Anvil completes work on new copper plant in Congo

Anvil Mining Ltd said it has completed construction of a new plant at its Kinsevere copper mine in the Democratic Republic of Congo and commercial production from the facility is set to begin in the current quarter.

With the commissioning of the new plant, Anvil expects to more than triple its annual production to about 60,000 tons of copper cathode.

The majority of the copper cathodes produced at the new plant thus far conform to the London Metal Exchange's Grade A specifications, the company said Friday.

"Given the current rate of progress with ramp-up and commissioning, it is anticipated that the 5,000 tons per month design capacity will be achieved during the fourth quarter of 2011," Chief Executive Darryll Castle said in a statement.

Anvil said it has halted production from its old facility at the site as it focuses on the commissioning and ramp-up of the new plant.

STRATEGIC REVIEW

Last week, Anvil said it had begun to review its strategic alternatives, sending its shares up almost 7 percent at the time.

Anvil said on Friday it has hired BMO Capital Markets to assist with the process, which is being driven by commodity trader Trafigura's plan to sell its stake in the company.

Trafigura is Anvil's largest shareholder and owns 39 percent of the company's shares.

"In light of Trafigura's decision, the board of directors of Anvil has formed a special committee to review alternatives in order to maximize value for all shareholders," the company said in a statement.

Castle said the company is attempting to fast-track the review and complete the process as soon as possible.

Q2 RESULTS

Anvil said copper production for the second quarter was 5,999 tons, comprising 2,623 tons of copper in concentrate from its old facility and 3,376 tons of copper cathode from the new plant.

Due to accounting norms, Anvil has not included revenue and costs related to the new plant in its latest quarterly results. These will be factored into its financials once commercial production from the facility begins.

For the second quarter, Anvil reported a loss from continuing operations of $832,000, or 1 cent a share. That compares with a year-earlier profit of $15.1 million, or 10 cents a share.

Anvil said the loss was due to lower production volumes and higher costs that relate to winding down operations at its old plant.

Quarterly revenue from the sale of copper in concentrate was $10.4 million, down from $14.5 million, a year earlier.

Copper cathode sales from the new facility generated $26.8 million in revenue that was not factored into the quarterly results.

Anvil shares rose 1 percent to $6.11 Canadian in early trading on the Toronto Stock Exchange.