Kinsevere
Kinsevere represents Anvil's most significant investment in the DRC to date. In 2010, the Company produced 16,538 tonnes of copper contained in concentrate from the Kinsevere HMS processing operation, however the main focus is on completing construction of the $400 million Kinsevere Stage II SX-EW plant that is expected to produce 60,000tpa of copper cathodes.
Fast Facts
| Kinsevere | |
|---|---|
| Ownership | Anvil 95% - Mining Company Katanga (MCK) 5%1 |
| Location | 30km north of Lubumbashi, the provincial capital of Katanga Province, DRC |
| HMS production | Restart of the HMS Plant - March 2009 |
| 2011(E) production | 29,000 tonnes Cu in oxide concentrate and copper cathode form |
| Expansion | Construction of a 60,000 tpy SX-EW copper cathode |
| Capex(E) | $400 million |
| IRR2 | 36% |
| NPV2 | $473 million |
| Payback2 | 3.6 years |
| Commissioning(E) | Q2 2011 |
| Full Production | Q1 2012 |
1. Royalties: 2% NSR to DRC Government and 2.5% gross to Gécamines.
2. Estimates are based on the total Capex of $400 million, a 10% discounted rate and an average copper price of $2.44/lb Cu. Reference: NI 43-101 Kinsevere Technical Report, March 31, 2010.
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2011 Production
Total annual copper production for 2011, including copper in concentrate and copper cathode, will be approximately 29,000 tonnes. The Heavy Media Separation (HMS) plant was placed on care and maintenance in the second quarter of 2011.
Kinsevere Stage II Ramp-up - January 9, 2012
Anvil Mining announced on January 9, 2012 that total annual copper production for 2011, including copper in concentrate and cathode, will be approximately 29,000 tonnes. This is marginally below the previous guidance (30,000 - 31,000 tonnes) provided by the Company last November. Technical difficulties experienced with the plant's electrowinning transformers, particularly in the fourth quarter of 2011, account for the above variation and are expected to also result in the ramp-up to full production occurring at the end of the first quarter 2012 rather than the previous target date of December 2011.
Despite the technical difficulties experienced during the build-up of production at Kinsevere, the Company is pleased with the progress made during 2011. The current efficiency in the tank-house is now close to design specifications and further improvements are expected in January and February as planned equipment improvements are implemented. These achievements have helped to mitigate some of the short-term technical difficulties experienced.
The Kinsevere plant's electrowinning tank-house was commissioned earlier in 2011 with four installed transformers and one on-site spare. From the start of commissioning and during the plant's ramp-up in 2011 continuing technical difficulties were experienced with these transformers. Power interruptions in the Democratic Republic of Congo, particularly during December 2011, further impacted the production build-up.
Kinsevere is currently operating on two-and-a-half of its four required transformers. In order to resolve the technical difficulties and mitigate production risk, the Company is working with specialist consultants and contractors to repair failed transformers where possible, and procure new units of higher specification and improved design. A recently refurbished transformer has been operating without incident and we commenced a process in the third quarter which will results in the replacement of all the transformers. Due to the lead tie to acquire replacements, the Company expects the process will be completed towards the end of the first quarter 2012, when we plan to have in operation four new transformers in addition to the two standby units which are currently operational and which will be held as backup.
Kinsevere Stage II Ramp-up - November 14, 2011
Ramp-up continued in the September quarter, during which several issues were identified that constrained the ramp-up rate of the SX-EW plant and resulted in lower than expected production. Good progress has been made on the resolution of such issues, the most notable of which are:
- Persistent problems with rectifiers and transformers were experienced during the third quarter, part of which was attributable to the quality and stability of power supplied from the grid and part of which was due to hardware faults with the units related to design as well as storage issues. Following the purchase of two new transformers and the refurbishment of an existing spare transformer, the Company is now well positioned to manage issues associated with transformer performance. All three units are expected to be on site prior to year-end 2011.
- As the rectifier and transformer issues were resolved and the operation was able to operate at full-load it became apparent that the current efficiency in the tank-houses was materially sub-optimal. The low current efficiency resulted in a lower than planned cathode plating rate, but not a loss of copper. The current efficiency problem has been found to be the result of a combination of inefficient design, construction issues and operator learning curve factors. Certain interim fixes have been implemented and a program of retrofitting is in place which will be completed by the first quarter 2012. Improved housekeeping and operating practices to overcome the inherent inefficiencies have in the meanwhile improved the tank-house performance to acceptable levels.
Rectification of the above-mentioned issues appears to have been effective, with production of copper cathode in October totaling 4,022 tonnes. Progress in resolution of current efficiency issues at the tank-house and with work on the optimization of performance of the SX-EW plant continuing, the Company expects that design capacity will be achieved prior to year-end.
From a quality standpoint, independent assays confirmed that the majority of cathode produced during the quarter conformed to LME-Grade A chemical specifications however, approximately 25% of bundles produced were off specification due to lead content. The increased lead content was a direct result of the disturbance of the anode surfaces during the installation of the new anode insulators. A procedural change was instigated for such installation and this had an immediate effect on copper cathode quality, with the latest site-based assays showing that production from the SX-EW plant is on specification for lead content and all other LME elements.
Kinsevere Stage II
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Expected Operating SX-EW Parameters*
- Annual production 60,000 tonnes Cu cathode (SX-EW)
- Cash cost of $0.89/lb Cu (C1)
- Total cash cost including royalties of $1.00/lb Cu
- Total operating cost of $1.33/lb Cu (C3)
- Operational life of 14+ years (oxide only)
* Taken from the NI 43-101 Kinsevere Technical Report filed on SEDAR (www.sedar.com) on March 31, 2010.
Expected Operating Highlights*
(As per the 2009 revised Feasibility Study.)
| Ore mined (million tonnes) | 18.0 |
| Average grade (% ASCu1) | 3.5 |
| Waste mined (million tonnes) | 22.4 |
| Waste to ore ratio | 1.2 : 1 |
| Processing life (years) | 14 |
| Ore processed (million tonnes)2 | 21.9 |
| Average processed grade (% ASCu) | 3.2 |
| Recovery3 (%) | 91.9 |
| Cu metal produced (tonnes) | 648,500 |
1. ASCu means Acid Soluble Copper.
2. Total ore processed exceeds the total ore mined due to reclaim from existing long-term stockpiles, plus HMS floats and effluent stockpiled.
3. Average recovery over the term of Stage II reflects a period of reduced recovery during production ramp-up.
* Taken from the NI 43-101 Kinsevere Technical Report filed on SEDAR (www.sedar.com) on March 31, 2010.
Kinsevere Mineral Reserves and Resources at December 31, 2010.
| Classification | Category | Tonnes (million tonnes) | Grade TCu (%)3 | Grade ASCu (%)3 | Contained TCu or ASCu (thousand tonnes) |
|---|---|---|---|---|---|
| MINERAL RESERVES1 | |||||
| Kinsevere Oxide Mineral Reserve | |||||
| Tshifufia, Tshifufiamashi & Kinsevere Hill Pits | Proven and Probable | 22.13 | 3.97 | 3.22 | 712.1 ASCu |
| Stockpiles | Probable | 2.66 | 1.92 | 1.61 | 42.7 ASCu |
| Total Pits and Stockpiles | Proven and Probable | 24.79 | 3.75 | 3.04 | 754.8 ASCu |
| MINERAL RESOURCES2 | |||||
| Kinsevere Oxide Mineral Resource | |||||
| Tshifufia, Tshifufiamashi & Kinsevere Hill oxide deposits | Measured and Indicated | 28.96 | 3.60 | 2.85 | 824.8 ASCu |
| Kinsevere Sulphide Mineral Resource | |||||
| Tshifufia and Tshifufiamashi sulphide deposits | Measured and Indicated | 11.86 | 2.67 | 1.09 | 317.0 TCu |
| Total oxide and sulphide deposits | Measured and Indicated | 40.82 | 3.33 | 2.34 | 1,359.5 TCu |
| Total oxide and sulphide deposits | Inferred | 13.45 | 2.62 | 0.88 | 352.8 TCu |
A revised Canadian National Instrument ("NI") 43-101 Technical Report was lodged on the SEDAR website in March 2010 at www.sedar.com. The above estimates supersede those in that Technical Report.
1. The Mineral Reserve estimate has been classified and reported using the guidelines of the Australasian Code for Reporting of Exploration results, Mineral Resources and Ore Reserves ("The JORC Code, 2004"). These guidelines are generally consistent with those required by the NI 43-101 - Standards of Disclosure for Mineral Projects. The Proven and Probable Mineral Reserves relate to oxide mineralisation only and are included within the Measured and Indicated Mineral Resource. The Mineral Reserve estimate is based on a copper price of $1.75/ lb Cu and an associated marginal cut-off grade of 0.55% ASCu. The Mineral Reserve estimate was prepared by Mr Anthony Cameron of A & J Cameron and Associates Pty Ltd, who is a Qualified Person in accordance with NI 43-101.
2. The Mineral Resource estimate for Tshifufia and Tshifufiamashi was prepared by Mr David Gray of Optiro Pty Ltd, whilst the Mineral Resource estimate for Kinsevere Hill was prepared under the supervision of Mr Gerry Fahey of CSA Global Pty Ltd. All samples were assayed at the ALS Chemex laboratory in Johannesburg or at the ActLabs Pacific laboratory in Perth, Australia. Standard QA/QC checks were applied throughout the drilling program, including the submission of certified reference materials, duplicate samples and blanks. A reporting cut-off grade of 0.5% TCu has been used for both the oxide and sulphide Mineral Resource estimate. Messrs Gray and Fahey are Qualified Persons in accordance with NI 43-101.
3. TCu stands for Total Copper; ASCu stands for Acid Soluble Copper (i.e., pertaining to the recoverable oxide copper mineralisation for the Stage II solvent extraction, electro-winning ("SX-EW") plant).
Note: More details on Reserve and Resources estimates can be found in the Annual Information Form (AIF) filed with SEDAR at www.sedar.com on March 31, 2011.
2010 Kinsevere HMS Production
Anvil recommenced operation of the Kinsevere Heavy Media Separation (HMS) plant on March 27, 2009, focused on achieving a low-cost operation to enable the Company to generate positive cash flow until such time as the Stage II Solvent Extraction - Electrowinning (SX-EW) plant becomes operational. More information
In 2010, the HMS plant produced 67,128 tonnes of concentrate, at an average grade of 25.6% copper for 16,538 tonnes of copper contained in concentrate. Key performance details of the HMS plant for the fourth quarter and the full year 2010 are set out in the table below.
Operating Performance: Kinsevere HMS Plant | Q4 2010 | Year 2010 |
|---|---|---|
| Ore processed - HMS plant (dmt) | 88,044 | 303,162 |
| Feed grade - HMS (%Cu) | 6.0 | 7.1 |
| Contained copper - HMS (tonnes) | 5,319 | 21,398 |
| Recovery Cu - HMS (%) | 64.5 | 68.3 |
| Concentrate produced - HMS and spirals (tonnes) | 15,082 | 67,128 |
| Concentrate grade - HMS and spirals (% Cu) | 25.4 | 24.6 |
| Copper produced in concentrate - HMS and spirals (tonnes)1 | 3,817 | 16,538 |
| Copper sold - tonnes Cu | 3,803 | 16,866 |
| Average realised price - $ / lb | 3.55 | 3.27 |
| Operating cash cost (ex mine gate) - $ / tone concentrate | 456 | 349 |
1. In addition to producing a coarse concentrate from the HMS plant, a fine grained, slightly lower grade concentrate is produced from a spirals circuit, through which the fines (<0.6mm) that are screened off before the HMS circuit are treated.
Status of Kinsevere Stage II - January 9, 2012
The ramp-up of the Kinsevere Stage II Solvent Extraction Electrowinning ("SX-EW") plant is continuing, with a design capacity of 60,000 tonnes of copper cathode per year expected to be achieved prior to the end of the first quarter of 2012.
Total annual copper production for 2011, including copper in concentrate and copper cathode, will be approximately 29,000 tonnes.
Kinsevere Stage II Timetable |
Kinsevere Stage II - Full Plant Viewed from Crushing | Kinsevere Stage II - Full Plant
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