Transcript Mirabaud - MMG Limited | Home

Kinsevere Stage II
Construction
Investor Presentation
February - March 2009
Disclaimer
This presentation contains historical and forward-looking statements. The
forward-looking statements involve risks and uncertainties particularly with
respect to reserves and resources, development and expansion plans, production
levels, production costs, political events and operational capabilities. Forward
looking statements appearing in this presentation represent management’s
current estimates and these may change significantly as new information comes
to hand.
The information contained in this presentation has been obtained by Anvil from
its own records and from other sources believed to be reliable, however no
representation or warranty is made as to its accuracy or completeness.
2
Anvil in the DRC
▪ Three mines: Dikulushi1,
Kinservere2, and Mutoshi3
▪ Kinsevere is a world class
high-quality project set to
produce 60ktpa of copper
cathode with significant
equity already invested
▪ Strategy to preserve cash in
current low Cu price market
implemented quickly
▪ Zero debt; Cash4 as of January 31, 2009: US$34.5 million5
▪ Current face value of the investments is ≈US$47 million4 with a carrying value in
the books of ≈US$24 million (in accordance with mark to market rules).
1. Care and Maintenance Dec.’08.
2. HMS Plant on Care and Maintenance Dec.’08.
3: HMS operation completed; will move to next phase.
4. Dollar figures are unaudited.
3
5. The substantial portion of the restructuring costs estimated in Nov. 2008 are behind us.
Corporate Overview
Directors
Senior Management
John Sabine
Bill Turner
Robert La Vallière
President and CEO
Vice President Corporate Affairs
Craig Munro
Jeff Knuckey
Snr. Vice President
Corporate and CFO
Vice President Human Resources
Toby Bradbury
Stuart McKenzie
Vice President Operations, DRC
Corporate Secretary
Director (non-exec)
Paul Chare
Lui Evangelista
Kenneth Brown
General Manager and Project Director
Kinsevere Stage II
Financial Controller
Chairman (non-exec)
Bill Turner
President and CEO
Peter Bradford
Director (non-exec)
Tom Dawson
Director (non-exec)
Capital Structure and Trading
4
▪ TSX and ASX listed: AVM
▪ Average daily volume: 380k
▪ Issued shares: 71.2M
▪ Market cap: ≈C$80M
DRC as an Investment Destination
▪
Highest grade openpitable copper deposits
in the World
▪ New Mining Code 2003 (World Bank)
▪ Newly elected Democratic Government
(2007)
▪ Significant Multilateral and Bilateral
engagement
▪ Over $3 billion raised publicly since 2005
for mining projects
▪ DRC Mining Review nearing completion
5
120kv hydro-electric transmission line & access route
DRC Experience
Anvil has significant experience in developing and operating
projects in the DRC.
Tonnes of
Contained Copper
60,000
Kinsevere
Stage I
Mine Startup
47,633
50,000
42,574
41,000
40,000
Mutoshi
Stage I HMS
Operation
30,000
20,000
Dikulushi
Stage II
Dikulushi
Mine
Startup
12,073
Kinsevere
19,200
Mutoshi
11,716
10,000
Dikulushi
1,213
0
2002
6
2003
2004
2005
2006
2007
2008
DRC Mining Review Process
▪ Process commenced in mid 2007
▪ Agreement with Gécamines and DRC Government achieved in Jan 09;
–
7
Kinsevere: no change to the equity interest – Anvil (95%). The amended agreement
includes:
–
additional entry premium of $15M
–
Gécamines to have one senior management appointment in JV and three
members on an Advisory Committee
–
increased employment opportunity for Gécamines
–
preferred use of local suppliers
–
Dikulushi Mining Convention: no change
–
Mutoshi: ongoing discussions with Gécamines to complete Amendment Agreement
Cash Conservation
Anvil has taken a proactive approach to conserving cash following
the sharp falls in copper prices.
Site
Description
Cash Conservation
Kinsevere
Major open pit mining operation, HMS
processing plant, two electric-arc
furnaces and a future 60ktpa SX-EW
plant
Mining suspended in Dec 08
Anvil’s first mining operation; in
production since 2002
Concentrate production and underground
development suspended. Placed on care
and maintenance in Dec 08
Dikulushi
Transition from Open Pit to
Underground
Mutoshi
8
Construction of Stage II SX-EW plant
placed on hold
Stage I – HMS Cu concentrate in
production since Q4‘05.
Mining and processing activities
suspended in 2008
Need to move to a Stage II SX-EW;
Resource upgrade in Q2‘09
Regional exploration discontinued
Near Term Objectives
▪
Finalise debt funding and recommence
construction of Kinsevere Stage II
SX-EW
▪
Continue to shepherd the Company’s
cash reserves
▪
Complete Kinsevere resource and
reserves update
▪
Finalise Mining Review documentation
for Mutoshi
Kinsevere Central pit
9
Kinsevere
▪
25 years - Lease Agreement with
Gécamines
▪
Amendment Agreement with Gécamines
finalised January 2009
▪
Measured and Indicated Resources
(Year-end 2008):
–
–
–
▪
10
oxide: 798kt ASCu (Acid soluble)
sulphide: 139kt total Cu
average oxide grade: 3.6% Cu
Expected operating parameters:
–
annual production 60kt Cu cathode
–
cash cost of production:
–
C1 $0.88/lb
–
C3 $1.18/lb
–
mine life of 10+ years
C1: Cash cost at mine gate + realisation costs + transportation and marketing
C3: C1 cash cost + royalties + depreciation & amortization
High Grade
Best intersection (sulphide + oxide) 357m @ 4.6% Cu.
11
Long Life
Large deposit supporting at least 10 years of mine life.
12
Kinsevere Stage II Outlook
▪
Funding
– funds
spent or committed:
– estimated
▪
cost to complete:
US$200 million
Timetable1
Debt funding
finalised
May 09
First
drawdown
June 09
Recommence on-site
construction works
Aug-Sep 09
1. Timetable contingent on securing financing in Q2‘09
13
US$180 million
Initial SX-EW
Cu production
Project
completion
Q2 2010
Q3 2010
Construction
Project status
% Completed
Engineering & design
80%
Civil construction
Mechanical construction
90%
10%
Ordering of major capital items
Plant and equipment on site
▪
▪
▪
▪
▪
14
Complete 2.55 MW ball mill
Crusher and apron feeder
50% of electro-winning cells
50% of cathode plates and anodes
Tailings dam liner
80%
Plant and equipment in transit to site
▪
Cathode stripping machine
▪ 50% of cathode plates and anodes
▪ Pin bed clarifier
▪ All transformers and rectiformers
Kinsevere Stage II as at January 2009
EAF Building
Stage II Tails Storage Facility
Low Grade Stockpile
Mine Contractor Workshops
Junior Camp
Present ROM
Stage I HMS Plant
+2% Ore Stockpile
Construction Offices
Stage II Crusher Area
Leach Tanks
Stores & Workshops
Grinding Mill
E/W Cell Manufacturing Bldg
CCD Tanks
PLS & RAF Ponds
Re-agents Store
HG Thickener
High Grade SX
Low Grade SX
Electrowinning Building
Stores Laydown (Future
SX Expansion)
15
E/W Cells awaiting installation
Dikulushi
▪
On Care & Maintenance since Dec 08
–
postponement of the U/G development
– uneconomical in present Cu price environment
▪
Start-up conditional upon Cu market improvement
–
resource open at depth and to the east
– drilling program at depth
16
Dikulushi processing plant
Mutoshi
▪
Scope drilling program completed
across Mutoshi tenement in 2008
–
Significant Cu and Co
mineralisation
▪
Potential for large bulk oxide mining
and processing operation
▪
Engineering Cost Study completed
on transition from existing HMS to
SX-EW processing
▪
Further metallurgical test work and
infill drilling required
17
Anvil tenements cover 29% of the
Kolwezi Klippe
Mutoshi tenement area: 105km2
Social & Community Development Programs
▪
Anvil committed to sharing the benefits with the
local community and making a meaningful
difference
▪
Anvil leading the way amongst international
mining companies in the DRC
▪
US$18M invested in the DRC to date:
18
–
9 Schools (3,740 students)
–
Refurbishing of the Kilwa Hospital and the
Mwangeji Hospital; 2 medical clinics
–
71 fresh water wells (in over 60 villages)
–
Over 100km of road refurbishment work
–
Support to at least 5,400 small-scale farmers
New Lumekite School
Refurbished Kilwa Hospital
Summary
19
▪
Significant experience developing and operating projects in the DRC
▪
Successful outcome from mining review achieved for Kinsevere & Dikulushi
▪
Kinsevere Stage II SX-EW is now Anvil’s flagship project

low cost, long life, 60ktpa production

material free cash flow starting mid 2010

$180M spent so far; debt funding is well advanced
▪
Well placed to weather the current downturn by preserving cash through the
temporary closure of unprofitable operations
▪
Significant upside potential with large sulphide resources at Kinsevere and the
future development of the Mutoshi project
Please Visit us
www.anvilmining.com
Contact
Craig Munro – Snr Vice President Corporate & CFO
Telephone:
+61 8 9481 4700
Email:
[email protected]
Fax:
+61 8 9201 0125
Robert LaVallière - Vice President Corporate Affairs
Telephone:
+1 (514) 448 6664
Email:
[email protected]
Fax:
+1 (514) 448 6665
Mobile:
+1 (514) 944 9036
20
Dikulushi at dusk