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Anvil Mining sells Dikulushi project to Mawson West

On closing of the Dikulushi transaction, Mawson will assume total responsibility for the area covered by the Dikulushi Mining Convention, including the Dikulushi mine and the Kapulo Project Area
Anvil Mining sells Dikulushi project to Mawson West

Anvil Mining Limited (TSX, ASX: AVM) is set to dispose of its 90% shareholding in the Dikulushi copper-silver mine in the Democratic Republic of Congo (DRC). Australian-based explorer Mawson West (‘Mawson’) will acquire the project in a share-based deal, which sees Anvil receive a 28% stake in the company.

Anvil will turn its attention instead to its significantly larger copper projects in the DRC, including the 60,000 tonnes per annum Kinsevere Stage II copper project, which is expected to begin commissioning during the first quarter of 2011.

Dikulushi has been on care and maintenance since the fourth quarter of 2008.

Mawson will issue Anvil 83 million shares, representing approximately 28% of the company’s share capital, subject to Mawson shareholder approval. Whilst Anvil holds at least a 15% stake, the agreement also includes top-up rights to ensure that Anvil can maintain its shareholdings through any future share issues or placements. Anvil will also have the right to appoint one director to the Mawson board.

The companies have an existing relationship in relation to the Kapulo Project area, located approximately 130km north-east of Dikulushi. In 2006 Anvil entered into a farm-out agreement with Mawson for Kapulo; the Australian based company now holds a 65% interest.

On closing of the Dikulushi transaction, Mawson will assume total responsibility for the area covered by the Dikulushi Mining Convention, including the Dikulushi mine and the Kapulo Project Area. At Kapulo a Mawson operated work program has completed a total of 14,608 meters of diamond drilling and 3,323m of reverse circulation drilling on the Shaba and Safari North deposits.

Mawson opted to de-list from the Australian Securities Exchange (ASX) in April 2009, after the board and its major shareholders decided that the company’s net assets were no longer represented by its share price. According to Mawson, the market was not rewarding its exploration performance after the ASX share price dropped from a 52-week high of A$0.25 to A$0.034, despite a number of very positive announcements in relation to its projects.

The unlisted public company has approximately 212m shares currently issued and outstanding. Mawson said its current valuation is approximately A$31.8m, based upon the share price of a recently completed A$9m private placement.

From Anvil’s perspective the disposal allows it to focus on its main priority in the DRC, Kinsevere - a major open pit mining operation which incorporates a HMS (Heavy Media Separation) processing plant and a 60,000tpa solvent-extraction electro-winning (SE-EW) plan that is currently being developed.

Anvil is also planning additional drilling at Kinsevere to extend the life of the project.

The company reported today that it continues to make good progress with the construction and fabrication works for the Kinsevere Stage II SX-EW development, with a number of key developments in recent weeks. The Kinsevere accommodation camp refurbishment is 95% complete and the primary project contractor - Ausenco - has almost completed its mobilisation with 20 members of personnel now on site. Similarly the South African construction subcontractors Group 5, has over 180 personnel now on site.

Plant and equipment including prefabricated steel work continues to be transported to the site. The engineering and design work is now virtually complete, as both Ausenco and Group 5 have previously worked on the project and a large amount of equipment and material is already on site.

Anvil also noted that work has now commenced on a scoping study into heap-leach options for lower grade material which will provide additional feed to the SX-EW plant. The low-grade material will be mined from the currently designed open pit shells,

Anvil said it is yet to determine its evaluation and development plans for the Mutoshi project, in the Kolwezi region of the DRC. At Mutoshi there are early indications of a large, though lower grade copper resource.

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