Anvil Mining Ltd - Miningreview.com · Anvil Mining Stock Price 2008 –September 2011 $0.00 ......

iPAD DRC 2011, Kinshasa, DRC

Anvil Mining LtdRobert LaVallière

Vice President Corporate Affairs

iPAD DRC 2011 , Kinshasa, DRC

The DRC as a Mining Opportunity

� World Bank-endorsed Mining Code (2003) and DRC Govt. Mining reviews completed

� Substantial Multilateral presence; United Nations, World Bank, IMF and South Africa

� Upcoming DRC Govt. Elections, end of year 2011

� EITI member candidate (Q2 2010)

� OHADA initiative to improve legal framework

� “Macroeconomic performance has improved markedly”

� “Economic activity is expanding at a strong pace, inflation has decelerated, the exchange rate has stabilised and debt relief ($12.3B) has reduced the external debt burden that weighed heavily on the economy.” [John Lipsky – IMF Executive Board acting Chairman – February 2011]

Copper Production

Note: Figures for 2009 and 2010 are estimated.


Mission, Vision and Core Value

Mission Statement

� “To produce superior returns as a responsible minin g company”

‒ Attract and retain the best talent

‒ Be committed to international best practice and business conduct

‒ Be a partner of choice for host communities and governments

Vision Statement

Core Values

� “To be a great mining company that makes a meaningf ul difference”

‒ A highly reputable organization that protects its people, the environment and broader community from harm and enables them to grow with the success of the Company

� Integrity

‒ In all that we do, we are honest, ethical, law-abiding and transparent

� Respect

‒ We are respectful towards one another and we acknowledge and value our cultural diversity

� Accountability

‒ We are accountable for our actions and performance and for upholding the policies and decisions of the Company

� Value Adding to the Community

‒ We provide in the regions in which we operate, economic opportunity that results in enduring benefits in health, education and infrastructure

� Anvil operates in the Democratic Republic of Congo, where it has significant mine development and operating experience. In 2010, the Company produced 16,538 tonnes of copper in concentrate from its Kinsevere Stage I HMS plant and expects to double its copper production in 2011, with the commissioning and ramp-up of Kinsevere Stage II, a 60,000tpa LME-grade copper cathode project.

� We provide economic opportunity that results in enduring benefits in health, education and infrastructure in the regions in which we operate.

Overview


Anvil Mining Stock Price2008 – September 2011

$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.00

$10.00$11.00$12.00$13.00$14.00$15.00

$ Can

Source: TSX

Global financial crisisCollapse of base metal pricesAccess to capital almost impossibleCare & maintenance of 2 Anvil mines

Base metal prices regain value, but still a fragile economy

Kinsevere constructionprogress


DRC Copperbelt Potential

� World class copper / cobalt mining district of the DRC

600 km long, 50 km wide area of copper mineralisation stretching through Zambia and the DRC

Historically, one of the world’s great copper producing areas, especially the Kolwezi Klippe

Second largest undeveloped global resources


Progression of Anvil in the DRC 1997 – YTD

� 1997: Drilling at Dikulushi Cu- Ag Project, funded by First Quantum - $2.4M

� 2002: Dikulushi Stage I HMS Plant - $6.2M

� 2004: Dikulushi Stage II ball mill and flotation circuit - $7.5M

� 2005: MIGA Political Risk Insurance (First one in the DRC)

� 2005: Kulu Cu Tailings – HMS Plant - $7.5M

� 2007: Kinsevere Stage I HMS and EAF - $35.0M

� 2007-YTD: Kinsevere Stage II 60Kt SX-EW ± $400M

Dikulushi

Kulu


Kinsevere Stage II Project – Our Future Flagship in Katanga

▪ High quality open pit copper mine:

– 95% ownership with remaining 5% owned by Mining Company of Katanga (MCK)

– 25+ year lease agreement with Gécamines – Currently in production as HMS operation

▪ Amendment Agreement with Govt & Gécamines:

– Finalised January 2009

▪ Expected Operating Parameters:

– Annual production 60kt Cu cathode – Low Cash cost, expected to be in the first quartile cash cost curve of copper producers

– Royalties of 4.5% (Gécamines – 2.5% and DRC Govt. – 2.0%)– Operational life of 14+ years (oxides only)– Industry standard technology– Potential for additional resources

▪ Estimated construction cost of the SX-EW project: US$400 million – completed in Q3 2011


Copper Co-Product Cash Cost Curve by Mine (US$/lb)

Kinsevere’s cash costs are among the lowest across copper mines

globally

Kinsevere 1

C1 Cash Cost

1. Estimated cost, excluding royalties, during the commissioning/ramp-up second half of 2011.

Source: Brook Hunt, BMO Capital Markets


9

Kinsevere Stage II - Construction (August 2011)


Life Cycle of a Mining ShareTechniquesStage

Start-upOperating

GrowthProduction

FinancingConstructionEngineering

Development

ReservesOptimisation

CapexOperating costs

Feasibility Study

EngineeringMétallurgical

Resources / ReservesCost estimates

Pre-Feasibility

Study

Inferred mineral resourceAdditional drillingResource Definition

DrillingGeophysicsDiscovery

Resource

Identification

GeophysicGeochemistry

Geology

Early Stage

Exploration

Higher Risk

Lower Risk

Lower Risk

Higher Risk

Financial Environment &Communities


We must prepare ourselves in advance – Important Steps

EIA

SIA

Mining Reserves

Project FeasibilityStudy

Action Plan

NegociationsCommunitiesGouvernment:

•Provincial•State

• Communities• Roads / Infrastructures• Buildings• Workers / training

(Environment ImpactAssessment)

(Social ImpactAssessment)


Exploration to Production

• •

•

•

••

•

•

•

Capital

•Discussions / Marketing

++ Risk + Risk - - Risk

OngoingCapex

Production

Grassroots - Explo-D

rilling

Disco

very

Stud

ies-

Feas

ibili

ty S

tudi

es- F

inan

cing

Stages & Risks

1 2 3 4 5 6 7 8 9 10 Years

Ramp-up

$ M

illio

nsS

ever

al $

mill

ions

, eve

n$

billi

ons

•


Risk Management

� Mining projects / operations are subject to various risks: Commodity price

Construction and developemnt

Infrastructures and logistics

Operational

Labour

Environmental

Financial

Political

Reputational


Successfully developing / operating is a special challenge!

�Discover deposit

�Ensure it is economic Price risk

Technical risk

�Permitting risk Title and authorization

Social license to operate

�Financial risk

�Seek capital

(temporary/permanent)

Challenges for Mine Development


Localisation of Villages Surrounding Kinsevere Mine

Layout ofZones (A-B-C), for thePolling tat took placeIn many villages


Source: Sondage auprès des communautés en 2010 - 2011

Anvil Projects & Community Priorities

Education

Anvil Projects

Agriculture

Water

All Zones

AgricultureEducation

Water

Villages – All Zones

Priorities for theCommunity


Schematic

Sluice Irrigated

Corn Area

Cro

pla

nd

Cro

pla

nd

Aq

ua

cult

ure

Current HDPE Main

Water Discharge Pipe

90mm HDPE Offtake

Modular Expansion

Possible Future Cells

50mm Offtake

Rubber Hose

Side Berm - Water

at a Higher RL

Syphon Hoses

Len

gth

= 1

00

m

20m

Blank Flange

Gradient: Dropping towards Kifumashi River

Draining to Kifumashi River


Project - Agriculture


Community & Social / Sustainable Development

� Corporate Social Responsibility

‒ 2006 to 2008, Anvil partnered with Washington based community development agency Pact:

• Established an effective framework for community engagement & development in the DRC• In addition to Anvil resources, Pacts involvement attracted donor funding from IFC & USAID• Due to 2008 GFC, the Anvil-Pact partnership ended, however, initial setup objectives met

‒ Building on early successes, Anvil is establishing a comprehensive & transparent approach to CSR‒ As Anvil’s operations have expanded the social responsibility programs have been broadened to include a major focus on accountability i.e. increasing the level of community engagement, developing more effective governance structures, stepping up level of reporting on safety & environmental issues & encouraging external scrutiny

‒ Anvil’s “Corporate Responsibility & Sustainability Committee Charter” was adopted in May 2008

� Voluntary Principles on Security and Human Rights‒ In 2007, Anvil established a Code of Business Conduct‒ Anvil is fully committed to upholding the fundamental principles of human rights in carrying out its security

arrangements, including its interactions with both private and public security‒ Anvil observes the Voluntary Principles on Security and Human Rights

� Extractive Industries Transparency Initiative (EITI )‒ Anvil is a member Company of the EITI. The principles of the EITI are congruent with those of Anvil ‒ Anvil subscribes to principle of authentically contributing to a prosperous national economy

� Award

‒ 2008, Anvil received Certificate of Appreciation from InterAction recognising contribution to fight against global poverty


▪ Anvil is committed to sharing the benefits with the local community and making a meaningful difference

▪ Anvil is one of the leading international mining companies in the social development of the DRC

▪ $US23M invested in the DRC to date:– 9 schools (over 4,000 students)– School bursary program, that helps 200 students per

year with donations, has been in operation for the past 5 years in conjunction with Paradigm Capital

– Refurbishing of the Kilwa Hospital and the Mwangeji Hospital; 2 medical clinics

– 71 fresh water wells (in over 60 villages)– Over 100 km of road refurbishment work and bridge

building– Support to at least 5,400 small-scale farmers

• Local farmers: 500ha in 2008/09, 170ha in 2009/10 and 510ha in 2010/11

▪ Agriculture – Main focus

Social & Community Development Programs


Social Programs

120 kv Hydro-Electric Transmission Line and 40km

access road

Road and Kasemeno Bridge under constructionSeptember 2010

Opening Ceremony of the Kasemeno Bridge 2010 - $5M for roads and bridges


Social Programs

Kinika Bridge - 2010

PVC tubing for fresh water

Kawama Market BuildingSponsorship - Soccer Team

Water Borehole Program -Kinsevere

Social Program -Agriculture

Kilwa Clinic Lumekete School - 2006


Four Pillars of Communication

Anvil

Shareholders

Employees

Gouvernment/Stakeholders

Community

- Return on investment- Stock appreciation- Growth

- Stable and secure job- Gratifying work- Competetive salary- Communication and transparency

- Positioning the Company- Effective relationships- Enhance Company profile- Lobbying / Soliciting on new policies / regulations for local / nationa governments

- Effective relationships- Sustainability programs- Positive feedback- Enhance Company profile


Anvil’s Success in the DRC

Anvil’s Approach

─ Early entry in the DRC “first mover advantage”

─ Stages development: manageable growth

─ Maximising Congolese involvement and capacity building:

• Workforce is mostly Congolese nationals

─ Setting the highest standards in community engagement and social development

─ EITI supporting company; � Transparency

─ Imbedding internationally accepted codes of conduct into the culture of the Company

─ Strategic focus on growth


www.anvilmining.comVISIT USContact

Robert LaVallière Vice President Corporate Affairs

Telephone: +1 (514) 448 6664Email: [email protected]: +1 (514) 944 9036

Neil CaldwellVice President Development and Sustainability

Telephone: +27 11 750 6877Email: [email protected] Fax: +27 86 617 3791

Charles KyonaManager Administration-Lubumbashi

Telephone: +243 810724727Email: [email protected]

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Anvil Mining Ltd - Miningreview.com · Anvil Mining Stock Price 2008 –September 2011 $0.00 ......

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