Katanga Mining Announces 2019 First Quarter Production Results

Date : 04/30/2019 @ 12:02AM
Source : PR Newswire (Canada)
Stock : Katanga Mining Ltd (KAT)
Quote : 0.125  0.0 (0.00%) @ 8:38PM

Katanga Mining Announces 2019 First Quarter Production Results

Katanga Mining (TSX:KAT)
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ZUG, Switzerland, April 29, 2019 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announces its 2019 first quarter production results.

Major projects update

Q1 2019 WOL Project Update

The WOL project includes the construction of optimized copper and cobalt circuits with an average annual production of 300,000 tpa of copper cathode over life of mine (as described in the Company's technical report filed on SEDAR on April 2, 2018). This is achieved by adding additional leach capacity at Luilu in order to leach run-of-mine oxide ore directly rather than concentrating the oxide ore at the Kamoto concentrator "KTC".

Q1 2019 Cobalt Projects Update

The cobalt debottlenecking projects (the "Cobalt Projects") are expected to be completed during Q2 2019. Dry commissioning of two of the three filter presses has completed. The third filter press commissioning is awaiting arrival of the supplier commissioning team during the next planned maintenance shut-down, scheduled for May 2019. The MgO plant commissioning is complete. Commissioning of the first and second cobalt dryers has commenced, with expected completion during Q2 2019.

The objective of the Cobalt Projects is to upgrade the existing cobalt plant design in order to reduce bottlenecks by modification of the precipitation, thickening & filtration and drying & bagging processes. This will align the design of the plant with the average life-of-mine cobalt production plan of 30,000 tonnes per annum. These improvements will integrate with the existing WOL processing facilities at Luilu.

Q1 2019 Acid Plant Update

The acid plant (the "Acid Plant") is a sulphuric acid, sulphur dioxide production plant and steam turbine generator at KCC that is intended to improve the reliability of the supply of these reagents to the WOL project processing circuits and provide additional power for use in the WOL plant. In addition to a continuation of design work on the Acid Plant, major earthworks are complete, civil works are progressing and deliveries of major long lead items continue to arrive on site. Commissioning of the Acid Plant is expected to commence at the end of 2019.

Production highlights during the three months ended March 31, 2019, and cobalt update

Copper and Cobalt Production

Copper cathode increased to 57,175 tonnes in Q1 2019 from 49,770 tonnes in Q4 2018.

Cobalt contained in hydroxide decreased to 3,511 tonnes in Q1 2019 from 4,646 tonnes in Q4 2018.

In Q4 2018, the Company announced that its 75%-owned DRC subsidiary Kamoto Copper Company ("KCC") had temporarily suspended the export and sale of cobalt due to the presence of uranium detected in the cobalt hydroxide at levels that exceed the acceptable limit allowed for export of the product through main African ports to customers. 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 (the "Applicable Regulations"). 

While KCC, together with the Company and KCC's 25% shareholder, DRC state-owned La Générale des Carrières et des Mines ("Gécamines"), have been working with the DRC government's Ministry of Mines and the Congolese Atomic Energy Agency (CGEA) on a long-term technical solution in the form of an ion exchange plant (the "Ion Exchange Plant"), KCC has also been exploring various alternative interim solutions, both operational and regulatory, resulting in the recommencement of the export and sale of a limited quantity of cobalt.

Through interim operational solutions, KCC had produced, as at March 31, 2019, approximately 930 tonnes of contained cobalt since January 2019 that complies with Applicable Regulations. This represents approximately 22.5 percent of the total production of contained cobalt since January 2019. As previously disclosed and confirmed by the competent DRC authorities, KCC has resumed the export of its cobalt hydroxide complying with the Applicable Regulations and such resumption of exports remains subject to the regular DRC export procedures, which include the continued monitoring by CGEA and by the relevant mining authorities.

Subject to (i) obtaining the necessary authorizations for the Ion Exchange Plant and (ii) the completion of a feasibility study including the detailed engineering design of such plant, the construction is expected to commence in Q2 2019 and take approximately 9 months. The purchase of long lead items in relation to the Ion Exchange Plant has been approved by the boards of the Company and KCC respectively.

Mining



Three months ended



Mar 31,
2019

Dec 31,
2018

Mar 31,
2018

Ore mined*/**










KOV open pit

tonnes

1,082,137

1,465,641

775,393

Mashamba East open pit

tonnes

1,086,595

851,968

626,808

Total open pits

tonnes

2,168,732

2,317,609

1,402,201






KTO underground

tonnes

139,305

154,022

-

Total ore mined

tonnes

2,308,037

2,471,631

1,402,201






Waste mined and primary development*










KOV open pit

tonnes

7,282,726

8,057,522

6,030,880

Mashamba East open pit

tonnes

2,977,252

5,777,914

3,308,558

Total open pits

tonnes

10,259,978

13,835,436

9,339,438






KTO underground

primary development

meters

137

151

539

Total waste mined***

tonnes

10,259,978

13,835,436

9,339,438






Total material mined










KOV open pit

tonnes

8,364,863

9,523,163

6,806,273

Mashamba East open pit

tonnes

4,063,847

6,629,882

3,935,366

Total open pits

tonnes

12,428,710

16,153,045

10,741,639






KTO underground

tonnes

139,305

154,022

-

Total material mined***

tonnes

12,568,015

16,307,067

10,741,639






Total contained copper

tonnes

67,616

61,393

28,761






Ore summary










Total primary ore mined

tonnes

1,583,829

1,648,105

644,343

Average Cu grade

%

3.87

3.28

3.92

Average Co grade

%

0.38

0.41

0.55






Total low-grade ore mined

tonnes

548,178

616,436

204,815

Average Cu grade

%

0.96

1.04

1.08

Average Co grade

%

0.20

0.18

0.22






Total cobalt ore mined

tonnes

176,030

207,090

553,043

Average Co grade

%

0.73

0.58

0.51

Average Cu grade

%

0.57

0.42

0.23

Total ore mined

tonnes

2,308,037

2,471,631

1,402,201






Average Cu grade

%

2.93

2.48

2.05

Average Co grade

%

0.37

0.37

0.49



*

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 decreased to 2,308,037 tonnes in Q1 2019 from 2,471,631 tonnes in Q4 2018.

Total waste mined decreased to 10,259,978 tonnes in Q1 2019 from 13,835,436 tonnes in Q4 2018.

Total contained copper increased to 67,616 tonnes in Q1 2019 from 61,393 tonnes in Q4 2018.

The decrease in total material mined in the combined open pits in Q1 2019 compared to Q4 2018 reflects an increase in rainfall and lower than planned shovel utilization. 

The decrease in total ore mined in Q1 2019 compared to Q4 2018 was offset by a higher average copper grade, in line with the optimized mine 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 for future feed into the processing plant.

Kamoto concentrator



Three months ended



Mar 31,
2019

Dec 31,
 2018

Mar 31,
2018

Total material milled and processed

tonnes

2,707,115

2,482,663

1,398,995*






KITD material processed

tonnes

747,327

726,206

520,323*

Cu grade in ore

%

1.50

1.55

1.43

Co grade in ore

%

0.18

0.18

0.17






Open pit ore milled

tonnes

1,818,399

1,600,911

878,672

Cu grade in ore

%

3.41

3.18

3.92

Co grade in ore

%

0.37

0.42

0.55






Underground ore milled

tonnes

141,388

155,546

-

Cu grade in ore

%

3.64

3.40

-

Co grade in ore

%

0.52

0.65

-






Production










Oxide concentrate

tonnes

37,536

35,752

23,018*

Sulphide concentrate

tonnes

29,750

30,026

24,991*

Total concentrate produced

tonnes

67,286

65,778

48,009*

Cu grade in concentrate

%

19.25

20.77

16.07*

Co grade in concentrate

%

2.14

2.68

0.93*






Oxide feed received at Luilu

tonnes

1,822,820

1,602,666

828,209*

Cu grade in oxide feed

%

3.12

2.86

3.18*






Total contained copper

tonnes

69,818

59,527

34,022*



*

KITD material consists of a non-homogeneous combination of oxide and sulphide tailings material deposited from the former concentration processes at the KTC Concentrator that are hydro-mined for reprocessing in the KTC Concentrator. A physical survey of the KITD deposit in Q3 2018 highlighted an updated measurement of the moisture content in KITD material and, accordingly, lower total tonnes processed from KITD YTD. This adjustment had no impact on the volumes of saleable copper cathode produced and an immaterial impact on the financial results of the Company.

 

Total material milled and processed increased to 2,707,115 tonnes in Q1 2019 from 2,482,663 tonnes in Q4 2018.

Total concentrate produced increased to 67,286 tonnes in Q1 2019 from 65,778 tonnes in Q4 2018.

Total oxide feed received at Luilu increased to 1,822,820 tonnes in Q1 2019 from 1,602,666 tonnes in Q4 2018.

Total contained copper in concentrate and oxide feed produced increased to 69,818 tonnes in Q1 2019 from 59,527 tonnes in Q4 2018.

The increase in total material milled and processed in Q1 2019 compared to Q4 2018 is driven by the increase in milling capacity from the ramp-up and optimization of CM6 and CM7 following commissioning at the end of 2018, as well as increased availabilities and utilization of the CM5 oxide mill.

Luilu metallurgical plant



Three months ended



Mar 31,
2019

Dec 31,
2018

Mar 31,
2018

WOL feed – oxide concentrate*

tonnes

37,536

35,752

77,436

WOL feed – oxide feed

tonnes

1,822,820

1,602,666

828,208

Total oxide feed

tonnes

1,860,356

1,638,418

905,645






Total oxide Cu grade

%

3.28

3.07

4.04

Total oxide Co grade

%

0.37

0.43

0.55






Sulphide roaster feed

tonnes

26,772

25,588

-






Sulphide Cu grade

%

26.92

27.27

-

Sulphide Co grade

%

3.06

3.86

-






Production










Copper cathode

tonnes

57,175

49,770

27,677

Cobalt contained in hydroxide

tonnes

3,511

4,646

525



*

consists of amounts produced at KTC during comparable periods plus inventory drawdown.

 

Total copper cathode produced increased to 57,175 tonnes in Q1 2019 from 49,770 tonnes in Q4 2018.

Total cobalt contained in hydroxide decreased to 3,511 tonnes in Q1 2019 from 4,646 tonnes in Q4 2018.

The increase in the production of copper cathode is related to the increase in total oxide feed received, driven by an increase in milling capacity from the ramp-up and optimization of related assets at KTC.

The decrease in the production of cobalt contained in hydroxide is due to the reduced recovery of cobalt and lower than budgeted feed rates, which was driven by the process of uranium precipitation from the cobalt hydroxide solution, which sought to remove excess levels of uranium until the expected commissioning of the Ion Exchange Plant.

Outlook

Total copper cathode produced for Q1 2019 of 57,175 tonnes was roughly in line with management's expectations of 59,600 tonnes. A full and comprehensive business review ("Review") recently commenced, targeting efficiency and recovery improvements, better product quality realizations and significant cost reductions over the remainder of 2019 and into 2020 with the objective of improving Katanga's prospects. The Company now expects that 2019 production of copper and cobalt will be lower than the previously provided guidance of approximately 285,000 tonnes of copper and approximately 26,000 tonnes of contained cobalt. Key current priorities remain construction and completion of the Acid Plant, Cobalt Projects and Ion Exchange Plant. During this important project delivery period, as noted above, KCC will focus on improvements in copper cathode grades, metal recoveries, overall equipment availabilities and reduced spend. The Company intends to update the market with revised guidance once the Review has been completed, which is expected to be during Q3 2019.

Long term production of 300,000 tpa of copper cathode and 30,000 tpa of cobalt contained in hydroxide on average over life of mine remains unchanged.

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.

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, including that the WOL project will perform to management's expectations, the Cobalt Projects and Acid Plant will be completed and perform to expectation, successful outcome of the Review, availability and utilization of plant and equipment, 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 new 2018 DRC Mining Code). 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.

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

Copyright 2019 Canada NewsWire

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