ZUG, Switzerland, Nov. 9, 2016 /CNW/ - Katanga Mining
Limited (TSX: KAT) ("Katanga" or the
"Company") today announces its financial results for the
third quarter of 2016. Katanga's Financial Statements and
Management's Discussion and Analysis will be filed on SEDAR,
www.sedar.com.
Highlights during the three and nine months ended
September 30, 2016
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|
|
|
|
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Three months
ended
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Nine months
ended
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|
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Sep 30,
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Jun 30,
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Sep 30,
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Sep 30,
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|
|
2016
|
2016
|
2015
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2016
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2015
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Financial
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|
|
|
|
|
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Realized copper
price
|
$/lb
|
-
|
-
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2.03
|
-
|
2.35
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Realized cobalt
price
|
$/lb
|
-
|
-
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10.53
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-
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11.17
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Total
sales*
|
$'000
|
(1,632)
|
(615)
|
202,006
|
(30,130)
|
671,198
|
- including
repricing*
|
$'000
|
(1,632)
|
(615)
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(32,039)
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(30,856)
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(57,496)
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EBITDA**
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$'000
|
(55,214)
|
(42,919)
|
(133,162)
|
(184,673)
|
(207,559)
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Net loss attributable
to shareholders
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$'000
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(99,499)
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(96,059)
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(188,193)
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(314,464)
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(300,693)
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C1 cash
costs*
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$/lb
|
-
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-
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3.32
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-
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2.92
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Cash flows from
operating activities
|
$'000
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(33,141)
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(42,007)
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(167,644)
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(153,990)
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(459,560)
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*
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Negative price and
sales amounts are a result of quality discounts, adverse repricing
and mark to market ("M2M") adjustments
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**
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Refer to Item 20
in the MD&A; Non-IFRS Measures.
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Financial
- Profitability during Q3 2016 YTD, when compared to Q3 2015 YTD,
was affected by:
- Quality discounts of $27.0
million on finalization of outstanding 2015 sales;
- Reduced operating expenditures due to the suspension of copper
and cobalt processing;
- Lower restructuring costs relating to contractor
demobilisations and employee redundancy costs, which totalled
$3.1 million in Q3 2016 YTD, compared
to $24.0 million in Q3 2015 YTD;
- The cessation of borrowing cost capitalisation during Q1 2015
due to the completion of the Phase 5 Expansion Project, resulting
in Amended Loan Facility interest expense of $227.0 million for Q3 2016 YTD (Q3 2015 YTD –
$166.6 million); and
- Income tax expense of $5.4
million in Q3 2016 YTD relating to 2014 and 2015 corporate
income taxes (Q3 2015 YTD - $111.1
million recovery). Deferred tax recognition on tax losses
carried forward in the DRC ceased in Q2 2015. Such recognition will
be reassessed on commissioning of the WOL Project.
- Cash outflows from operating activities decreased in Q3 2016
YTD, when compared to Q3 2015 YTD, due to lower working capital
requirements, notably for the reduction in inventories and
prepayments following the suspension of copper and cobalt
processing, as well as higher reduction of payables during Q3 2015
YTD. These cash outflows were funded by Glencore.
About Katanga Mining Limited
Katanga Mining
Limited operates a major mine complex in the Democratic Republic of Congo producing refined
copper and cobalt. The Company has the potential to become
Africa's largest copper producer
and the world's largest cobalt producer. Katanga is listed on the
Toronto Stock Exchange under the symbol KAT.
Forward Looking Statements
This press
release may contain forward-looking statements, including, but not
limited to, the suspension of copper and cobalt processing. Often,
but not always, forward-looking statements can be identified by the
use of words such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes",
or describes a "goal", or variation of such words and phrases or
state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
All forward-looking statements reflect the Company's beliefs
and assumptions based on information available at the time the
statements were made. Actual results or events may differ from
those predicted in these forward-looking statements. All of the
Company's forward-looking statements are qualified by the
assumptions that are stated or inherent in such forward-looking
statements, including the assumptions listed below. Although the
Company believes that these assumptions are reasonable, this list
is not exhaustive of factors that may affect any of the
forward-looking statements. The key assumptions that have been made
in connection with the forward-looking statements include the
following: the operations of the Company during the production
suspension and timeline for the recommencement of operations
remaining consistent with management's expectations, there being no
significant disruptions affecting the operations of the Company
whether due to labour disruptions, supply disruptions, power
disruptions, rollout of new equipment, damage to equipment or
otherwise; permitting, development, operations, expansion and
acquisitions at the Project being consistent with the Company's
current expectations; continued recognition of the Company's mining
concessions and other assets, rights, titles and interests in the
DRC; political and legal developments in the DRC being consistent
with its current expectations; the continued provision or
procurement of additional funding from Glencore for operations, the
completion of the T17 Underground Mine, the WOL Project and the
Power Project; the successful completion of, and realizing the
intended benefits from the WOL Project and the Power Project; new
equipment performs to expectations; the successful development of
the T17 Underground Mine; the exchange rate between the US dollar,
South African rand, British pounds, Canadian dollar, Swiss franc,
Congolese franc and Euro being approximately consistent with
current levels; certain price assumptions for copper and cobalt;
prices for diesel, natural gas, fuel oil, electricity and other key
supplies being approximately consistent with current levels;
production, operating expenses and cost of sales forecasts for the
Company meeting expectations; the accuracy of the current ore
reserve and mineral resource estimates of the Company (including
but not limited to ore tonnage and ore grade estimates); and labour
and material costs increasing on a basis consistent with the
Company's current expectations.
Forward-looking
statements involve known and unknown risks, future events,
conditions, uncertainties and other factors which may cause the
actual results, performance or achievements to be materially
different from any future results, prediction, projection,
forecast, performance or achievements expressed or implied by the
forward-looking statements. Such factors include, among others, the
unforeseen delays or changes to the WOL Project; actual results of
current exploration activities; actual results and interpretation
of current reclamation activities; conclusions of economic
evaluations; changes in project parameters as plans continue to be
refined; future prices of copper and cobalt; possible variations in
ore grade or recovery rates; failure of plant, equipment or
processes to operate as anticipated; accidents, labour disputes and
other risks of the mining industry; delays in obtaining
governmental approvals or financing or in the completion of
exploration, development or construction activities, delays due to
strikes or other work stoppage, both internal and external to the
Company as well as those factors disclosed in the Company's current
annual information form and other publicly filed documents.
Although Katanga has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
The
Company disclaims any intention or obligation to update or revise
any forward-looking statements whether as a result of new
information, future events, or otherwise, except in accordance with
applicable securities laws.
SOURCE Katanga Mining Limited