Board Approves Construction of a $238 million 60,000 tonnes per year SX-EW Project at Kinsevere



    TSX, ASX: AVM
    Common shares outstanding 57.7 million(*)
    All amounts are expressed in US dollars, unless otherwise stated.

    MONTREAL, April 23 /CNW/ - Anvil Mining Limited (TSX, ASX: AVM), ("Anvil"
or "the Company") is pleased to announce that the Board of Directors has
approved the construction of a Stage II 60,000 tonnes per year Solvent
Extraction and Electrowinning copper facility ("SX-EW") at the Kinsevere
project (95%) located 27 km north of Lubumbashi, the provincial capital of the
Katanga Province of the Democratic Republic of the Congo ("DRC").
    The feasibility study for the project was carried out by the Anvil
development group using Lycopodium Engineering Pty Ltd of Perth, Australia for
the process plant portion of the study, and other specialist consultants for
environmental and social impact assessments, metallurgical test-work, geology,
mining and resource evaluation. The capital cost including contingency is
estimated at $238 million, with a construction period of 24 months. Using a
10% discount rate for an initial 15 year-mine life and a copper price of $1.20
per pound, the feasibility study demonstrates a Net Present Value ("NPV") of
$89 million and a robust Internal Rate of Return ("IRR") of 17%, with a
payback period of 6.6 years. Using copper prices of $2.00/lb and $3.00/lb, the
NPVs increase to $527 million and $1,075 million respectively and the IRRs
increase significantly to 46% and 76% respectively.
    The Stage I development of Kinsevere, which comprises an open pit mining
operation, the construction of a Heavy Media Separation ("HMS") plant and an
Electric-Arc Furnace ("EAF") is approximately 86% complete, with the HMS plant
expected to be finished in May 2007. It is expected that the HMS plant and the
EAF will be superseded, in mid-2009, by the new 60,000 tonnes per year Stage
II SXEW plant, with the production of LME Grade A quality copper cathode
directly at the minesite.
    Bill Turner, President and CEO of the Company said: "We are very pleased
to be in a position to immediately start the process of calling for tenders
for detailed design and construction from several experienced, reputable
engineering companies and to quickly move the Stage II development forward. We
hope to commence construction work during the third quarter of 2007. The
Kinsevere feasibility study indicates a low cash cost, open pit, copper mining
and processing operation which is expected to generate robust returns using a
conservative long-term copper price. Kinsevere will become our most important
asset and cash flow generator for the foreseeable future, based on the current
Measured and Indicated Resources. As the Phase 2 drilling program continues on
the neighbouring Tshifufiamashi and Kinsevere Hill deposits, we are confident
that our exploration team will be able to define significant additional
resources."

    The feasibility study

    Underlying assumptions and key economic results

    The underlying assumptions applied in the feasibility study to key
aspects of the project and its economic results were as follows:

    
    Capital cost - including
     contingency                         $238 million
    Construction period                  24 months
    Copper price used                    $1.20 per pound
    Project life                         15 years
    Ore mined (tonnes)                   24,038,000
    Ore to waste ratio                   0.96
    Ore processed (tonnes)               24,039,000
    Average copper head grade            4.16%
    Average copper recovery              92.3%
    Tonnes of copper produced            890,400
    Mine operating cost (at mine gate)   $0.53 per pound of Cu produced
    Total cash cost - incl. transport
     & royalties                         $0.76 per pound of Cu produced
    Total cost - incl. amortization
     & finance                           $0.88 per pound of Cu produced
    Corporate tax                        30%
    Royalty payment to Gécamines         2% (copper equiv. delivered to mill)
    Royalty payment to DRC government    2% (NSR)

    Based on these assumptions and applying a discount rate of 10%, the key
results arising from the feasibility study were:

    Net Present Value at 10%
     discount rate                       $89 million
    Internal Rate of Return              17%
    Payback period                       6.6 years
    Cash cost per Cu pound produced
     (mine gate)                         53 cents lb
    Cash cost per Cu pound after
     transport & royalties               76 cents lb
    

    Sensitivity to movements in the copper price

    The feasibility study used a copper price of $1.20 per pound, a price
that is consistent with market forecasts of the long-term copper price. The
financial outcomes associated with Stage II are highly sensitive to variation
in the copper price, with every ten cent move in the price per pound
generating an impact of $55 million on the NPV and approximately 4% on the
IRR.

    Economic evaluation

    An economic model was developed, for analysis of Kinsevere Stage II, on
the basis of a 15 year mine life, however based on current Measured and
Indicated resources and an extensive drilling program at Kinsevere planned for
2007, it is likely that the life of mine will be increased.
    A summary of NPV, IRR and Payback period outcomes under different copper
price scenarios is shown below:

    
    -------------------------------------------------------------------------
    Copper Price          NPV(10)                             Payback Period
    ($ per pound)       ($ million)              IRR (%)              (years)
    -------------------------------------------------------------------------

     1.20                    89                    17                    6.6
    -------------------------------------------------------------------------
     1.40                   198                    25                    5.3
    -------------------------------------------------------------------------
     1.60                   308                    33                    4.4
    -------------------------------------------------------------------------
     1.80                   417                    40                    3.9
    -------------------------------------------------------------------------
     2.00                   527                    46                    3.6
    -------------------------------------------------------------------------
     3.00                 1,075                    76                    2.7
    -------------------------------------------------------------------------
    

    Capital costs

    Development of capital cost estimates has assumed that the majority of
the infrastructure required for Stage II will have been constructed during
Stage I. It has also been assumed that the Company will appoint a single
Engineering, Procurement, Construction and Management ("EPCM") engineer to
coordinate development of the project. The breakdown of the major components
of the capital expenditures, including contingency, is as follows:

    
    -------------------------------------------------------------------------
    Cost item                                                             $m
    -------------------------------------------------------------------------
    Site establishment costs                                            37.0
    SX-EW treatment plant                                              120.0
    Infrastructure and plant services                                   31.7
    Tailings storage facility                                            4.6
    HT power supply upgrade & assoc. infrastructure                     20.1
    Administration and pre-production costs                             24.4
    -------------------------------------------------------------------------
    Total                                                              237.8
    -------------------------------------------------------------------------
    

    Operating costs

    Operating cost estimates for Stage II have been developed from the
Company's in-country experience, using historical data from the Company's
operations at Dikulushi and Kulu and recent and ongoing construction works on
Kinsevere Stage I. Labour costs include all applicable allowances for both
national and expatriate staff, while overheads such as travel, light vehicle
operating costs, general consumables, etc. were based on a doubling of the
same costs for the operating budget for Stage I.

    Metallurgy

    The Kinsevere resource is comprised of three deposits: Tshifufia,
Tshifufiamashi and Kinsevere Hill. A comprehensive metallurgical test-work
program was performed on drill core samples from the oxide zones of the
Tshifufia, Tshifufiamashi and Kinsevere Hill deposits, with particular
emphasis on the results from the Tshifufia samples, as this is the largest
deposit and is expected to supply ore feed to the plant during the early years
of the project. The test-work concluded that the mineralization has favourable
characteristics for treatment using an SX-EW process.

    Environment and Social Impact Assessments

    As part of the Kinsevere feasibility study, an Environment Impact
Assessment ("EIA") and Social Impact Assessment ("SIA") have been undertaken
with the aim of determining the baseline conditions for Stage II, the
potential impacts associated with the project and developing an Environment
Management Plan, Monitoring Programs and Emergency Response and Contingency
Plans. These reports will be submitted to the DRC Government during the third
quarter.
    A flora survey at Kinsevere identified the presence of various plants of
conservation importance and to mitigate the project impact, it is recommended
that a floral reserve be established to protect the local flora population.
For the SIA, a survey of 216 households in local villages (71% of the
households) surrounding the Kinsevere project indicated that the community
overwhelmingly (98%) considered that the project would be beneficial for the
area.
    During the development and construction of Stage II over a two year
period, the Company will have a peak workforce of 1,500. When the SX-EW plant
is operational in mid-2009, it will employ approximately 750 permanent
employees, mainly from the surrounding villages and from the city of
Lubumbashi, the capital city of the Katanga Province.

    Kinsevere mineral resources

    In January 2007, the Company released the results of the Kinsevere Phase
2 drilling program carried out during 2006. The previous Kinsevere Mineral
Resource estimate announced in November 2005 was based on a Phase 1 drilling
program of approximately 8,000 metres carried out on the Tshifufia,
Tshifufiamashi and Kinsevere Hill deposits. The 17,220 metre 2006 Phase 2
drilling program, which focused entirely on the Tshifufia deposit, resulted in
a substantial increase in the Measured, Indicated and Inferred resources.
Kinsevere mineral resource estimates at December 31, 2006 are shown below.

    
    -------------------------------------------------------------------------
                                     Total                  Total
                        Tonnes      Copper      Copper     Cobalt     Cobalt
                                   Grade (%)   (tonnes)   Grade (%)  (tonnes)
    -------------------------------------------------------------------------
    Measured           6,010,000        4.4    266,700       0.29     17,200
    -------------------------------------------------------------------------
    Indicated         14,070,000        4.3    598,000       0.19     26,600
    -------------------------------------------------------------------------
    Total Measured
     & Indicated      20,080,000        4.3    864,700       0.22     43,800
    -------------------------------------------------------------------------
    Inferred          20,918,000        3.4    716,400       0.06     13,000
    -------------------------------------------------------------------------
    Note:  A NI 43-101 Technical Report on Kinsevere was filed on SEDAR at
           www.sedar.com on February 23, 2007
    

    Phase 2 drilling on the neighboring Tshifufiamashi and Kinsevere Hill
deposits is now being undertaken. It is expected that this exploration work
will improve the Company's confidence in the Kinsevere Mineral Resources,
particularly at Kinsevere Hill and Tshifufiamashi, which will result in a
re-estimation of the Mineral Resources during the second half of 2007.

    Anvil Mining Limited is an unhedged copper and silver producer whose
shares are listed for trading on the Toronto Stock Exchange (as common shares)
and the Australian Stock Exchange (as CDIs) under the symbol AVM. It has
majority interests in, and operates the Dikulushi copper-silver mine and the
Kulu copper tailings operation in the Katanga Province of the DRC. In
addition, the Company is currently developing the Kinsevere project as the
Company's third mine in the DRC.

    Additional Notes: The information in this news release that relates to
in-situ Mineral Resources is based on information compiled by Gerry Fahey of
FinOre Pty Ltd. Gerry Fahey is a Chartered Professional and 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 qualify as a
Qualified Person in terms of the Canadian National Instrument 43-101. Gerry
Fahey consents to the inclusion of such information in this news release in
the form and context in which it appears.

    Caution Regarding Forward Looking Statements: The forward-looking
statements made in this news release are based on assumptions and judgments of
management regarding future events and results. Such forward-looking
statements, including but not limited to those with respect to the operations
of the construction and development of a 60,000 tonnes per year SX-EW plant
and Electric-Arc Furnace and power grid at Kinsevere and its capital
expenditures and estimated future production and operating cash costs involve
known and unknown risks, uncertainties, and other factors which may cause the
actual results, performance or achievements of the Company to be materially
different from any anticipated future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the actual market prices of copper and silver, the actual
results of current exploration, the actual results of future mining,
processing and development activities, changes in project parameters as plans
continue to be evaluated, as well as those factors disclosed in the Company's
filed documents.

    %SEDAR: 00020549E




For further information:

For further information: Craig Munro, Vice President Corporate & Finance
and CFO, Tel: +61 (8) 9481 4700, Email: craigm@anvilmining.com (Perth); Robert
La Vallière, Vice President Investor Relations, Tel: (Office) (514) 448-6664,
(Cell) (514) 944-9036, Email: robertl@anvilmining.com (Montréal), Website:
www.anvilmining.com

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