Anvil Mining Reports Third Quarter 2009 Results

    
    TSX, ASX: AVM
    Common shares outstanding 117.5 million
    All amounts are expressed in US dollars, unless otherwise stated.
    

MONTREAL, Nov. 12 /CNW Telbec/ - Anvil Mining Limited (TSX, ASX: AVM), ("Anvil" or the "Company"), today announced a net loss for the third quarter ended September 30, 2009, of $0.2 million ($0.00 per share), compared to a net loss of $17.3 million (-$0.24 per share) for the third quarter of 2008. Net sales for the third quarter of 2009 totalled $18.1 million, compared to $42.3 million for the corresponding quarter in 2008. Cash flows from operating activities, before working capital movements were $6.6 million ($0.06 per share), compared to a negative cash flow of $1.0 million (-$0.01 per share) for the third quarter of 2008. Copper production for the third quarter of 2009 and for year-to-date totalled 5,865 tonnes and 11,436 tonnes of copper respectively.

As at November 12, 2009, Anvil had approximately $67.1 million in cash, $16.9 million in available-for-sale investments and $8.2 million of receivables, the majority of which it expects to realize during the fourth 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 $17.1 million that relates to the Kinsevere Stage II development.

The Company's 2009 third quarter results represent a significant improvement on the results of the first and second quarters of 2009, primarily as a result of the performance of the Kinsevere Heavy Media Separation ("HMS") plant and the reduced impact of one-off factors associated with the cessation of operations at the Company's Dikulushi, Mutoshi and Kinsevere mines during the fourth quarter of 2008, which had a significant negative impact on the Company's first and second quarter results.

The Company recommenced operation of the Kinsevere HMS plant on March 27, 2009, with the primary aim of generating sufficient cash flow to enable the Company to sustain a positive cash flow until such time as the Kinsevere Stage II Solvent Extraction - Electrowinning ("SX-EW") plant becomes operational. Based on forecast production and an assumed average realized copper price of $2.25 / lb for the remainder of 2009 and $2.50 for 2010, the HMS plant is expected to generate sufficient cash to allow the Group to maintain a positive operating cash flow.

Since recommencement of operations, the HMS plant has produced 11,436 tonnes of copper contained in concentrate and generated gross revenue of $27.4 million, incurred cash operating expenses of $9.5 million for a net cash flow from HMS operations of $17.9 million. The Group has utilized these funds to pay expenses of $8.2 million related to care and maintenance of the Dikulushi and Mutoshi mines, corporate overheads, exploration and social development, providing a net cash flow of $9.7 million, since recommencement of operation of the HMS plant. During the third quarter the Group achieved a net cash flow of $9.1 million.

Bill Turner, President and CEO of Anvil, commented, "The performance of the Kinsevere HMS plant since recommencement of operations has exceeded expectations. The combined effects of the restart of the HMS plant and the cost reduction initiatives implemented in late 2008 and early 2009, have positioned the Company to be able to operate with a positive cash flow up until Kinevere Stage II comes on line."

Mr. Turner further commented, "The agreement reached with Trafigra in early August 2009 for a combined debt and equity financing of $200 million represents a fully financed solution for the development of Kinsevere Stage II. Since then we have been working closely with Ausenco to be positioned for a rapid recommencement of construction and fabrication works on Kinsevere Stage II. We have also been in regular discussion with Trafigura and are close to completing definitive agreements in connection with the second Tranche of the $200 million financing, the details of which will be submitted for shareholder approval at a meeting expected to be held in early December 2009. Trafigura represents an excellent long-term strategic 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 third 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.

    
    Key points for the third quarter

    - Sales of $18.1 million.

    - Operating profit of $4.2 million.

    - Net loss of $0.2 million ($0.00 per share).

    - Positive cash flows from operating activities, before working capital
      movements, of $6.6 million ($0.06 per share).

    - Net unrealized gain related to mark-to-market movement in the value of
      available-for-sale investments of $3.7 million which has been
      recognised in shareholders' equity.

    - Quarterly production of 5,865 tonnes of copper.

    - Positive cash flow from Kinsevere HMS operating activities of
      $9.1 million (excluding payments for staff redundancies and other
      one-off costs).

    - Completion of the first tranche of the private placement with Trafigura
      Beheer B.V. ("Trafigura") for proceeds of approximately $32 million.

    - Appointment of Mr. Jeremy Weir to the Company's board of directors.

    Key points for the year to date

    - Positive cash flow from operating activities, since recommencement of
      the Kinsevere HMS plant of $9.7 million (excluding payments for staff
      redundancies and other one-off costs).

    - Net loss of $30.4 million (-$0.34 per share).

    - Negative cash flows from operating activities, before working capital
      movements, of $11.7 million (-$0.13 per share).

    - Copper production of 11,436 tonnes.

    Near term objectives (next three months)

    - Continued positive cash flow from operation of the Kinsevere HMS plant.

    - Shareholder approval of the transaction with Trafigura.

    - Completion of the remaining engineering and design works for Kinsevere
      Stage II.

    - Continued build up of early works program at Kinsevere Stage II.

    - Execution of Lump Sum Turnkey ("LSTK") contract with Ausenco.

    - Appointment of owner's representative for Kinsevere Stage II
      construction works.

    Longer term objectives (2010 onwards)

    - Completion of construction and commissioning of the Kinsevere
      Stage II SX-EW plant.

    - Commencement of further drilling on the Mutoshi project and the
      Kinsevere sulphide resource.

    - Completion of a pre-feasibility study for a Mutoshi Stage II SX-EW
      project.

    - Completion of preliminary studies on the mining and processing of the
      sulphide resource at Kinsevere.
    

Kinsevere HMS Production

The Company recommenced operation of the Kinsevere HMS plant on March 27, 2009, with feed to the HMS plant sourced from Run of Mine ("ROM") stockpile. By the end of the third quarter, the ROM stockpile was almost fully depleted and as a result, during August 2009 the Company recommenced mining in the Central Pit.

For the September quarter, the HMS plant produced 21,901 tonnes of concentrate, grading 26.8% copper for 5,865 tonnes of copper and since recommencement of operation in late March 2009, the HMS plant has produced 43,557 tonnes of concentrate, grading 26.3% for 11,436 tonnes of copper. The HMS plant is expected to produce approximately 16,000 tonnes of copper contained in concentrates through to the end of 2010, at an operating cash cost at the mine gate of less than $0.50/lb Cu (inclusive of sunk costs).

In addition to producing a coarse concentrate from the HMS plant, the Company also produces a fine grained, slightly lower grade concentrate from a spirals circuit, through which the fines ((less than)0.6mm) which are screened off before the HMS circuit, are treated.

Table 1 below sets out the details of the performance of the HMS plant for the third quarter and year to date 2009.

    
                 Table 1. Performance of Kinsevere HMS Plant
    -------------------------------------------------------------------------
                                                        Third       March 27,
                                                Quarter ended        2009 to
                                                 September 30,  September 30,
                                                         2009           2009
    -------------------------------------------------------------------------
    Ore mined (tonnes)                                132,493        132,493
    -------------------------------------------------------------------------
    Ore processed - HMS  (tonnes)                      80,730        166,510
    -------------------------------------------------------------------------
    Feed grade - HMS (% Cu)                               8.0            8.0
    -------------------------------------------------------------------------
    Contained copper - HMS (tonnes)                     6,443         13,320
    -------------------------------------------------------------------------
    Copper recovery - HMS (%)                            80.6           75.9
    -------------------------------------------------------------------------
    Copper produced in concentrate -
     HMS (tonnes)                                       5,192         10,045
    -------------------------------------------------------------------------
    Copper produced in concentrate -
     Spirals (tonnes)                                     673          1,391
    -------------------------------------------------------------------------
    Concentrate grade - HMS and Spirals (% Cu)           26.8           26.3
    -------------------------------------------------------------------------
    Total copper produced in concentrate - HMS
     & Spirals (tonnes)                                 5,865         11,436
    -------------------------------------------------------------------------
    Operating cash cost - ex mine gate ($ per
     tonne of concentrate)                                249            300
    -------------------------------------------------------------------------
    

Kinsevere Stage II

Having received proceeds during the third quarter of approximately $32 million from the first tranche of the $200 million financing agreed with Trafigura, the Company commenced various early start activities in order to better position the Company for a rapid mobilisation of contractor and sub-contractor personnel and ensure a timely recommencement of full-scale construction and fabrication works at Kinsevere Stage II, once the contract with Ausenco has been signed. Key activities have included:

    
    - Engineering and Design - work is progressing well, with approximately
      56% of the works completed as at October 31, with the remaining works
      expected to be completed in early December 2009.

    - Contract documentation - a term sheet that sets out the major
      commercial terms of a LSTK contract has been agreed with Ausenco and
      negotiations to finalise the LSTK contract are continuing.

    - Early Works Program - the Company has begun an Early Works Program, the
      key elements of which include: refurbishment of the Stage II camp and
      supporting infrastructure; procurement of long lead time items; and
      commencement by Ausenco of negotiations with sub-contractors.

    - Ausenco Project Risk Review - a risk review was carried out during
      September 2009 at which representatives from Ausenco, the Company,
      Trafigura and Green Team International ("GTI") participated.

    - Peer Review - the Company engaged GTI to conduct a Peer Review focusing
      on the project schedule, manpower requirements, cost estimates and the
      contractor's capabilities, which is expected to be finalized during the
      fourth quarter of 2009.

    - Appointment of an Owner's Representative - discussions are well
      advanced in relation to the appointment of an Owner's Representative
      and the Company expects to be in position to make such an appointment
      immediately following the execution of the LSTK contract after the
      meeting of shareholders to approve the transaction with Trafigura.
    

The Company estimates that the timeframe for completion of construction, dry commissioning, and hydraulic testing for readiness to receive ore is approximately 12-15 months from award of contract.

Third Quarter Results Conference Call and Webcast

The Company will hold a conference call at 8:30 a.m. (Canada, Toronto time) today, Thursday November 12, 2009, coinciding with 9:30 p.m. (AWST - Australia, Perth time) on the same day, to discuss the results.

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

Conference call: 1-416-646-3097

(Please call approximately five minutes prior to the scheduled start of the call).

Live audio webcast of the conference call (listen mode only):

    
    - CNW Group website at:
    http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2862860 (English)
    http://www.cnw.ca/fr/webcast/viewEvent.cgi?eventID=2862860 (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 1-416-640-1917, Reservation number 4178908 followed by the pound # key.

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        9 months ended
                                         September 30          September 30
                                       2009       2008       2009       2008
    -------------------------------------------------------------------------
    Sales: ($ millions) Copper-
     silver and copper concentrate
     sales                             18.1       42.3       27.5      177.4
    -------------------------------------------------------------------------
    Operating profit / (loss):
     ($ millions)                       4.2       (2.6)     (17.9)      47.1
    -------------------------------------------------------------------------
    Provision for impairment:
     ($ millions)                      (2.4)      (5.5)      (7.3)      (5.5)
    Exploration expenditure written
     off: ($ millions)                    -       (2.5)      (3.2)      (2.5)
    -------------------------------------------------------------------------
    Net (loss)/ Income:
     ($ millions)                      (0.2)     (17.3)     (30.4)      12.6
    -------------------------------------------------------------------------

    PRODUCTION STATISTICS:

    Consolidated Group
    Copper produced in
     concentrates (tonnes)            5,865     11,318     11,436     33,866
    Silver produced in
     concentrates (ounces)                -    189,867          -    921,339

    Per Mine
    Kinsevere mine
    Ore mined (tonnes)              132,493    727,736    132,493  2,248,467
    Ore processed (tonnes)           80,730    104,414    166,510    290,808
    Copper grade (% Cu)                 8.0        9.1        8.0        9.4
    Contained copper in ore
     (tonnes)                         6,443      9,467     13,320     27,290
    Recovery Cu (%)                    80.6       75.1       75.9       67.4
    Copper produced in
     concentrates - HMS (tonnes)      5,192      7,113     10,045     18,401
    Copper produced in concentrate
     - Spirals (tonnes)                 673          -      1,391          -
    Copper produced in concentrate
     - HMS and Spirals (tonnes)       5,865      7,113     11,436     18,401
    Copper produced in blister
     (tonnes)                             -        161          -        161
    -------------------------------------------------------------------------
    Costs of production ($)

    Operating cash costs per
     tonne of concentrate
     (ex mine gate)  $/t                249        194        300        270
    -------------------------------------------------------------------------
    Dikulushi mine
      Ore mined (tonnes)                  -     15,265          -     81,288
    Ore processed (tonnes)                -    134,994          -    345,517
    Feed grade (% Cu)                     -        2.2          -        3.4
    Contained Copper in Ore
     (tonnes)                             -      2,934          -     11,637
    Recovery Cu (%)                       -       61.8          -       80.0
    Copper produced in
     concentrates (tonnes)                -      1,813          -      9,304
    Silver produced in concentrates
     (ounces)                             -    189,867          -    921,339
    Operating cash cost (ex mine
     gate) (after silver credits)
     ($/lb)                               -       2.89          -       0.59
    -------------------------------------------------------------------------
    Total cash costs from operations
     ($/lb)                               -       3.47          -       1.10
    -------------------------------------------------------------------------
    Mutoshi mine
    Ore mined (tonnes)                    -    154,602          -    428,361
    Ore processed (tonnes)                -    135,772          -    373,199
    Copper grade (% Cu)                   -        3.8          -        3.9
    Contained copper in ore (tonnes)      -      5,152          -     14,624
    Recovery Cu (%)                       -       46.4          -       41.1
    Copper produced in concentrates
     (tonnes)                             -      2,392          -      6,160
    -------------------------------------------------------------------------
    Costs of production: ($)
    Operating cash costs per tonne
     of concentrate (ex mine gate)        -        984          -        914
    -------------------------------------------------------------------------


                   Consolidated Balance Sheets (unaudited)
              (Expressed in thousands of United States dollars)

                                                 September 30    December 31
                                                         2009           2008
                                                            $              $
    ASSETS
    Current assets
    Cash and cash equivalents                          69,008         45,033
    Restricted cash                                     1,009            871
    Accounts receivable                                13,314         24,243
    Inventories                                        17,744         31,064
    Available-for-sale investments                     14,967         24,032
    Prepaid expenses and deposits                      33,577         51,258
                                             --------------------------------
                                                      149,619        176,501
    Equity accounted investment                             -          1,320
    Long-term inventory                                10,875         10,651
    Long-term receivable                               15,256         12,464
    Exploration and acquisition expenditure            50,319         51,352
    Property, plant and equipment                     333,126        280,334
                                             --------------------------------
                                                      559,195        532,622
                                             --------------------------------
                                             --------------------------------
    LIABILITIES
    Current liabilities
    Accounts payable and accrued liabilities           24,428         34,731
    Income taxes payable                                    -            463
    Other liabilities                                   1,449          2,460
    Current portion of long-term debt                     282            362
                                             --------------------------------
                                                       26,159         38,016
    Future income tax liability                        18,968         24,431
    Other non-current liability                         6,589              -
    Long-term debt                                        149            321
    Asset retirement obligations                       13,626         12,980
                                             --------------------------------
                                                       65,491         75,748
    Non-controlling interest                              761          1,909
                                             --------------------------------
                                                       66,252         77,657
                                             --------------------------------
    Shareholders' equity
    Equity accounts                                   444,742        383,419
    Retained earnings                                  40,572         70,987
    Accumulated other comprehensive income              7,629            559
                                             --------------------------------
    Total shareholders' equity                        492,943        454,965
                                             --------------------------------
                                                      559,195        532,622
                                             --------------------------------
                                             --------------------------------


         Consolidated Statements of Income and Comprehensive Income
                                 (unaudited)
               (Expressed in thousands of United States dollars
                          except per share amounts)

                                ---------------------------------------------
                                        3 Months Ended        9 Months Ended
                                         September 30          September 30
                                       2009       2008       2009       2008
                                ---------------------------------------------
                                          $          $          $          $
    Sales                            18,089     42,320     27,473    177,376
    Operating expenses              (10,114)   (37,371)   (33,939)   (99,357)
    Amortization                     (3,776)    (7,579)   (11,473)   (30,969)
                                ---------------------------------------------
                                      4,199     (2,630)   (17,939)    47,050
                                ---------------------------------------------

    Other income                        447      1,581        893      6,828
    Share of loss in associates           -       (555)         -       (891)

    Provision for impairment
     of assets                       (2,381)    (5,517)    (7,316)    (5,517)
    Exploration expenditure
     written off                          -     (2,500)    (3,224)    (2,500)
    General, administrative and
     marketing                       (1,504)    (5,721)    (7,346)   (18,134)
    Foreign exchange
     (losses) / gains                  (856)      (481)       691        (99)
    Stock based compensation           (339)      (784)    (1,444)    (1,784)
    Interest and financing fees        (244)      (215)      (762)    (1,072)
                                ---------------------------------------------
    (Loss) / Earnings before
     income tax and
     non-controlling interest          (678)   (16,822)   (36,447)    23,881

    Income tax credit /
     (expense)                          611       (969)     5,845    (10,278)
    Non-controlling interest
     share of (gain) / loss            (166)       455        187       (984)
                                ---------------------------------------------
    Net (loss) / income                (233)   (17,336)   (30,415)    12,619

    Other comprehensive income
    Net unrealized gain on
     available-for-sale
     investments                      3,703     (6,069)     7,070     (5,727)
                                ---------------------------------------------
    Total comprehensive
     income / (loss)                  3,470    (23,405)   (23,345)     6,892
                                ---------------------------------------------
                                ---------------------------------------------

    Basic (loss) / earnings
     per share ($)                     0.00      (0.24)     (0.34)      0.18
    Diluted (loss) / earnings
     per share ($)                     0.00      (0.24)     (0.34)      0.18


               Consolidated Statement of Cash Flows (unaudited)
              (Expressed in thousands of United States dollars)

                                ---------------------------------------------
                                        3 Months Ended        9 Months Ended
                                         September 30          September 30
                                       2009       2008       2009       2008
                                ---------------------------------------------
                                          $          $          $          $
    Cash flows from operating
     activities
    Net (loss) / earnings for
     the period                        (233)   (17,336)   (30,415)    12,619
    Items not affecting cash
      Amortization                    3,776      7,579     11,473     30,969
      Share of loss in associates         -        555          -        891
      (Gain) / Loss on sale of
       assets                          (195)        20       (156)       277
      Exploration expenditure
       written off                        -      2,500      3,224      2,500
      Provision for impairment
       of assets                      2,381      5,517      7,316      5,517
      Accretion expense                 216        189        646      1,079
      Non-controlling interest
       share of (loss) / income         167       (455)      (187)       984
      Unrealized foreign exchange
       losses / (gains)                 314     (1,492)       376       (942)
      Future tax                       (199)     1,126     (5,464)     4,189
      Stock based compensation          338        784      1,444      1,784
    Changes in non-cash working
     capital                         (4,710)    30,137      7,096     12,915
                                ---------------------------------------------
                                      1,855     29,124     (4,647)    72,782
                                ---------------------------------------------
    Cash flows from investing
     activities
    Payments for property, plant
     and equipment                  (13,522)   (41,376)   (40,819)  (137,464)
    Proceeds from sale of assets        824        225      1,176        465
    Payments for exploration and
     evaluation expenditure          (1,083)    (8,587)    (2,191)   (23,946)
    Proceeds of principal
     repayments from investments      1,103      5,605     12,631     12,910
    Payments for build up of
     low-grade ore stockpiles             -     (3,164)         -     (9,304)
                                ---------------------------------------------
                                    (12,678)   (47,297)   (29,203)  (157,339)
                                ---------------------------------------------
    Cash flows from financing
     activities
    Proceeds from issue of shares
     (net of issue expenses)         31,960        193     59,159        711
    Proceeds from borrowings
     (net of fees incurred)               -          -          -        800
    Repayment of  borrowings           (252)       (79)      (252)      (117)
    Movement in restricted cash         (44)         -       (137)    (1,193)
    Disbursements on behalf of
     Dikulushi Trusts                  (523)    (2,448)      (960)    (5,547)
                                ---------------------------------------------
                                     31,141     (2,334)    57,810     (5,346)
                                ---------------------------------------------
    Net increase / (decrease)
     in cash and cash
     equivalents                     20,318    (20,507)    23,960    (89,903)
    Cash and cash equivalents
     at beginning of the period      48,677    146,186     45,033    215,754
    Effects of exchange rate
     changes on cash held in
     foreign currencies                  13       (194)        15       (366)
                                ---------------------------------------------
    Cash and cash equivalents at
     end of the period               69,008    125,485     69,008    125,485
                                ---------------------------------------------
    

%SEDAR: 00020549E

SOURCE Anvil Mining Limited

For further information: 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

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