Due diligence work by
Sampling of the tailings by the Perth, Australia-based company indicates an average copper grade in excess of 4%. In all, 450 fifty-kilogram samples were collected from a series of test pits dug to the original surface of the riverbed. The samples were reduced to 2-kg parcels and sent for assaying at A.H. Knight Laboratory in Kitwe, Zambia.
The tailings were originally discharged from the Mutoshi washing plant, previously operated by state-owned Gnrale des carrires et des mines (Gcamines) from 1960 to 1987. The material measures as much as 3 metres in thickness over an area up to 200 metres wide and 10 km long.
At last count, the Kulumaziba deposit was estimated to contain 5-7 million tonnes averaging 2-4% copper, based on historical records, including some 140 pit samples. The estimate does not conform to National Instrument 43-101 standards.
Anvil has already paid US$3 million and issued 153,950 shares at 62 apiece to Gecamines to acquire an 87.5% interest in private Congolese-based company Emiko, which owns 80% of the project. The shares are subject to a 4-month hold period that expires May 7. Anvil is also on the hook for US$8.75 million in staged payments, including US$4.25 million in 18 equal monthly payments beginning four months after commercial production begins. The company plans to fast-track Kulumaziba to production before year-end.
Anvil plans to reprocess the tailings via heavy media separation, which was successfully employed during the first stage of production at the company’s recently expanded Dikulushi copper-silver mine in the DRC’s Katanga Province (T.N.M., Oct. 15-21/04). Metallurgical recoveries are pegged at 70% to produce an oxide concentrate grading about 30% copper. Perth-based Intermet Engineering has been retained to design a million-tonne-per-year processing plant. In the end, annual copper-in-concentrate production is projected to exceed 25,000 tonnes.
“The Kulumaziba deposit provides an excellent opportunity for Anvil to initiate another low-capital-cost starter project, this time in the Kolwezi region,” says Michael O’Sullivan, Anvil’s general manager of development. “This project has the added advantage of low-cost mining and much better infrastructure than that found at Dikulushi, including access to the national hydroelectric power grid, which passes right through the property.”
The 137-sq.-km Mutoshi project also includes the Mutoshi mine, the Mutoshi Northwest and Nioka deposits, and the Kamukonko cobalt prospect. As well, the property encompasses some little-explored land along the southern edge of the Kolwezi Klippe geological feature, which has potential to host stratiform copper and cobalt mineralization. The Kolwezi Klippe historically accounted for about 70% of copper production in the DRC Copperbelt.
In addition to its 20% carried interest at Mutoshi, Gcamines retains a 2% net smelter return royalty (net of smelting, refining, transportation, assay and selling costs). The cost of Gcamines’ 20% interest will be carried by Anvil and recovered from cash flow.
In mid-December 2004, Anvil completed a private placement of 5.2 million special warrants priced at $5.25 apiece for gross proceeds of $27.5 million. A warrant is exchangeable for one share plus half a warrant, with a full warrant exercisable for an additional share at $6.25 per share. The warrants expire Dec. 16, 2007, but may be accelerated if Anvil’s shares price on the Toronto or Australian stock exchanges exceeds $8 for 20 consecutive days. All the securities are subject to a 4-month hold period that expires April 16, 2005.
Be the first to comment on "Anvil boosts Mutoshi (January 24, 2005)"