Highlights of the Conference callMining review. Bill is off to...

Highlights of the Conference call

Mining review. Bill is off to Kinshasa tomorrow for a week meeting officials and Mike O’Sullivan is in Lubumbashi meeting with Gecamines. Craig Munro was also asked about the $150 million govt claim at Kinsevere which he said it was an ambit claim. The company would work within the framework of existing agreements. He was very firm in his tone on that one.

The EAF plants at Kinsevere are being fired up Saturday. The second EAF will be heated up in 2 weeks time and both expected to be fully ramped up and commissioned in June.

The significant increases in expansion costs were discussed. 20% has been inflationary escalation factors and further more intensive infrastructure built in. Craig Munro said Asciano will no longer be the main sole head contractor, and there were a number of costs not factored in by Asciano.
There will be a three-part construction management process rather than one. Anvil being the third main party with a much greater direct role. They have also increase the infrastructure footprint for a potential 120K SXEW Stage III expansion.

Despite the increase in Stage II development costs the economics are still very attractive using more consensus copper prices.

Dikulushi has been the main problem with the bottom-up mining method. The reduction in forecast mining production should be resolved with the next 4-6 months. However there is still quite a bit of lower grade ore on the ROM pads <3%. For the last 12 months we have just been processing ore from stockpiles that didn’t incur mining costs. Now we are with the start of underground production and Dikulushi will no longer be the very cheap mine it once was.

By Q4 2008 we can expect as decision to move the Dikulushi ore to Kinsevere to be processed in the 2 EAF plants. The road is currently being refurbished.

SBS is still a long term strategy and Bill said they will provide whatever assistance they need to move forward. But currently the main focus is Kinsevere and Kolewzi/Mutoshi, with 8 drill rigs operating in these areas.

They have given themselves some flexibility with the long-term outlook moving the 110,000 t to 2011.