re: minsite article For the record - here is the article...

re: minsite article For the record - here is the article referred to by miningnut:

Date : June 12, 2003



Anvil Mining To Consider Listing In London As Australian Investors
Consider Congo Too Risky.


Editor’s Note: The article was written for an Australian audience, hence some of the gloomier assumptions about the Democratic Republic of Congo which is a massive country in receipt of help and advice from the World Bank since President Joseph Kabila took command. The Dikulushi project is on the Zambian border some 1,600 kms south of the present trouble spot, a distance akin to that from the UK to Greece. Managing Director Bill Turner will be in London towards the end of this month to test the water for an AIM listing as he feels investors in London may be more positive towards the achievements of his company. Minews intends to interview him at that time.

Anvil Tames The Congo

By Our Man In Oz.

Australian investors have to be forgiven for treating Anvil Mining’s maiden quarterly profit of A$95,824 with the disdain shown in the weeks after April 29 when the company gleefully told the world that its accounts for the March quarter were in the black. From an uninspiring A$0.14cents a share the small Australian-based copper producer slumped to an even more uninspiring A$0.11.5cents. A correction, it is pleasing to note, is now underway with Anvil back up to A$0.13cents as cooler heads take a closer look at the result, and the company’s prospects in one of the world’s great copper provinces.

Congo, more specifically the Democratic Republic of Congo (the old Zaire, which was the old Belgian Congo etc etc), is a disaster by most measures. The gun still rules, human rights are non-existent, and there are routine outbreaks of civil war between tribes which have been fighting for centuries.

But, beneath the surface lies copper at grades rich enough to make grown miners weep. The trick, as it has always been, is finding a way to get the ore out of the ground, and then out of the country. Anvil, which has spent the past seven years looking for a way to develop its rich patch of Congo at the Dikulushi mine has found a way, by barge across Lake Moero into Congo’s more stable neighbour, Zambia, and then on to the metal refineries of South Africa. Once the development route was chosen, construction was astonishingly quick with key contracts awarded in the first six months of last year and exports underway from early October, 2002.

At a head grade of 8.59% copper, plus silver credits of 266 grams a tonne, Dikilushi ore is worth the effort. The start-up phase of the mine is a modest open pit feeding a heavy media separation plant to produce a concentrate of 40% copper and 1,230g/t silver at an average copper equivalent cash cost of around US$0.40cents a pound. Production in the first year is tipped to be around 7,100 tonnes of copper, rising to 17,000 tonnes by year three. The second stage of the mine, which is being planned now, includes the addition of a ball mill and flotation circuits to bump the concentrate grade up to 60% copper and 1,935g/t silver and cut the cash cost to US$0.31c/lb. Stage three will involved an underground development via a decline off the base of the pit. The capital cost of stage one was just US$5.7 million. The stage two expansion has a price tag of US$4.5 million with South Africa’s Rand Merchant Bank standing behind Anvil.

Also supporting the company and its plans is the highly-regarded Australian institutional investor, Colonial First State, an arm of the Sydney-based Commonwealth Bank. It has recently snapped up a 9.8 per cent stake in Anvil, putting it in second place to Canada’s First Quantum Minerals which has a 17.7 per cent interest and shares a chairman with it.

Most of First Quantum’s assets are in the DRC so it knows the country well, but what seems to attract Colonial is the future, and a view that times are changing in one of the world’s more dodgy countries. Dikulushi, which has revealed excellent depth extensions for future deep underground mining (including one intersection of 16% copper over 16.7m from a vertical depth of 165m), will provide the initial cash flow. According to a company-sponsored report by Resource Finance Corporation, Anvil will break-even over the 12-months to June 30, 2003. Next financial year should see a profit of A$6.7 million (from metal sales of A$48.3 million) rising to a profit of A$18.5 million (from sales of A$66.2 million) in financial 2005.

Cash from Dikilushi will accelerate exploration on a string of prospects across Anvil’s south-east corner of Congo. The 90 per cent owned Kapulo prospect is the hottest of these with early work by the French Government’s geological arm, BRGM, revealing a resource grading more than 6% copper. In the March quarter, Anvil picked up a tenement on the Zambian side of the border to chase the Kapulo fault structure.

The Australian market will take time to develop a comfort level with Anvil and its Congo copper play, though it is worth noting that the RFC study values the business as it now stands at A$56.2 million, or A$0.25c a share. This is roughly double the current market price and with just A$5.9 million assigned to exploration prospects in Congo and at another seriously interesting prospect, the Duc Bo zinc and copper play near Da Nang in Vietnam. Grab samples of massive banded sphalerite chalcopyrite assay up to 41% zinc, 6% copper and 5% lead -- more than enough to kick-start a serious search effort.