -   99.99       -

Cathode sold (tonnes)                      2,975      -   2,975       -
                    Consolidated Balance Sheets (unaudited)
               (Expressed in thousands of United States dollars)
                                                  June 30      Dec 31
                                                     2011       2010
                                                           (restated)

ASSETS                                                               

Current assets                                                       

Cash and cash equivalents                          28,428      56,415

Restricted cash                                     6,808       7,314

Trade and other receivables                        27,947      12,988

Inventories                                        27,460      14,060

Other financial assets                                 75         182

Current assets classified as held for sale              -       1,204
                                                   90,718      92,163

Non-current assets                                                   

Restricted cash                                       513         513

Trade and other receivables                        14,311      14,253

Other financial assets                             25,752           -

Investment in associate                                 -      11,927

Inventories                                        14,250      13,109

Exploration and evaluation expenditure             60,722      60,657

Property, plant and equipment                     516,763     488,703
                                                  632,311     589,162

Total assets                                      723,029     681,325
                                                                     

LIABILITIES                                                          

Current liabilities                                                  

Trade and other payables                           25,243      29,508

Financial liabilities                              18,641      38,669

Borrowings                                         13,060       4,649

Current income taxes                                   62          21

Provisions                                          2,680       2,634
                                                   59,686      75,481
                                                                     

Non-current liabilities                                              

Borrowings                                         38,978      31,829

Provisions                                         21,417      20,991

Deferred tax liabilities                              499      10,766
                                                   60,894      63,586

Total liabilities                                 120,580     139,067

Net assets                                        602,449     542,258
                                                           
                                                  June 30 December 31
                                                     2011        2010
                                                           (restated)

Shareholders' equity                                                 

Share capital                                     519,465     480,787

Share based payment reserve                        10,382       9,413

Retained earnings                                  92,894      54,944

Other reserves                                   (16,134)           -

Capital and reserves attributable to owners of    606,607     545,144
Anvil Mining Limited

Non-controlling interests                         (4,158)     (2,886)

Total equity                                      602,449     542,258


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
                                    2011       2010     2011       2010
                                         (restated)          (restated)

Continuing operations                                                  

Revenue from sale of goods        10,402     14,529   27,966     30,015

Cost of goods sold              (12,311)   (11,994) (23,363)   (22,825)

Gross (loss) / profit            (1,909)      2,535    4,603      7,190

Other income                          93      3,920   30,694      4,952

Gain / (loss) on derivative          193      (757)    (107)      (409)
instruments

Exploration costs                   (65)          -     (65)          -

General, administrative and      (6,195)    (4,234) (10,331)    (8,109)
marketing costs

Share of (loss)/gain in                -      (226)    1,116      (226)
associate

Fair value gain on warrants        1,240      9,912      793      4,198
carried at fair value through
profit and loss

Other expenses                   (1,011)      (540)  (1,100)      (495)

(Loss) / profit before finance   (7,654)     10,610   25,603      7,101
items and tax

Finance income                        34        577    1,358        992

Finance costs                      (209)      (501)    (477)    (1,015)

Finance items - net                (175)         76      881       (23)

(Loss)/ profit before tax        (7,829)     10,686   26,484      7,078

Income tax benefit                 6,997      4,410   10,194      8,005

(Loss) / profit for the period     (832)     15,096   36,678     15,083
from continuing operations
                                                                       

Discontinued operation                                                 

Profit from discontinued               -      5,582        -      5,448
operation

(Loss) / profit for the period     (832)     20,678   36,678     20,531
                                                                       

Other comprehensive income /                                           
(loss)

Changes in fair value of        (16,134)      (233) (16,134)      (284)
available-for-sale investments

Total comprehensive (loss) /    (16,966)     20,445   20,544     20,247
income for the period
                                                                       

(Loss) / profit attributable                                           
to:

Owners of Anvil Mining Limited      (67)     21,826   37,950     22,269

Non-controlling interests          (765)    (1,198)  (1,272)    (1,738)
                                   (832)     20,678   36,678     20,531

Total comprehensive (loss) /                                           
income attributable to:

Owners of Anvil Mining Limited  (16,201)     21,643   21,816     21,985

Non-controlling interests          (765)    (1,198)  (1,272)    (1,738)
                                (16,966)     20,445   20,544     20,247

Profit / (loss) per share from                                         
continuing operations:

Basic profit / (loss) per share   (0.01)       0.10     0.23       0.10
($)

Diluted profit / (loss) per       (0.01)       0.10     0.23       0.10
share ($)
                Consolidated Statement of Cash Flows (unaudited)
                (Expressed in thousands of United States dollars)
                          3 Months Ended June 30 6 Months Ended June 30
                              2011          2010     2011          2010

Cash flows from operating                                              
activities

(Loss)/profit for the        (832)        15,096   36,678        15,083
period from continuing
operations

Adjustments for:                                                       

  Depreciation and           4,154         4,245    7,717         9,064
  amortization

  Share of loss/(gain) of        -           226  (1,116)           226
  associate

  Loss / (gain) on           (193)           757      107           409
  derivative instruments

  Provision for                  -       (3,904)        -       (4,809)
  impairment of asset

  Gain on sale of asset      (126)             -  (1,764)             -

  Non cash finance cost        209           519      418           999

  Gain on discontinuation        -             - (28,842)             -
  of equity accounting

  Provision for bad or           -           450        -           450
  doubtful debts

  Net exchange             (1,072)           123    (703)         (218)
  differences

  Fair value gain on       (1,240)       (9,912)    (793)       (4,198)
  warrants

  Deferred tax             (6,997)       (4,410) (10,194)       (8,005)

  Share based payment          367           114      335           382
  expense
                           (5,730)         3,304    1,843         9,383

Changes in non-cash       (20,222)         3,580 (36,689)       (1,398)
working capital
                          (25,952)         6,884 (34,846)         7,985

Cash flows used in                                                     
investing activities

Payments for property,     (8,093)      (23,490) (27,672)      (57,021)
plant and equipment

Payments for exploration      (65)           (5)     (65)         (227)
expenditure

Payments as security             -       (6,460)        -       (6,460)
deposit

Proceeds from repayments         -           112        -           112
from investment
                           (8,158)      (29,843) (27,737)      (63,596)

Cash flows (used in) /                                                 
provided by financing
activities

Proceeds from issue of       1,964            42   20,078         (229)
shares (net of issue
expenses)

Payment of loan                  -         (255)    (795)         (531)
origination costs

Movement in restricted         514           127      505            44
cash

Payment of borrowings         (50)          (71)    (101)         (140)

Receipts from borrowings         -             -   15,000             -

Shares purchased - ESSIP         -       (1,238)        -       (1,238)
                             2,428       (1,395)   34,687       (2,094)

Cash flows from                                                        
discontinued operations

Cash flows used in
operating activities             -           513        -             -

Cash flows from financing        -          (30)        -             -

Net decrease in cash and
cash equivalents from
discontinued operations          -           483        -             -

Net increase / (decrease)
in cash and cash
equivalents               (31,682)      (23,871) (27,896)      (57,705)

Cash and cash equivalents   60,176        87,440   56,415       121,234
at beginning of the
period

Effects of exchange rate      (66)         (109)     (91)          (69)
changes on cash held in
foreign currencies

Cash and cash equivalents
at end of the period for
continuing operations       28,428        63,460   28,428        63,460

Cash and cash equivalents   28,428        63,460   28,428        63,460
at end of the period
    
    Philippe Monier                                                                           Robert La Vallière

Vice President Corporate & CFO                                                             Vice President Corporate 
Affairs

Tel: +61 (8) 9481 4700                                                                    Tel: (Office) +1 (514) 448 
6664, (Cell) +1 (514) 944 9036

Email: philippem@anvilmining.com Email: robertl@anvilmining.com
(Perth)                                                                                   (Montréal)
    Website:www.anvilmining.com 

  



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CO: ANVIL MINING LIMITED
ST: Quebec
NI: MNG PCS ERN FIN 

-0- Aug/12/2011 09:50 GMT


 
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