ZUG, SWITZERLAND, Oct. 24, 2019 /CNW/ - Katanga Mining Limited
(TSX: KAT) ("Katanga" or the "Company") today provides an update on
its major projects and announces its 2019 third quarter production
results at the Company's 75%-owned subsidiary Kamoto Copper Company
("KCC").
Update on Major Projects
Cobalt Projects Update
The cobalt debottlenecking
projects (the "Cobalt Projects") at KCC are expected to continue
throughout 2020. Commissioning of two filter presses was completed
earlier in the year, while the third filter press was commissioned
during Q3 2019. Commissioning of the magnesium oxide ("MgO") plant
was completed earlier in the year while commissioning of the cobalt
dryers concluded with additional works required due to mechanical
failure during Q3 2019.
Cobalt dryer #1 is undergoing a temporary repair which
should be completed in Q4 2019. Dryer #2 is undergoing
design modifications and is expected to be commissioned during Q1
2020. Once the permanent upgrade is completed on dryer #2,
dryer #1 will be taken off-line to commence the upgrade. Ramp
up to full drying capacity is targeted for mid-2020. Once
full drying capacity is reached, KCC will be in a position to
export the dry cobalt production, including from processing
accumulated cobalt inventories.
The objective of the Cobalt Projects is to upgrade the existing
cobalt plant design in order to reduce bottlenecks through
modification of the precipitation, thickening, filtration, drying
and bagging processes. This will align the design of the cobalt
plant with the average life-of-mine cobalt production plan of
30,000 tonnes per annum. These improvements integrate with the
existing WOL processing facilities at Luilu.
Acid Plant Update
The Sulphuric Acid production (Phase 1), Sulphur Dioxide
production (Phase 2) and Steam Turbine Generator (Phase 3) project
at KCC (the "Acid Plant"), continues to progress. All civil works
have been completed for Phase 1 (Sulphuric Acid Production Plant)
with Phases 2 and 3 civil works scheduled for completion in Q4
2019. Structural, mechanical, plate work, piping and electrical and
instrumentation installation are progressing. Design has been
completed, and some procurement items will continue into Q4 2019,
but mainly relating to the Sulphur dioxide production (Phase 2) and
the Steam Turbine Generator (Phase 3).
KCC has received from the Directorate for the Protection of the
Mining Environment ("DPEM"), the applicable Environmental Impact
Study approvals. Commissioning of the Acid Plant is scheduled
to continue through H1 2020.
Production highlights during the nine months ended
September 30, 2019 and Cobalt
Update
Copper and Cobalt Production
Copper cathode production increased to 59,424 tonnes in Q3 2019
from 52,514 tonnes in Q2 2019.
Cobalt contained in hydroxide production increased to
4,763 tonnes in Q3 2019 from 2,607 tonnes in Q2
2019. Of the total cobalt production in Q3 2019, 97%
complied with Applicable Regulations (see below).
As previously announced in Q4 2018, KCC temporarily suspended
the export and sale of cobalt due to the presence of uranium
detected in the cobalt hydroxide at levels that exceeded the
acceptable limit allowed for export of the product through main
African ports. The low levels of radioactivity detected in the
uranium to date do not present a health and safety risk.
On April 25, 2019, KCC resumed the
export and sale of a limited quantity of cobalt that complies with
both international and local Democratic
Republic of Congo ("DRC") transport regulations with respect
to the levels of uranium contained in the cobalt hydroxide (the
"Applicable Regulations"). An aggregate of 97% of the cobalt
hydroxide produced in Q3 2019 (97% in Q2 2019) complied with
international transport regulations and was also below the
acceptable limit of contained uranium allowed for export through
main African ports.
KCC, together with the Company and KCC's 25% shareholder, DRC
state-owned La Générale des Carrières et des Mines ("Gécamines"),
has been working with the DRC government's Ministry of Mines and
the Congolese Atomic Energy Agency on a long-term technical
solution in the form of an ion exchange plant (the "IX Plant"). KCC
has also implemented various alternative interim solutions, both
operational and regulatory, resulting in the recommencement of the
export and sale of a limited quantity of cobalt. The IX Plant has
been approved by the boards of the Company and KCC respectively and
remains as a potential long term option.
Following the authorization procedures of the IX Plant required
by the 2018 Mining Code, the Ministry of Mines has requested KCC to
submit a complete bankable feasibility study ("BFS") for the entire
KCC project rather than a feasibility study limited to the IX
Plant. Given the effectiveness of the interim solutions using
phosphoric acid over the past two quarters, KCC undertook to
provide a BFS for the entire KCC project by 2019 year-end, which
will cover the long term IX Plant option.
Mining
|
|
Three months
ended
|
Nine months
ended
|
|
|
Sep
30,
|
Jun 30,
|
Sep 30,
|
Sep
30,
|
Sep 30,
|
|
|
2019
|
2019
|
2018
|
2019
|
2018
|
Ore
mined*/**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KOV open
pit
|
tonnes
|
1,728,062
|
981,529
|
2,343,785
|
3,791,728
|
5,013,930
|
Mashamba East open
pit
|
tonnes
|
1,674,866
|
1,334,862
|
953,909
|
4,096,323
|
2,466,508
|
Total open
pits
|
tonnes
|
3,402,928
|
2,316,391
|
3,297,694
|
7,888,051
|
7,480,438
|
|
|
|
|
|
|
|
KTO
underground
|
tonnes
|
158,116
|
142,131
|
141,973
|
439,552
|
215,658
|
Total ore
mined
|
tonnes
|
3,561,044
|
2,458,522
|
3,439,667
|
8,327,603
|
7,696,096
|
|
|
|
|
|
|
|
Waste mined and
primary development*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KOV open
pit
|
tonnes
|
9,604,164
|
8,891,254
|
8,369,083
|
25,778,144
|
21,700,119
|
Mashamba East open
pit
|
tonnes
|
5,161,024
|
4,769,012
|
6,996,303
|
12,907,288
|
15,446,130
|
Total open
pits
|
tonnes
|
14,765,188
|
13,660,266
|
15,365,386
|
38,685,432
|
37,146,249
|
|
|
|
|
|
|
|
KTO
underground
primary
development
|
meters
|
-
|
-
|
126
|
137
|
976
|
Total waste
mined***
|
tonnes
|
14,765,188
|
13,660,226
|
15,365,386
|
38,685,432
|
37,146,249
|
|
|
|
|
|
|
|
Total material
mined
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KOV open
pit
|
tonnes
|
11,332,226
|
9,872,783
|
10,712,868
|
29,569,872
|
26,714,049
|
Mashamba East open
pit
|
tonnes
|
6,835,890
|
6,103,874
|
7,950,212
|
17,003,611
|
17,912,638
|
Total open
pits
|
tonnes
|
18,168,116
|
15,976,657
|
18,663,080
|
46,573,483
|
44,626,687
|
|
|
|
|
|
|
|
KTO
underground
|
tonnes
|
158,116
|
142,131
|
141,973
|
439,552
|
215,658
|
Total material
mined***
|
tonnes
|
18,326,232
|
16,118,788
|
18,805,053
|
47,013,035
|
44,842,345
|
|
|
|
|
|
|
|
Total contained
copper
|
tonnes
|
112,015
|
68,731
|
69,643
|
248,363
|
156,754
|
Ore
summary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total primary ore
mined
|
tonnes
|
2,978,497
|
1,900,443
|
1,655,605
|
6,462,769
|
3,674,390
|
Average Cu
grade
|
%
|
3.59
|
3.38
|
3.48
|
3.60
|
3.58
|
Average Co
grade
|
%
|
0.50
|
0.33
|
0.51
|
0.42
|
0.48
|
|
|
|
|
|
|
|
Total very low-grade
ore mined
|
tonnes
|
471,759
|
339,812
|
789,380
|
1,359,751
|
1,683,266
|
Average Cu
grade
|
%
|
0.95
|
0.98
|
0.97
|
0.96
|
1.00
|
Average Co
grade
|
%
|
0.25
|
0.24
|
0.21
|
0.23
|
0.21
|
|
|
|
|
|
|
|
Total cobalt ore
mined
|
tonnes
|
110,789
|
218,266
|
994,682
|
505,083
|
2,338,440
|
Average Co
grade
|
%
|
0.67
|
0.78
|
0.57
|
0.74
|
0.59
|
Average Cu
grade
|
%
|
0.61
|
0.53
|
0.44
|
0.56
|
0.36
|
Total ore
mined
|
tonnes
|
3,561,045
|
2,458,521
|
3,439,667
|
8,327,603
|
7,696,096
|
|
|
|
|
|
|
|
Average Cu
grade
|
%
|
3.15
|
2.80
|
2.02
|
2.98
|
2.04
|
Average Co
grade
|
%
|
0.47
|
0.36
|
0.46
|
0.41
|
0.45
|
|
|
*
|
These segments
include classification of ore volumes into different categories,
being primary copper containing ore, low-grade copper containing
ore (but still above cut-off grade) and cobalt containing ore (that
contains copper under the copper cut-off grade but cobalt over the
cobalt cut-off grade). The primary ore component is defined as
having a Cu grade of greater than 1.25%, the low-grade component is
defined as having a Cu grade between 0.65% and 1.25% and the cobalt
ore component is defined as having a Cu grade of less than 0.65%
and Co grade greater than 0.30%.
|
**
|
Excludes any ore
hydro-mined out of Kamoto Interim Tailings Dam ("KITD") as this is
not a traditional mining operation, but instead, a hydro-mining
reclamation project.
|
***
|
Underground waste is
excluded.
|
Total ore mined increased to 3,561,045 tonnes in Q3 2019
from 2,458,521 tonnes in Q2 2019. Total ore mined increased to
8,327,603 tonnes in Q3 2019 YTD from 7,696,096 tonnes in Q3 2018
YTD.
Total waste mined increased to 14,765,188 tonnes in Q3 2019 from
13,660,266 tonnes in Q2 2019. Total waste mined increased to
38,685,432 tonnes in Q3 2019 YTD from 37,146,249 tonnes in Q3 2018
YTD.
Total contained copper increased to 112,015 tonnes in Q3 2019
from 68,731 tonnes in Q2 2019. Total contained copper increased to
248,363 tonnes in Q3 2019 YTD from 156,754 tonnes in Q3 2018
YTD.
The increase in total material mined in the combined open pits
in Q3 2019 compared to Q3 2018 related to the ramp-up of production
and commissioning of the second Whole Ore Leach train in H2
2018.
The increase in total material mined in the open pits in Q3 2019
compared to Q2 2019 reflects the increase of stockpiles ahead of
the wet season and subsequent ramp-up of production in line with
the optimized mine plan and EW refurbishment plan.
The ongoing mining and stockpiling of low-grade ore and cobalt
ore reflects the optimization of the long-term feed strategy. As a
result of this strategy, low-grade ore and cobalt ore are currently
being stockpiled and will be fed into the processing plant on a
planned basis in the future.
Kamoto Concentrator
|
|
Three months
ended
|
Nine months
ended
|
|
|
Sep
30,
2019
|
Jun 30,
2019
|
Sep 30,
2018
|
Sep
30,
2019
|
Sep 30,
2018
|
Total material
milled and processed
|
tonnes
|
2,467,572
|
2,574,400
|
1,944,616
|
7,749,087
|
5,046,933
|
|
|
|
|
|
|
|
KITD material
processed
|
tonnes
|
561,506
|
773,672
|
620,909
|
2,082,505
|
1,756,963
|
Cu grade in
ore
|
%
|
1.22
|
1.32
|
1.63
|
1.36
|
1.58
|
Co grade in
ore
|
%
|
0.17
|
0.16
|
0.18
|
0.17
|
0.17
|
|
|
|
|
|
|
|
Open pit ore
milled
|
tonnes
|
1,768,335
|
1,642,357
|
1,178,617
|
5,229,092
|
3,102,110
|
Cu grade in
ore
|
%
|
3.50
|
3.14
|
3.26
|
3.35
|
3.56
|
Co grade in
ore
|
%
|
0.43
|
0.28
|
0.47
|
0.37
|
0.47
|
|
|
|
|
|
|
|
Underground ore
milled
|
tonnes
|
137,731
|
158,371
|
145,090
|
437,490
|
187,860
|
Cu grade in
ore
|
%
|
3.40
|
3.64
|
3.28
|
3.56
|
3.28
|
Co grade in
ore
|
%
|
0.65
|
0.55
|
0.65
|
0.57
|
0.62
|
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxide
concentrate
|
tonnes
|
26,376
|
38,663
|
21,621
|
102,575
|
71,342
|
Sulphide
concentrate
|
tonnes
|
26,349
|
28,165
|
27,501
|
84,264
|
68,463
|
Total concentrate
produced
|
tonnes
|
52,725
|
66,828
|
49,122
|
186,839
|
139,805
|
Cu grade in
concentrate
|
%
|
20.45
|
18.84
|
24.37
|
19.44
|
19.91
|
Co grade in
concentrate
|
%
|
2.47
|
2.14
|
2.96
|
2.23
|
1.82
|
|
|
|
|
|
|
|
Oxide feed
received at Luilu
|
tonnes
|
1,748,911
|
1,599,507
|
1,195,149
|
5,171,237
|
3,064,107
|
Cu grade in oxide
feed
|
%
|
3.16
|
2.93
|
2.99
|
3.08
|
3.11
|
|
|
|
|
|
|
|
Total contained
copper
|
tonnes
|
66,057
|
59,485
|
47,660
|
195,359
|
123,039
|
Total material milled and processed decreased to 2,467,572
tonnes in Q3 2019 from 2,574,400 tonnes in Q2 2019. Total material
milled and processed increased to 7,749,087 tonnes in Q3 2019 YTD
from 5,046,933 tonnes in Q3 2018 YTD.
Total concentrate produced decreased to 52,725 tonnes in Q3 2019
from 66,828 tonnes in Q2 2019. Total concentrate produced increased
to 186,839 tonnes in Q3 2019 YTD from 139,805 tonnes in Q3 2018
YTD.
Total oxide feed received at Luilu increased to 1,748,911 tonnes
in Q3 2019 from 1,599,507 tonnes in Q2 2019. Total oxide feed
received at Luilu increased to 5,171,237 tonnes in Q3 2019 YTD from
3,064,107 tonnes in Q3 2018 YTD.
Total contained copper in concentrate and oxide feed produced
increased to 66,057 tonnes in Q3 2019 from 59,485 tonnes in Q2
2019. Total contained copper in concentrate and oxide feed produced
increased to 195,359 tonnes in Q3 2019 YTD from 123,039 tonnes in
Q3 2018 YTD.
The increase in total material milled and processed in Q3 2019
compared to Q3 2018 is driven by the increase in milling capacity
due to the ramp-up and optimization of CM6 and
CM7, following commissioning at the end of 2018, as
well as increased availability from the CM5 oxide mill.
The decrease in total material milled and processed in Q3 2019
compared to Q2 2019 is driven by the refurbishment of the EW
plant.
Luilu metallurgical plant
|
|
Three months
ended
|
Nine months
ended
|
|
|
Sep
30,
2019
|
Jun 30,
2019
|
Sep 30,
2018
|
Sep
30,
2019
|
Sep 30,
2018
|
WOL feed – oxide
concentrate*
|
tonnes
|
26,376
|
38,663
|
22,096
|
102,575
|
162,565
|
WOL feed – oxide
feed
|
tonnes
|
1,748,911
|
1,599,507
|
1,195,149
|
5,171,237
|
3,064,107
|
Total oxide
feed
|
tonnes
|
1,775,287
|
1,638,170
|
1,217,245
|
5,273,812
|
3,226,672
|
|
|
|
|
|
|
|
Total oxide Cu
grade
|
%
|
3.28
|
3.14
|
3.2
|
3.24
|
3.62
|
Total oxide Co
grade
|
%
|
0.43
|
0.27
|
0.44
|
0.36
|
0.46
|
|
|
|
|
|
|
|
Sulphide roaster
feed
|
tonnes
|
25,089
|
27,589
|
26,688
|
79,451
|
32,511
|
|
|
|
|
|
|
|
Sulphide Cu
grade
|
%
|
26.05
|
26.13
|
29.98
|
26.38
|
30.66
|
Sulphide Co
grade
|
%
|
3.67
|
3.28
|
4.22
|
3.33
|
4.18
|
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
cathode
|
tonnes
|
59,424
|
52,514
|
39,296
|
169,114
|
102,587
|
Cobalt contained
in hydroxide
|
tonnes
|
4,763
|
2,607
|
3,512
|
10,881
|
6,466
|
*
|
consists of amounts
produced at KTC during comparable periods plus inventory
drawdown
|
Total copper cathode produced increased to 59,424 tonnes in Q3
2019 from 52,514 tonnes in Q2 2019. Total copper cathode produced
increased to 169,114 tonnes in Q3 2019 YTD from 102,587 tonnes in
Q3 2018 YTD.
Total cobalt contained in hydroxide increased to 4,763 tonnes in
Q3 2019 from 2,607 tonnes in Q2 2019. Total cobalt contained in
hydroxide increased to 10,881 tonnes in Q3 2019 YTD from 6,466
tonnes in Q3 2018 YTD.
The increase in Q3 2019 copper cathode and cobalt contained in
hydroxide production compared to Q3 2018 was driven by a ramp-up of
oxide material treatment rates at the Luilu refinery.
The increase in copper cathode production in Q3 2019 from Q2
2019 was due to progress made on the EW refurbishment program and
current efficiency improvements.
Outlook
On April 29, 2019 the Company
announced that KCC had commenced a comprehensive business review
targeting mining efficiencies and processing improvements as well
as enhancements to product quality realizations and overhead cost
reductions (the "Review").
Initial indications suggest there may be scope for margin
improvements in the order of $200-250
million per annum. Further work, seeking to develop detailed
implementation plans to deliver these improvements, is being
undertaken, which if successful, are expected to be realizable by
2022.
To effect these improvements, KCC has created a transformation
office to facilitate a 36 months turnaround plan, designed to
unlock the potential of the people and assets across the site. To
ensure timely project delivery, KCC has defined business priorities
such as, but not limited to, improved efficiencies, maintenance,
labor productivity and production quality, while decreasing the
costs associated with procurement, sourcing and information
technology.
These improvements are expected to materially increase the cash
flow generation of KCC from 2022, when it is projected to achieve
targeted life of mine average production of approximately 300kt of
copper and 30kt of cobalt, resulting in a steady state copper unit
cash cost of $1.65/lb, before cobalt
by-product credits, and $0.75/lb
after cobalt by-products revenue, net of allocable cobalt direct
production and realization/selling costs of c$0.60/lb.1
Production guidance for copper and cobalt has been moderately
revised, compared to the August 2019
release, as follows:
Commodity
|
|
Units
|
Production
Guidance
|
|
|
|
FY 2019
|
FY 2020
|
FY 2021
|
Copper(1)
|
|
Kt
|
233
|
270
|
295
|
Cobalt(2)
|
|
Kt
|
16
|
29
|
32
|
Notes:
|
(1)
|
Annual copper
production guidance subject to +/- 15 kt variation
|
(2)
|
Annual cobalt
production guidance subject to +/- 2 kt variation.
|
Notwithstanding these targets, production in any given year will
fluctuate as a function of numerous factors, including availability
and utilization of the plant, geological and mining conditions,
logistics, availability of reagents, availability of electricity,
macro-economic factors such as commodity prices, input costs and
geopolitical developments (including the 2018 Mining Code)
Qualified Person
Tahir Usmani, PEng, APEGA, Chief
Mine Planning Engineer of KCC, has reviewed and approved the
scientific and technical disclosure in this news release. Mr.
Usmani is a "qualified person" for the purposes of NI 43-101 -
Standards of Disclosure for Mineral Projects.
________________
|
1
|
Realization costs are
based on an assumed copper price of $6,500/t and realized cobalt
price of $15/lb.
|
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.
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.
This press release may contain forward-looking statements. 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. The key assumptions that have been made in connection
with the forward-looking statements include the following: that the
Company will complete the ramp up of full drying capacity as part
of the Cobalt Projects in the time expected and realize the
anticipated benefits of the Cobalt Projects; there being no
significant disruptions affecting the operations of the Company
whether due to legal disputes, judicial action, labour disruptions,
supply disruptions, power disruptions, rollout of new equipment,
damage to equipment or otherwise; permitting, development,
operations, expansion and acquisitions at KCC being consistent with
the Company's current expectations; the Company being able to
confirm the margin and cash flow improvements identified by the
Review and then successfully implementing any such improvements;
continued recognition of the Company's mining concessions and other
assets, rights, titles and interests in the DRC; the completion of
the ion exchange plant in the time contemplated, at the expected
cost of construction; the completion of the Acid Plant in the time
contemplated, at the expected cost of construction; 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; new equipment performing
consistent with expectations; 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. 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