Avanti year-end numbers an improvement over 2009

Marketwire | March 25, 2011 | 5:59 am Base Metals Molybdenum 

Avanti Mining Inc. (TSX-V:AVT) reported a net loss of $4.9 million ($0.01 per share) for the year ended December 31, 2010 compared to a net loss of $6.2 million ($0.04 per share) for the comparable period in 2009. The company deferred $13.0 million (2009 – $5.7 million) relating to the development costs of the Kitsault property in northwest British Columbia.  The company had a cash balance of $18.0 million on hand at the end of 2010.

Highlights:

  • Increased landholdings by 300% through purchase of mineral tenures contiguous to the Kitsault project.
  • Closed public offering for $17 million in February 2010 to fund 2010 activities.
  • Entered into a debt advisory and arrangement agreement with West LB to arrange the debt portion of the project financing necessary to construct the Kitsault Project.
  • Enhanced project development team by hiring Ken Collison, formerly COO of Thompson Creek Metals, and Bob Jacko, P. Eng, formerly with Teck-Cominco.
  • Prevailed in a court case against Kitsault Resorts Ltd regarding confirmation of Avanti’s Statutory Right of Way through the town of Kitsault to Alice Arm, an inlet of the Pacific Ocean.
  • Signed a life-of-mine (LOM) tolling agreement with Molymet to process concentrate that will allow delivery of molybdenum oxide to Avanti customers that would meet London Metal Exchange specifications.
  • Entered into letter of intent (LOI) with a large Asian steel producer for selling up to 10% interest in the Kitsault project plus an off-take sales agreement for up to 20% of total Kitsault’s production for the first four years of production.
  • Entered into strategic alliance with SeAH Holdings Corp (SeAH), the largest specialty steel maker in Korea that commenced with a private placement of $11 million that occurred on December 30, 2010, and entered a LOI for the sale of up to 30% interest in the Kitsault project. However, Avanti does not intend to sell more than a total of 30% of the Kitsault project to funds its development.
  • Closed a $4 million flow-through share issuance on Dec 30, 2010 to fund exploration drilling in 2011.
  • Final Feasibility completed by AMEC Americas shows increase of US$247 million in the after tax NPV(8%) to US$794 million, using CPM Group’s price forecast ranging from US$13.75 to 18.25/lb over the mine life of 16 years. Total cash operating costs average US$5.47/lb molybdenum over LOM but lower in first five years due to higher grades. Strip ratio is 0.77 to1 and initial capital expenditure is estimated at US$795 million. LOM annual production averages 23.4 million lbs of molybdenum but averages above 29 million lbs during the first five years.
  • Initiated the environmental assessment process with the British Columbia Environmental Assessment office (BCEAO) and the Canadian Environmental Assessment Agency (CEAA) working in cooperation with the Nisga’a Lisims Government. The first public meeting on the draft Application Information Requirement (AIR) was held on March 15, 2011. When the public comment period ends on April 7th 2011 and the AIR is finalized and accepted, Avanti will be in a position to file the formal Environmental Assessment (EA) Application.

Avanti is developing the past-producing Kitsault molybdenum mine located north of Prince Rupert in British Columbia. Kitsault has proven and probable reserves of 232.5 million tonnes grading 0.081% Mo and containing 415.8 million pounds of molybdenum as outlined in theDec.15, 2010  technical report, available on the company’s website as well as at www.sedar.com. For more information click here

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