Feb 28 2011
Alexander Mining plc ('Alexander' or the 'Company'); (AIM:AXM)(TSX VENTURE:AXD) is pleased to announce the signing of a joint venture agreement (the 'JV Agreement') with Anvil Mining Limited ('Anvil') to build and operate a pilot plant (the 'Pilot Plant') to treat a total of 150,000 tonnes of cobalt ore at Anvil's Mutoshi deposit located in the Kolwezi region of the Katanga province in the Democratic Republic of the Congo (DRC).
The Pilot Plant will utilize Alexander's proprietary mineral processing technology (Ammleach®) to process ore from Anvil's Mutoshi deposit, for the production of cobalt metal.
Under the terms of the JV Agreement, the construction and development of the Pilot Plant is conditional upon Alexander obtaining financing. The JV will be managed by a joint operating committee; with technical specialists from both Alexander and Anvil working closely together. The construction programme for the Pilot Plant is to be produced and agreed by the joint operating committee.
Anvil will be responsible for providing a minimum of 150,000 tonnes of cobalt ore to the Pilot Plant as well as providing access and infrastructure support for construction of the Pilot Plant at Mutoshi.
Revenue generated from the sale of cobalt produced from the Pilot Plant shall be used first, to repay Alexander's capital and operating costs; second, to repay costs incurred by Anvil; and third, any remaining revenue is to be distributed equally between Alexander and Anvil.
The results from the Pilot Plant will form part of a decision by Anvil on progressing to a feasibility study for the development of a commercial-scale plant at Mutoshi.
Further technical and financial details are expected to be released in due course once determined.
Matt Sutcliffe, Chairman of Alexander, said:
"We are delighted to enter into this JV Agreement with Anvil, one of the pioneers in successfully advancing the mining industry in the DRC. As already announced, numerous other parties have been in discussions regarding the use of AmmLeach® in the DRC, owing to the potential for significant capital and operating cost savings. The JV Agreement is a major advance for AmmLeach®. "
Anvil's Mutoshi Project lies 10km east of Kolwezi in the Katanga Province and is owned by Société Minière de Kolwezi sprl ('SMK'), an exploration and mining joint venture between Anvil (70%), and La Générale Des Carrières et des Mines (Gécamines), the DRC state-owned mining company (30%). Laboratory amenability testwork using AmmLeach® has shown high recoveries should be achievable.
In March last year, Alexander released the findings of an independent technical expert's report, prepared by David Lunt of Stirling Process Engineering Pty Ltd., Perth, Australia, that was commissioned to examine the potential capital and operating cost savings for building and operating a typical 50,000 and 100,000 tonnes per year copper-cobalt mine in the DRC using AmmLeach®, compared with conventional processing technology using sulphuric acid. The results of this study indicated that under the two scenarios using heap leaching and agitated leaching, there should be substantial capital and operating cost savings by using the AmmLeach® technology. The savings ranged from US$94-177m (around 30%) for capital and US$29-51m (around 42%) per annum for operating costs.