iPAD DRC 2011, Kinshasa, DRC Anvil Mining Ltd Robert 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.
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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$400 million – completed in Q3 2011
iPAD DRC 2011 , Kinshasa, DRC
Copper Co-Product Cash Cost Curve by Mine (US$/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
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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)
iPAD DRC 2011 , Kinshasa, DRC
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
•
iPAD DRC 2011 , Kinshasa, DRC
Risk Management
� Mining projects / operations are subject to various risks: Commodity price
Construction and developemnt
Infrastructures and logistics
Operational
Labour
Environmental
Financial
Political
Reputational
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
Localisation of Villages Surrounding Kinsevere Mine
Layout ofZones (A-B-C), for thePolling tat took placeIn many villages
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
▪ 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
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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
iPAD DRC 2011 , Kinshasa, DRC
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]