Anvil Mining Reports First Quarter Net Income of $21.4 Million or $0.30 per share and Operating Profit of $33.7 Million
Mon May 12, 7:15 AM
ca.news.finance.yahoo.com
TSX, ASX: AVM
Common shares outstanding 71.2 million
All amounts are expressed in US dollars, unless otherwise stated.
MONTREAL, May 12 /CNW Telbec/ - Anvil Mining Limited (TSX, ASX: AVM), ("Anvil" or the "Company"), today announced net income for the first quarter ended March 31, 2008 of $21.4 million ($0.30 per share on a weighted average number of shares basis), compared to $21.1 million ($0.37 per share) for the first quarter of 2007. Concentrate sales for the first quarter of 2008 totalled $75.3 million, up 79% from the first quarter of 2007. Operating cash flow, before working capital movements, was $35.3 million ($0.50 per share), representing an increase of 35% compared to the first quarter of 2007.
First Quarter Highlights
- Quarterly production of 12,027 tonnes of copper and 482,655 ounces of
silver contained in concentrates;
- Revenues from copper-silver and copper concentrate sales of
$75.3 million, up 79% compared to the first quarter of 2007;
- Operating profit after depreciation and amortization of
$33.7 million, up 26% compared to the first quarter of 2007;
- Net income of $21.4 million ($0.30 per share), up 2% compared to the
first quarter of 2007;
- Cash flow from operating activities, before working capital
movements, of $35.3 million ($0.50 per share), up 35% compared to the
corresponding quarter of 2007;
- Commencement of a review of underground mining approach at Dikulushi
to maximise ore extraction and minimize dilution; and
- Construction costs for Kinsevere Stage II have increased to
$380 million, an increase of $123 million from the previously
released feasibility study.
Bill Turner, President and Chief Executive Officer of Anvil, commented, "Early production from the Kinsevere Heavy Media Separation processing plant, our third mine in the DRC, combined with strong copper and silver prices during the first quarter, contributed to strong operating cash flows. It should be noted that comparisons with the first quarter of 2007 are significantly impacted by the fact that the Kinsevere mine was not yet in production in the first quarter of 2007. Our efforts are currently focused on the construction and development of Kinsevere Stage II in order to be in position to deliver the first copper cathodes in the second half of 2009. We also have aggressive drilling programs currently underway at Kinsevere and on the Mutoshi properties in the Kolwezi region. The results of these drilling programs should be available during the third quarter of 2008."
Bill Turner continued, "In addition, the preparation of an engineering cost study for the construction of an expandable 15,000 tonnes per year Vat Leach / Solvent Extraction and Electrowinning processing facility at Kulu continued during the quarter and is expected to be completed later in the second quarter. The Company is moving as quickly as possible to transition the Kulu HMS operation into a cathode copper production facility to increase metallurgical recovery and realise the full value of this project."
Revised 2008 Production Forecast
As a result of reduced forecast production at both Dikulushi and Kulu, the Company now forecasts total annual production for 2008 of approximately the same as last year at 47,000 tonnes of copper and 950,000 ounces of silver.
Dikulushi
Despite the Dikulushi operation achieving its copper and silver production targets for the first quarter of 2008, the extraction of ore from underground stopes using the sub-level caving method and the rate of underground development at Dikulushi were less than expected. As a result, forecast production for 2008 at Dikulushi has been reduced to 11,000 tonnes of copper and 950,000 ounces of silver. The Company is currently carrying out a detailed review of stoping practices to determine the most appropriate mining method. A life-of-mine plan, incorporating a modified approach to the underground mining method for Dikulushi is expected to be completed during the third quarter of 2008.
Until an appropriate mining method has been decided upon, feed to the plant will be sourced primarily from stockpiled HMS floats and tails, supplemented with ore from the underground mine.
Kulu
As mining progresses further downstream, finer grained, lower grade material is being encountered which has a poor metallurgical recovery through the HMS plant. As a result, forecast production for 2008 at Kulu has been reduced to 9,000 tonnes of copper. In order to more effectively process finer grained and lower grade material, additional modifications to the plant are being carried out and these are expected to be completed in the third quarter of 2008.
Kinsevere
Forecast production at Kinsevere remains unchanged at approximately 27,000 tonnes of copper.
Kinsevere Stage II Construction Cost Increase
The development of the Kinsevere Stage II project is progressing, with commissioning expected to commence in the second half of 2009. Progress to date has been slower than forecast but activity is expected to increase substantially, now that the wet season is over.
At the SX-EW plant site, ground preparation has been the main area of focus in the latter part of the first quarter. A concrete batch plant is to be commissioned in the second quarter of 2008. Foundation work has started at the crushing and leach agitator sites and further progress has been achieved with:
- Finalization and issue of the process flow drawings.
- Completion of the bulk earthworks for the plant area.
- Commencement of fabrication of the leach tanks.
- Mobilization of the contractor fleet for the tailings dam.
- Continuation of fabrication of the Ball Mill and Thickener Tank.
A power purchase agreement was signed in December 2007 with Société Nationale d'Électricité, the DRC government electricity company, for the supply of 39.5MW of hydro-electrical power. The new 27 km 120Kv transmission line, which connects the Kinsevere mine to the DRC national hydroelectric grid, has been commissioned. The new transmission line has been designed so as to be capable of fully supporting the power demands of the planned Stage II development of the 60,000 tonnes per year SX-EW plant. On-site diesel powered generators remain on standby, for any power interruption to sustain HMS Plant operations.
The mine access road alongside the 120Kv transmission line has been formed. As a result, traffic through villages located on the original refurbished access road located further to the west has been significantly reduced and is essentially used for transport of Kinsevere employees.
The feasibility study for the project estimated the capital cost through to completion of $257 million. The capital cost is now expected to be $380 million with approximately 75% expected to be incurred during 2008 and the balance in 2009.
This revised construction cost estimate reflects the benefit of detailed design and engineering as well as additional infrastructure at the mine site and general cost escalation currently affecting the construction of new projects in the mining sector worldwide. The Company faces challenging conditions in the DRC with regards to the logistics and transportation of parts and equipment to site. In addition, increases in the price of fuel, materials, and steel, as well as the increased global demand for construction and engineering labour have had an important impact on the revised cost estimate.
The complete unaudited financial statements together with the related Management's Discussion and Analysis (MD&A) are available on Anvil's website at www.anvilmining.com under the heading "Financial Reports".
Corporate Appointment
The Company recently announced the appointment of Dr Toby Bradbury, Vice President Operations, DRC. Toby has succeeded Malcolm Hillbeck who recently announced his retirement. Toby has over 25 years international experience in the mining and minerals sectors, in South Africa, UK and Australia across a broad range of commodities and has accumulated significant knowledge in the planning, development and operation of surface and underground mining activities including the mineral processing, marketing and logistics functions.
Reminder - Annual and Special Meeting of Shareholders
The Company invites you to attend its Annual and Special Meeting of Shareholders to be held at the TSX Broadcast Centre, The Exchange Tower, 130 King Street West in Toronto, at 4:00 p.m. (EST) on May 12, 2008. The company will present its financial and operating performance for the year 2007, its first quarter 2008 results and will also provide an update on its operations and development projects. There will be an opportunity to ask questions and meet management and the board of directors, as well as other shareholders.
Reminder - First Quarter Financial Results Conference Call
A conference call will be held at 8:30 a.m. (EDT-North American time) on Tuesday May 13, 2008, coinciding with 8:30 p.m. (AWST-Australia, Perth time) on the same day to discuss the results announced in this News Release. Details to access the conference call and the live audio webcast are as follows:
Conference call:
(Please call approximately five minutes prior to the scheduled start of
the call)
- Toll-free within North America: 1-800-733-7541
- For local and overseas calling: 1-416-644-3414
Live audio webcast of the conference call (listen mode only):
- CNW Group website at:
newswire.ca
Replay Information (available for a period of 7 days):
- The conference call will be recorded and a playback of the call
will be available after the event by dialling 1-877-289-8525 or
1-416-640-1917, Reservation number 21268664 followed by the
pound (No.) key.
Anvil Mining Limited is an unhedged copper and silver producer whose shares are listed for trading on the Toronto Stock Exchange (as common shares) and the Australian Stock Exchange (as CDIs) under the symbol AVM. It has majority interests in and operates the Dikulushi copper-silver mine, the Kinsevere copper mine, and the Kulu copper tailings operation in the Katanga Province of the Democratic Republic of Congo.
Caution Regarding Forward Looking Statements: The forward-looking statements made in this news release are based on management's assumptions and judgments regarding future events and results. Such forward-looking statements, including but not limited to those with respect to the Company's plans for expansions of the Kinsevere copper mine and estimated future production at the Dikulushi, Kulu and Kinsevere mines, involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual market prices of copper, changes in project parameters as plans continue to be evaluated, and the possibility of cost overruns, as well as those factors disclosed in the Company's filed documents. There can be no assurance that the Stage II expansion of the Kinsevere copper mine will proceed as planned or be successfully completed within expected time limits and budgets or that, when completed, the expanded facility will operate as anticipated.
As a consequence of the letters Anvil received in February 2008 from the DRC Minister of Mines, Anvil may be required to enter into discussions or negotiations with the DRC Government and Gécamines regarding its rights with respect to its properties in the DRC. No assurance can be given as to the outcome of any such discussions or negotiations or that Anvil's security of tenure and its ability to secure additional financing in the future may not be adversely affected so as to have a material adverse effect on its business, operating results and financial position.
Appendix
Key Financial and Production Data
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First Quarter
ended March 31
2008 2007
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Revenues: ($ millions)
Copper-silver and copper concentrate sales 75.3 42.0
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Operating profit: ($ millions) 33.7 26.7
Net Income : ($ millions) 21.4 21.1
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Realized price: ($) Dikulushi mine
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Copper per pound 3.80 2.96
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Silver per ounce 20.20 13.55
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PRODUCTION STATISTICS:
Consolidated Group
Copper produced in concentrates (tonnes) 12,027 8,041
Silver produced in concentrates (ounces) 482,655 537,858
Per Mine
Dikulushi mine
Ore processed (tonnes)(1) 99,533 87,262
Copper grade (%) 5.3 7.0
Contained Copper in Ore (tonnes) 5,303 6,138
Recovery (%) 92.1 89.1
Copper produced in concentrates (tonnes) 4,885 5,469
Silver produced in concentrates (ounces) 482,655 537,858
Ore mined (tonnes) 32,864 4,303
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Costs of production: ($)
Operating cash cost (ex-mine gate) (after
silver credits) 0.21 (0.06)
Total cash costs from operations 0.70 0.40
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Kinsevere mine
Ore processed (tonnes)(3) 91,990 --
Copper grade (%) 9.1 --
Contained copper in ore (tonnes) 8,399 --
Recovery (%) 57.8 --
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Copper produced in concentrates (tonnes) 4,855 --
Ore mined (tonnes) 388,958 --
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Costs of production: ($)
Operating cash costs per tonne (ex mine gate) 374 --
Kulu mine
Ore processed (tonnes)(3) 106,734 80,245
Copper grade (%) 4.3 6.0
Contained copper in ore (tonnes) 4,599 4,847
Recovery (%) 49.7 52.8
Copper produced in concentrates (tonnes) 2,287 2,558
Ore mined (tonnes) 87,956 17,223
Costs of production: ($)
Operating cash costs per tonne (ex mine gate) 561 293
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1. Ore processed at Dikulushi relates to ore processed through the ball
mill and flotation plant.
2. The Kinsevere mine commenced production in June 2007.
3. Ore processed at Kulu and Kinsevere relates to ore processed through
the HMS plant.
Consolidated Balance Sheets (unaudited)
March 31 December 31
2008 2007
$ $
ASSETS
Current assets
Cash and cash equivalents 192,498 215,754
Restricted cash 223 322
Accounts receivable 71,724 65,761
Inventories 38,936 32,221
Investments 62,689 63,800
Prepaid expenses and deposits 28,571 21,449
---------------------
394,641 399,307
Equity accounted investment 5,430 5,766
Long term receivable 4,859 3,966
Exploration and acquisition expenditure 54,447 49,680
Property, plant and equipment 252,129 228,052
Future income tax asset 2,855 1,884
---------------------
714,361 688,655
---------------------
---------------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 22,310 25,044
Income taxes payable 5,200 5,116
Other liabilities 1,432 1,296
Current portion of long term debt 239 -
---------------------
29,181 31,456
Future income tax liability 43,091 39,587
Long-term debt 561 -
Asset retirement obligations 12,368 11,668
---------------------
85,201 82,711
Non-controlling interest 14,732 13,880
---------------------
99,933 96,591
---------------------
Shareholders' equity
Equity accounts 382,891 382,108
Retained earnings 230,963 209,524
Accumulated other comprehensive income 574 432
---------------------
Total shareholders' equity 614,428 592,064
---------------------
714,361 688,655
---------------------
---------------------
Consolidated Statements of Income and Comprehensive Income (unaudited)
Quarter Ended March 31
2008 2007
$ $
Concentrate sales 75,267 42,036
Operating expenses (34,058) (13,537)
Amortization (7,493) (1,820)
---------------------
33,716 26,679
Other income 2,732 1,151
Share of loss in associates (336) -
General, administrative and marketing (5,305) (2,406)
Foreign exchange gains 48 50
Stock based compensation (567) (559)
Interest and financing fees (1,605) (401)
---------------------
Earnings before income tax and non-controlling
interest 28,683 24,514
Income tax (5,597) (811)
Non-controlling interest (1,647) (2,625)
---------------------
Net Income 21,439 21,078
Other comprehensive income, net of taxes:
Net unrealized gains/(losses) on available-
for-sale securities 142 (71)
---------------------
Total comprehensive income 21,581 21,007
---------------------
---------------------
Basic earnings per share ($) 0.30 0.37
Diluted earnings per share ($) 0.30 0.36
Cash Flow Statement (unaudited)
Quarter Ended March 31
2008 2007
$ $
Cash flows from operating activities
Net earnings for the period 21,439 21,078
Items not affecting cash
Amortization 7,493 1,820
Loss on derivative instruments 960 -
Share of loss in associates 336 -
Loss on sale of assets 288 -
Non-controlling interest 1,647 2,625
Borrowing costs - amortized - 151
Unrealized foreign exchange (gains)/losses 83 (6)
Future tax 2,533 (52)
Stock based compensation 567 559
Changes in non-cash working capital (16,354) (10,357)
---------------------
18,992 15,818
---------------------
Cash flows from investing activities
Payments for property, plant and equipment (39,242) (22,081)
Proceeds from sale of assets 179 13
Payments for exploration and evaluation
expenditure (4,767) (4,030)
Payment for acquisition of additional interest
in AMCK Mining s.p.r.l - (36,000)
Proceeds of principal repayments from investments 1,248 5,992
---------------------
(42,582) (56,106)
---------------------
Cash flows from financing activities
Proceeds from issue of shares (net of issue
expenses) 216 82
Proceeds from borrowings (net of fees incurred) 800 -
Movement in restricted cash 98 -
Repayment of borrowings - (2,000)
Disbursements on behalf of Dikulushi Trusts (795) (518)
---------------------
319 (2,436)
---------------------
Net decrease in cash and cash equivalents (23,272) (42,724)
Cash and cash equivalents at beginning of the
period 215,754 59,302
Effects of exchange rate changes on cash held in
foreign currencies 15 -
---------------------
Cash and cash equivalents at end of the period 192,498 16,578
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Contacts
Craig Munro
Senior Vice President Corporate & CFO
Tel: +61 (8) 9481 4700
Email: craigm@anvilmining.com
Robert La Vallière
Vice President Investor Relations
Tel: (Office) (514) 448-6664
(Perth) (Cell) (514) 944-9036
Email: robertl@anvilmining.com (Montreal)
Website: www.anvilmining.com |
