ZUG, Switzerland, Dec. 16, 2019 /CNW/ - Katanga Mining Limited
(TSX: KAT) ("Katanga" or the "Company") today provides an
operational update on the Company's 75%-owned subsidiary Kamoto
Copper Company ("KCC").
Update concerning Significant Events
Land Rights Negotiations with Gécamines
As outlined in Katanga's 43-101 Technical Report (the "43-101
Report") issued on November 7 2019,
the Company has been in discussions with La Générale des Carrières
et des Mines ("Gécamines"), the Company's 25% joint venture partner
in KCC, to secure land for construction of a new life of mine
tailings facility and to enhance KCC's ability to more efficiently
operate its mines, facilities and other key infrastructure
requirements
Since the issuance of the 43-101 Report and Q3 production
results, these discussions between KCC and Gécamines with respect
to the rights required for the construction of the new tailings
facility have progressed and KCC is seeking to enter into a
contract with Gécamines for these rights. The negotiations are
ongoing but an agreement may occur as early as this month.
If KCC and Gécamines are able to reach an agreement on the
requested land areas, the risks for KCC's operations resulting from
land constraints, which are described in the 43-101 Report (and
summarized on page 78 of the Prospectus) would be mitigated.
However, there can be no guarantee that such an agreement will be
concluded.
Restatement of Historical Financial Statements filed in 2017
and OSC Settlement
On December 18, 2018, Katanga
announced that the Ontario Securities Commission ("OSC") approved a
global settlement agreement (the "OSC Settlement Agreement")
between staff of the OSC and the Company, certain of its former
directors and officers and its Chief Executive Officer, relating to
the investigation into certain of the Company's historical
disclosures. As a term of the OSC Settlement Agreement, the Company
also agreed to retain a consultant to complete a review of the
policies, procedures and effectiveness of: (a) the Company's metal
accounting with respect to reporting of copper and cobalt metal
production; and (b) the Company's financial accounting with respect
to the integration of production statistics, including the
calculation of cost of sales and inventory values. Full details of
OSC Settlement Agreement are available on the OSC website:
www.osc.gov.on.ca.
The Company has previously reported this year on the work
undertaken by the Consultant and the Company including their joint
development and submission to OSC Staff of a timetable for future
action including further testing in Q1 2020 of process upgrades
scheduled to be implemented by the end of 2019. The Company
confirms that all required accounting systems upgrades are now
fully or substantially implemented and expects the Consultant
testing to proceed as scheduled in Q1 of 2020.
Fatalities of Illegal Artisanal Miners
The armed
forces of the DRC (the "FADRC") remain in the area of the
operations of KCC. Since this FADRC intervention, which is
continuing, KCC has not become aware of any confirmed human rights
violations and the illegal miners who had occupied the KCC site
remain dispersed. KCC has continued to make significant efforts to
upgrade additional perimeter controls with nearly 20km of new
perimeter security fencing installed in H2 2019. Construction of
these additional perimeter controls will continue into 2020.
New Directors and Executive Officers of the Company and
KCC
The new management team of Mark
Davis (CEO of KML and Managing Director of KCC) and
Clint Donkin (Operations Director of
KCC) have been appointed and have taken up their roles.
Update on Major Projects
Cobalt Projects Update
Cobalt dryer #1 has now returned to operation at a reduced
capacity, of around 60% of design, following the completion of
temporary repairs. Dryer #2 remains offline for design
modifications, with commissioning scheduled during Q1 2020, and
reaching design capacity in Q2 2020. Once dryer #2 is operational,
dryer #1 will be taken off-line for design upgrade. Dryer #1 is
expected to then be back online and operating at full capacity in
Q2 2020. Full drying capacity should therefore be achieved from the
start of Q3 2020. Once full drying capacity is reached, KCC will be
in a position to export all of its cobalt production, including a
gradual drawdown of accumulated cobalt inventories.
The objective of the cobalt debottlenecking projects (the
"Cobalt Projects") at KCC 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. Execution of the Cobalt Projects at KCC is expected to
continue throughout 2020, with the additional thickening capacity
expected to come online during Q2 2020.
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. Phase 1 engineering,
procurement, fabrication and delivery and civil engineering is
complete, with structural, mechanical, plate work, piping and
electrical and instrumentation installation progressing.
Overall project progress of Phase 1 (Sulphuric Acid production) is
now more than 75% complete.
Commissioning of the Acid Plant remains scheduled to continue
through H1 2020, with completion of Phases 2 and 3 in H2 2020. KCC
has received applicable Environmental Impact
Study approvals from the Directorate for the Protection
of the Mining Environment.
Qualified Person
Tahir Usmani, PEng, APEGA, Mine
Technical Services Manager 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.
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
negotiations with Gécamines have progressed such that it may be
possible that an agreement would be entered into that would resolve
operational challenges resulting from land constraints at the KCC
mine site; 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 comprehensive business review targeting mining
efficiencies and processing improvements as well as enhancements to
product quality realizations and overhead cost reductions announced
on April 29, 2019 (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 continued
effectiveness of interim solutions for uranium identified in cobalt
or the completion of the ion exchange 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