Kinsevere - Geology Overview

Kinsevere is Anvil’s largest investment in the DRC. Kinsevere Stage II involves the construction of a 60,000 tonnes per year  Solvent Extraction-Electrowinning (SX-EW) plant at an estimated capital expenditure of $400 million. The power needed for smelting and cathode copper production is being delivered via a 27km transmission line installed by the Company which connects the mine to the region’s hydro-electric grid.

120Kv hydro-electric transmission line and access route

The commissioning of the Stage I HMS plant began in June 2007 with the first copper concentrates produced that month. The Company recommenced HMS copper production, after several months of care and maintenance, on March 27, 2009. The HMS plant was once again placed on care and maintenance in the second quarter of 2011.

HMS plant at Kinsevere

History

The mineral rights to Kinsevere have been historically owned by La Générale et Carrière des Mines (Gécamines). During the 1990’s the Tshifufia and Tshifufiamashi prospects were the subject of a joint venture between Gécamines and EXACO s.p.r.l., a local Congolese company interested primarily in exploiting near- surface, high-grade, oxide cobalt resources. The joint venture was restricted to cobalt resources within 30 metres of the surface. A total of 67 holes were drilled into the Tshifufia and Tshifufiamashi deposits by EXACO, the majority of which were vertical, and down the dip of the orebodies. They were designed to test the distribution and grade of the oxide cobalt mineralisation. Gécamines also carried out preliminary investigations and some drilling on the Kinsevere Hill, Tshifufia Central, Tshifufia South and Tshifufiamashi deposits during the early 1990’s.

Subsequent to these investigations, an open pit was developed by EXACO to a depth of approximately 30 metres on the Tshifufia South prospect and 56,000 tonnes of ore at an average grade of 3.14% Cu and 0.76% Co were mined.

Exploration - Kinsevere (DRC)

Overview

Kinsevere is Anvil's largest investment in the DRC. Stage I of the project currently includes an open pit mining operation and a Heavy Media Separation (HMS) plant. Kinsevere Stage II is a 60,000 tonnes per year Solvent Extraction and Electrowinning ("SX-EW") copper project on which commissioning commenced in Q2 2011.

As at December 31, 2010, the Company as a Measured and Indicated Mineral Resource (Oxide and Sulphide) estimate for its Kinsevere project of 40.8 million tonnes at an average grade of 3.3% for 1,359k tonnes of contained copper.

Kinsevere Mineral Resource Estimate

Based on the current drill spacing, the Tshifufia and Tshifufiamashi deposits remain open for incremental additions to the sulphide Mineral Resource between 320 to 400 metres and 170 to 260 metres from surface, respectively.  The updated Mineral Resource estimate is presented in the table below:

Kinsevere Proven and Probable Reserve Estimate⁽¹⁾ as at year-end 2010

Kinsevere Copper Project Mineral Resource Estimate^(1,2)

Tshifufia, Tshifufiamashi and Kinsevere Hill Deposits as at year-end 2010

<sub>A revised Canadian National Instrument ("NI") 43-101 Technical Report has been lodged on the SEDAR website in March 2010 at www.sedar.com. The above estimates supersede those in that Technical Report.
1. 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.
2. 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, electrowinning ("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.</sub>

Kinsevere Copper Project Drilling Database

Geology

There are three known deposits located on the exploitation lease PE528 (Kinsevere)

The three deposits at Kinsevere are named, from north to south, Tshifufiamashi, Tshifufia and Kinsevere Hill. They are hosted by what appear to be two separate "mega-fragments" of prospective stratigraphy (Lower Roan Supergroup/Mines Group), which are surrounded by younger sediments of the Kundelungu Supergroup, of the Katangan System. Lithologically, the deposits occur in a mixed sequence of siliciclastic and carbonate rocks, which are typical hosts to Katangan Copperbelt mineralisation.

Click to view enlarged image

Click to view enlarged image

 

Most of the Kinsevere Mineral Resource defined to date (in all three deposits) is oxide ore, which forms a thick (>100m) supergene blanket that overlies sulphide mineralisation. The dominant copper oxide minerals are malachite (carbonate), pseudo-malachite (phosphate) and azurite (carbonate), which are disseminated throughout the host rock, or as veins and/or veinlets that sometimes coalesce into prominent "clots". Heterogenite (cobalt oxide) is sometimes inter-grown with the copper, but is always a minor component of the ore.

The dominant copper sulphide mineral of the primary ore is chalcopyrite, but minor bornite, chalcocite and cuprite also occur, along with native copper and pyrite. Most of this mineralisation occurs in veins and veinlets that often cross-cut bedding.

All three of the deposits are interpreted to be examples of structurally modified stratiform copper mineralization, which has weathered to form a supergene blanket of oxide ore.

Exploration History

Since the exploration program began in early 2005, Anvil has completed the following:

Surface trenching program - confirmed historical results of Gécamines

• Phase 1 drilling program (7,937m) in 2005 to define a preliminary resource for all three Kinsevere deposits
• Phase 2 drilling program (7,000m) in 2006 to increase the defined resource at the Tshifufia deposit
• Phase 3 drilling program (40,865m) in 2007 to increase level of confidence in the mineral reserves and resources on the Tshifufia, Tshifufiamashi, Kinsevere Hill deposits and the Kinsevere extension.
• Phase 4 exploration program (26,700m) in 2008 at Kinsevere completed to evaluate at depth the sulphide zone at the three main deposits

Environmental Approvals

The Kinsevere Environmental Impact Assessment (EIA) was approved in the fourth quarter of 2008 by the DRC Government Directorate for the Protection of the Mining Environment (DPEM).  This approval included a variance to the design and operation of the Stage II Tailings Storage Facility (TSF), incorporating milling-in-raffinate in the net process and the requirement for secure storage of non-neutralised tailings.  These design changes will result in significant reductions in consumption of water, lime and acid, with resulting operating cost improvements.

In addition to the requirements of the DRC Government, a revised Environmental and Social Impact Assessment is in preparation, in order to align the Company's environmental management of Kinsevere Stage II with the Equator Principles, the environmental, health and safety guidelines of the International Finance Corporation.

Tenements

The Kinsevere-Nambulwa Projects is located on two mining licenses (Permis d'Exploitations), PE528 and PE539, which cover a combined area of 29.6km².  Both of these licenses are owned by Gécamines. AMCK (a Joint Venture company formed between Anvil and Mining Company Katanga SPRL), signed an Amendment Lease Agreement with Gécamines and the DRC Government in Q1 2009. Under this agreement AMCK leases the underlying tenement from Gécamines for a royalty payment of 2.5% of gross turnover.  The Company has a 95% interest in the Kinsevere Lease Agreement.