Final straight.

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    African Mining.

    Dikulushi into the final straight

    The Dikulushi copper/silver project in the DRC looks at though it will be one of the first of the DRC mining projects stalled by years of instability to come on stream. It will produce its first concentrate grading 40 % copper and 1 230 g/t silver in August this year, reports Anvil Mining of Western Australia.

    Anvil recently issued a “Notice to Proceed” to MDM for Part A of the construction contract. Part A includes the completion of final engineering design for the HMS plant and associated infrastructure. It also covers the transportation of the completed barge sections from Richards Bay in South Africa to the Zambian town of Nchelenge on the eastern side of Lake Moero, the establishment of a barge construction platform and docking facility at Nchelenge, the assembly of the 48 m long and 10 m wide self-propelled barge and its launching and commissioning.

    The fixed lump sum amount for Part A of the Dikulushi construction contract is US$0,94 million. The combined value of both Parts A and B of the Dikulushi construction contract, for which MDM will take responsibility, is US$2,39 million.

    Anvil will fund its initial US$500 000 payment commitment to MDM by the transfer of 745 739 common shares in Golden Star Resources (GSR) to MDM. Anvil acquired 3 million shares in GSR on 15 August 2001, at a deemed price of US40 cents per share, following a conversion of its direct interest in Bogoso Gold Limited in Ghana, to an equity interest in GSR.

    Anvil intends to issue MDM a Notice to Proceed with Part B, immediately after finalisation of the US$4,5 million Project Financing Facility to be provided by RMB Resources Ltd, expected shortly.

    As part of the Dikulushi construction contract, and to satisfy the project financing requirements of RMB Resources, MDM has agreed to provide a Cost Overrun Facility in return for (a) an agreement with Anvil to enter into a negotiated contract for the construction of the Phase II flotation plant, and (b) MDM being issued 750 000 Anvil options, exercisable at AUS12 cents and with a term of 12 months. According to Anvil, the willingness of MDM to provide such a facility is a reflection of the quality of the resource and the confidence MDM has in being able to develop the project on time and within budget.

    The total costs for the development of Stage I of the Dikulushi project are now estimated at US$ 5,70 million. Permitting, barge supply and owner’s capital costs will account for US$1,15 million and the process plant, barge construction and infrastructure for US$2,34 million.

    Says Anvil’s Executive Director, Bill Turner: “The involvement of MDM and RMB Resources as partners with Anvil brings to the Dikulushi project significant technical and financial experience in the African environment. The flexibility shown by both MDM and RMB Resources in the lead up to initiating Part A of the Dikulushi Stage I HMS development will ensure that the Dikulushi project moves into production in a timely manner and has the best opportunity to reach its full potential at the earliest possible time, with the planned Stage II (flotation) and Stage III (underground) expansions. Subject to finalising the Project Financing Facility in the weeks ahead, we are on track to achieve first concentrate production in August this year.”

    Dikulushi, where the main ore mineral is chalcocite, has an independently audited Measured, Indicated and Inferred Resource (at a 2 % Cu cut-off) of 1,94 Mt at an average grade of 8,58 % copper and 266 g/t silver, 85 % of which is in the Measured and Indicated categories. Since Dikulushi is open at depth, with one of the deepest drill intersections (DIK 30) intersecting 16,7 m of 16 % copper and 522 g/t silver at a vertical depth of only 165 m, Anvil believes potential exists to significantly increase the resources of this deposit and extend the mine life well beyond its current eight years.

    The HMS approach is expected to produce a concentrate grading approximately 40 % copper and 1 230 g/t silver. It is envisaged that subsequent expansion, with the addition of a ball mill and flotation circuit (Stage II), will be funded out of project cashflows and will produce a very high-grade concentrate averaging 60 % copper and 1 935 g/t silver.

    The concentrate will be transported by barge across Lake Moero and trucked down to the Zambian Copperbelt (probably to Mufulira) for toll smelting and refining. The road from Lake Moero to Zambia is mainly asphalt surfaced, although there is a gravel section through the Congo Pedicle.

    The Stage I HMS facility will recover about 76 % of the mined copper and silver to the concentrate. Discarded fine-grained material, which is expected to grade approximately 2,5 % copper with significant silver credits, will be stockpiled for re-treatment through the proposed milling/flotation circuit.



 
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