ZUG, Switzerland, Nov. 20, 2017 /CNW/ - Katanga Mining Limited
(TSX: KAT) ("Katanga" or the "Company") today announces that it
has: (i) completed the previously announced internal review by the
independent directors of the Company of certain of the Company's
past accounting, (ii) completed the restatement of certain
historical financial statements and related management's discussion
and analysis ("MD&A"), (iii) filed its unaudited interim
condensed consolidated financial statements for the three and six
months ended June 30, 2017 (and
accompanying MD&A), (iv) filed its unaudited interim condensed
consolidated financial statements for the three and nine months
ended September 30, 2017 (and
accompanying MD&A), (v) made changes to its Board and
management, and (vi) been cooperating with the Ontario Securities
Commission ("OSC") in the course of an on-going OSC Enforcement
Staff investigation (the "OSC Investigation", as described
below).
BACKGROUND OF THE REVIEW
Following the end of the second quarter of fiscal 2017, in the
course of the OSC Investigation, information drawing into question
the appropriateness of certain of the Company's accounting
practices came to the attention of the independent directors of the
Company. This information led the Board of Directors (the "Board")
of the Company to request the independent directors of the Board,
being Robert G. Wardell,
Terry Robinson and Hugh Stoyell (the "Independent Directors"), to
conduct a review of these practices. At the direction of the
Independent Directors, an internal review (the "Review") was
undertaken. The Independent Directors engaged Canadian legal
counsel, and a multinational accounting firm, to assist the
Independent Directors in conducting the Review. The Review
identified accounting practices that, among other things,
incorrectly recorded the total tonnage of finished copper cathode
production which resulted in an overstatement of finished product
inventories and incorrectly recorded the valuation of copper
concentrate included in work in progress inventories, the valuation
of ore in stockpile inventories and the amounts of property, plant
and equipment during 2016, 2015 and prior periods, which practices
were not appropriate and required adjustment.
The restatement adjustments related to the following items and
are described below and in the tables attached as Schedule "A" to
this press release:
- Receivables;
- Inventories;
- Property, plant and equipment;
- Non-current inventories;
- Deferred income tax assets;
- Amended loan facilities - related parties;
- Accounts payable and accrued liabilities;
- Accumulated deficit;
- Non-controlling interests;
- Loss and comprehensive loss;
- Cost of sales;
- Operating expenses;
- Depreciation; and
- Income tax.
All dollar amounts are in US currency unless otherwise
indicated.
DETAILS OF ACCOUNTING RESTATEMENTS
The following is a more detailed description of the restatement
adjustments.
Overstatement of Copper Cathode Production in Fiscal
2014
The Review identified that in December
2014, the Company overstated copper cathode production by
6,650 tonnes. This material was provisionally invoiced to Glencore
plc ("Glencore") for $41.9 million
after a year-end marked- to-market adjustment of $1.0 million. In addition, over-reporting of
cathode production in prior months in fiscal 2014 overstated
cathode production by a further 1,266 tonnes resulting in a
cumulative overstatement as at December 31,
2014 of 7,916 tonnes. As a consequence of the cathode
production overstatement, finished product inventories in the
Company's consolidated statement of financial position as at
December 31, 2014 were overstated by
$41.8 million and costs of sales for
the year ended December 31, 2014 were
understated by an equivalent amount. Furthermore, the Review
identified that the provisional invoicing to Glencore in
December 2014 resulted in an
overstatement of receivables of $41.9
million in the Company's consolidated statement of financial
position as at December 31, 2014.
Since no revenue was recognized with respect to this invoicing,
deferred revenue, which was reported in the amended loan facilities
– related parties line item in the Company's consolidated statement
of financial position as at December 31,
2014, was also overstated by $41.9
million.
The Review found that the cathode inventory overstatement was
written off through a series of journal entries in fiscal 2015,
thereby eliminating the overstatement and charging 2015 cost of
sales with the $41.8 million of costs
that should have been recognized in 2014. The provisional invoicing
was also reversed in 2015 via credit notes to eliminate the
overstatement of receivable and amended loan facilities reported in
the Company's consolidated statement of financial position as at
December 31, 2014.
As a result of these 2015 entries, the December 2014 and prior cathode production
overstatement and resultant finished product inventory
overstatement had no impact on the Company's December 31, 2015 and 2016 consolidated
statements of financial position or the Company's 2016 reported
results of operations or cash flows.
Overvaluation of Concentrate Inventories
Due to large volumes, recurring spillages, the continual power
interruptions and plant modifications between 2010 to 2013,
operating conditions around the Company's Kamoto Concentrator
facility ("KTC") were not optimal. This resulted in unrecorded
material containing copper being discharged at various stages of
the KTC operations in varying qualities and some material ending up
in locations other than those designated for concentrate storage.
In July, 2017, the Independent Directors were advised by management
that in April 2014 management
quantified the physical concentrate production in the concentrate
storage locations. This quantification identified an overvaluation
of sulphide and oxide concentrate inventories of $28 million and $79
million, respectively, due to the fact that concentrate
reported as produced was not physically present in concentrate
storage locations in which it had been recorded. The overstatement
of concentrate arose from:
- operating conditions experienced at KTC as described
above;
- inadequate plant housekeeping and material being transferred
and not recorded; and
- improper measurement of historical concentrate production over
a number of years due to inadequate controls, instrumentation and
an ineffective metal accounting system.
The overstatement of concentrate was not detected on a timely
basis due to:
- failure to reconcile or resolve differences between tonnes of
concentrate reported as produced by the KTC facility and tonnes
reported as received by the Luilu processing facility;
- improper adjustments to volume, density and moisture factors
used to derive tonnage reported to be contained in the concentrate
storage locations; and
- failure to adjust recorded amounts of concentrate on hand based
on periodic quantity surveys and other measurement procedures.
Following quantification of the concentrate inventory
overstatements, $28 million of the
sulphide concentrate costs was written off over the remainder of
fiscal 2014 and a portion of the oxide concentrate inventory
overstatement was expensed. However, $66.5
million of the oxide concentrate costs were not written off
but improperly transferred from inventories to property, plant and
equipment in June 2014 and
depreciated using the unit of production method.
The restated consolidated statement of financial position as at
January 1, 2015 reflects the write
off of $66.5 million of costs
improperly included in property, plant and equipment, net of
depreciation recorded thereon of $1.4
million.
Valuation of Ore in Stockpiles
In July, 2017, the Independent Directors were advised by
management that a review in April
2014 of the valuation of ore in stockpiles identified that
the recorded cost of such inventory exceeded its net realizable
value. Subsequent movement in copper and cobalt prices reduced the
initially identified shortfall to $55.7
million. This $55.7 million
was improperly transferred to property, plant and equipment in
June 2014 and depreciated using the
unit of production method.
The Company's restated consolidated statement of financial
position as at January 1, 2015
reflects a reclassification of $55.7
million from property, plant and equipment back to the ore
in stockpile inventories, net of depreciation recorded thereon of
$2.6 million and also reflects a
write down of the cost of such inventories of $26.0 million, being the excess of cost over net
realizable value on January 1, 2015
based on prevailing metal prices at that date.
The Company's restated consolidated statement of financial
position as at December 31, 2015 and
the consolidated statement of loss and comprehensive loss for the
year then ended reflect the reversal of the $26.0 million 2014 write down due to subsequent
further improvements in copper and cobalt prices in 2015 as well as
expected improved recoveries when this material is processed using
the Whole Ore Leach ("WOL") plant, such that $55.7 million of costs remain in the carrying
value of the ore in stockpile inventories as at December 31, 2015 and 2016.
Impairment of heap leach assets
The Review determined that in 2015 the revised and optimized
life of mine plan no longer included the use of the heap leach
assets with a cost of $14.7 million
and accumulated depreciation of $2.3
million. The assets were determined to be impaired and have
been written off in the Company's restated 2015 consolidated
financial statements.
Other Adjustments
As a result of the Review, two additional adjustments were
identified:
- Additional capital costs totalling $3.1
million relating to heap leach assets contained in property,
plant and equipment were determined to be impaired and have been
written off in the Company's restated consolidated statement of
loss for the year ended December 31,
2015.
- An accrual with respect to the liability for the cost of
concentrate purchased from a related party, Mutanda Mining SARL, in
the amount of $10.4 million was
incorrectly reversed in 2015 prior to finalization of the amount
owing. Accordingly, in the consolidated statement of financial
position as at December 31, 2015,
accounts payable and accrued liabilities have been increased by
$10.4 million with a corresponding
increase in cost of sales in 2015 and reduction of $10.4 million in operating costs in 2016, the
year in which the purchase invoice from Mutanda Mining SARL was
finalized.
Tax Adjustments
The restated consolidated financial statements also reflect the
tax effects of the adjustments described above.
RESTATEMENT
As noted above, as a result of the Review, the Board is
restating the following documents (collectively, the "Restated
Filings"):
a)
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audited restated
consolidated financial statements for the years ended December 31,
2016 and 2015, and the audited restated consolidated statement of
financial position as at January 1, 2015, together with the related
notes and audit report; and
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b)
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MD&A for the
years ended December 31, 2016 and 2015;
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c)
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unaudited restated
interim condensed consolidated financial statements for the three
months ended March 31, 2017 and 2016, together with the related
notes thereto;
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d)
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MD&A for the
three months ended March 31, 2017 and 2016; and
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e)
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executed
certifications of the Chief Executive Officer and Chief Financial
Officer of the Company in accordance with National Instrument
51-109 – Certification of Disclosure in Issuers' Annual and
Interim Filings ("NI 52-109") for the foregoing
filings.
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The impact of the restatement adjustments on the Company's
previously reported consolidated financial statements as at and for
the years ended December 31, 2016 and
2015, as well as the impact on the restated consolidated statement
of financial position as at January 1,
2015, and the unaudited interim financial statements for the
three months ended March 31, 2017 and
2016 are set forth in Schedule "A".
As disclosed in the Company's August 14,
2017 press release, the Company's previously filed
consolidated financial statements for the years ended December 31, 2016, 2015 and 2014 and related
MD&A and all interim consolidated financial statements and
interim MD&A since December 31,
2014 should not be relied upon.
ADDITIONAL EXECUTIVE COMPENSATION
During the course of the Review, it came to the attention of the
Independent Directors that certain members of management of the
Company had received additional compensation not previously
disclosed directly from the Company's controlling shareholder,
Glencore. The compensation was paid both in cash and in equity of
Glencore. The Review concluded that such payments should have been
disclosed in the Company's executive compensation disclosure in the
Company's management information circular for the affected years.
As a result, the amounts included in the Summary Compensation Table
in the Company's management information circular for the affected
years and related disclosures were understated and should not be
relied upon. Details of the additional compensation payments made
by Glencore to members of Katanga's management who were, in the
applicable years, "Named Executive Officers" of the Company as such
term is defined in National Instrument 51-102 – Continuous
Disclosure Requirements are set out in Schedule "B". The
Company will include such payments in its executive compensation
disclosure as required in future management information
circulars.
INTERNAL CONTROLS OVER FINANCIAL REPORTING
The Review concluded that the accounting practices that resulted
in the restatements described above demonstrated the following
material weaknesses in the Company's internal control over
financial reporting ("ICFR"):
- Control environment material weaknesses – The control
environment is the responsibility of senior management, sets the
tone of the organization, influences the control consciousness of
its employees, and is the foundation of the other components of
ICFR. The Company has concluded that it did not adequately
establish and enforce a strong culture of compliance and controls
which includes the adherence to policies, procedures and controls
necessary to present financial statements in accordance with
IFRS.
- Management override material weakness – The Company did not
maintain effective controls to prevent or detect the circumvention
or override of controls. Certain of the accounting adjustments
identified in the Review are a result of senior management and
executive directors in office at that time overriding the Company's
control processes.
- Monitoring material weaknesses – Monitoring ensures that the
entire system of internal control is monitored continuously and
problems are addressed timely. The Company has determined that
certain of the accounting adjustments identified in the Review were
not identified earlier due to inadequate monitoring controls,
including inadequate controls and procedures to properly quantify
and verify the value of in-process concentrate inventories,
inadequate controls with respect to quarter-end and year-end sales
cut-off procedures, insufficient involvement of internal audit in
the testing of the accuracy of external financial reporting and
inadequate procedures to ensure the effective implementation of
internal audit recommendations on high risk areas, particularly
with respect to metal accounting.
Each of these material weaknesses created a reasonable
possibility that a material misstatement of the Company's annual
financial statements or interim financial reports would not be
prevented or detected on a timely basis.
The advisors to the Independent Directors have recommended
various remediation measures to strengthen the Company's corporate
governance, compliance and control processes. The Board will
consider these recommendations with a view to (a) enhancing the
Company's internal control monitoring function to allow for a
higher level of independent assurance from this function, (b)
increasing organizational awareness and understanding of the
importance of internal controls to significantly decrease the risk
of errors in the Company's financial statements, and (c)
reinforcing related accounting policies through enhanced
formalization of documentation requirements and additional training
and procedures across the Company to better ensure compliance with
Company standards by emphasizing adherence to these policies on an
on-going basis.
The material weaknesses cannot be considered remediated until
the applicable remedial controls are implemented and operate for a
sufficient period of time and management has concluded, through
testing, that these controls are operating effectively. No
assurance can be provided at this time that the actions and
remediation efforts the Company has taken or will implement will
effectively remediate the material weaknesses described above or
prevent the incidence of other significant deficiencies or material
weaknesses in the Company's ICFR in the future. The Company does
not expect that disclosure controls or ICFR will prevent all
errors, even as the remediation measures are implemented and
further improved to address the material weaknesses and significant
deficiency. The design of any system of controls is based in part
upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving
our stated goals under all potential future conditions.
Notwithstanding the material weaknesses outlined above, based on
the work performed during the Review by Independent Directors,
management, external auditors, outside legal counsel and outside
accounting advisors, management and the Board of Directors have
concluded that the restated consolidated financial statements are
fairly stated in all material respects in accordance with
International Financial Reporting Standards.
CHANGES TO THE COMPOSITION OF THE BOARD AND
MANAGEMENT
The Independent Directors, having received and considered the
findings made in the Review, have concluded that a recomposition of
the Board is in the best interests of the Company. Liam Gallagher, Aristotelis Mistakidis and
Tim Henderson have all cooperated
fully with the Review and have offered to step down from the Board.
Each of these directors has tendered his resignation from the
Board, effective immediately. The Company is pleased to announce
the appointment of Mike Ciricillo,
Steve Kalmin and Tony Moser to the Board. The biographies of each
of these new directors are provided as Schedule "C" to this press
release.
In addition, the Company's Chief Financial Officer, Jacques Lubbe, who had previously indicated an
intention to resign from the Company but committed to stay in his
current position until the restatement was completed, has tendered
his resignation to the Board, effective immediately. The Board has
appointed Grant Sboros as Chief
Financial Officer of the Company, effective November 20, 2017. The biography of Grant Sboros is provided as Schedule "C" to this
press release
REGULATORY MATTERS
(a) Status Update
This status update is provided pursuant to the alternative
information guidelines in National Policy 12-203 ("NP 12-203"),
which require the Company to provide bi-weekly updates on its
affairs until such time as the Company is current with its filing
obligations under Canadian securities laws. In accordance with
those requirements, the Company advises that: except as previously
disclosed and as disclosed herein, there have not been any material
changes to the information contained in our July 31, August 14,
August 16, August 29, September
12, September 26, October 11, October 25,
2017 and November 16, 2017
news releases; except for the delay in issuing its November 8, 2017 default status report, there has
not been any failure by the Company to fulfill its publicly
disclosed intentions with respect to satisfying the provisions of
the alternative information guidelines of NP 12-203; except as
previously disclosed, there are no subsequent specified defaults
(actual or anticipated) within the meaning of NP 12-203; and there
is no other material information concerning the Company and its
affairs that has not been generally disclosed as of the date of
this update.
As previously disclosed, the OSC issued a Management Cease Trade
Order ("MCTO") on August 16, 2017
that prohibits the directors and executive officers of the Company
from trading in or purchasing securities of the Company, subject to
certain limited circumstances. The MCTO has not and does not affect
the ability of other persons to trade in the common shares of the
Company. The Company is in discussions with staff of the OSC to
have the MCTO revoked upon the completion of the Restatement and
the issuance of the Company's second and third quarter interim
filings.
(b) OSC Staff Investigation
Katanga has been advised that OSC enforcement staff are
investigating, among other things, whether Katanga's previously
filed annual and interim financial statements, MD&A and/or
annual information form contain statements that are misleading in a
material respect. OSC enforcement staff are also investigating the
adequacy of Katanga's corporate governance practices and compliance
with those practices and the related conduct of certain directors
and officers of Katanga. Katanga has also been advised that OSC
enforcement staff are reviewing Katanga's risk disclosure in
connection with applicable requirements under certain international
bribery, government payment and anti-corruption laws.
SECOND QUARTER FINANCIAL RESULTS
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Three months
ended
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Six months
ended
|
|
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Jun 30,
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Mar 31,
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Jun 30,
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Jun 30,
|
|
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2017
|
2017
|
2016
|
2017
|
2016
|
Financial
|
|
|
|
|
|
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Total
sales*
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$'000
|
11,723
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(2)
|
(615)
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11,721
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(28,498)
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- including
repricing*
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$'000
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5
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(2)
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(615)
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3
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(29,224)
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EBITDA**
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$'000
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(73,604)
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(52,466)
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(42,919)
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(126,070)
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(119,064)
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Net loss attributable
to shareholders
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$'000
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(126,555)
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(100,923)
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(96,058)
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(227,478)
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(207,168)
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Cash flows used in
operating activities
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$'000
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(26,569)
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(17,330)
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(42,007)
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(43,899)
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(120,849)
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THIRD QUARTER FINANCIAL RESULTS
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Three months
ended
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Nine months
ended
|
|
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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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2017
|
2017
|
2016
|
2017
|
2016
|
Financial
|
|
|
|
|
|
|
Total
sales*
|
$'000
|
5 875
|
11 723
|
(1 632)
|
17 596
|
(30 130)
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- including
repricing*
|
$'000
|
(169)
|
5
|
(1
632)
|
(166)
|
(30
856)
|
EBITDA**
|
$'000
|
(69 091)
|
(73 604)
|
(55 213)
|
(195 161)
|
(174 277)
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Net loss attributable
to shareholders
|
$'000
|
(115 362)
|
(126 555)
|
(99 499)
|
(342 840)
|
(306 667)
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Cash flows used in
operating activities
|
$'000
|
(56 745)
|
(26 569)
|
(33 141)
|
(100 643)
|
(153 990)
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KITD Reserve and Resource Estimate
Due to the continual power interruptions, recurring spillages
and plant modifications completed over the period of 2010 to 2013,
concentrate quality material containing valuable amounts of copper
and cobalt ("Material") was discharged along with the operational
waste to the Kamoto Interim Tailings Dam ("KITD"), a large tailings
facility located in proximity to the KTC facility. The Material was
not stored in the concentrate stockpiles due to quantities and
operational issues. For this reason, the KITD extraction plant was
approved in 2012, installed in 2013 and an initial drilling program
was undertaken in late 2014 and early 2015. In August 2017, the Company resumed an exploration
drilling program to profile the mineral contents of KITD.
This drilling activity identified anticipated mineralization in
KITD. Though, as a tailings facility, KITD does not have a
geological profile and its mineral "deposits" are technogenetic in
nature as they are the product of previous mining activities, the
Company has been aware of the potential for a significant copper
resource within KITD since waste and material was discharged into
the facility until 2013. The mineralization contained in KITD is
the end product of KTC which processed the original ore from the
mines. The Company began hydraulic mining of KITD in January 2017.
Following the completion of the exploration drilling program and
related work on profiling the KITD described above, the Company
commissioned a pre-feasibility study. The results of these efforts
were newly-defined mineral reserve and mineral resource estimates
at KITD, which estimates have been independently peer reviewed and
signed off by Golder Associates Africa Pty Ltd.
The KITD Mineral Resource and Mineral Reserve estimates are set
out below:
KITD Mineral Resources estimate as at
September 30, 2017
1-8
Classification
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Mt
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TCu
(%)
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TCo
(%)
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Measured
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0.0
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0.00
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0.00
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Indicated
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8.34
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1.48
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0.16
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Measured +
Indicated
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8.34
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1.48
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0.16
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Inferred
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0.0
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0.00
|
0.00
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1)
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Mineral Resources for
KITD have been reported in accordance with the definitions and
classification standards adopted in NI 43-101;
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2)
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Mineral Resources for
KITD are reported using cut-off grades 0.20% TCu and 0.07%
TCo;
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3)
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Grade measurements
reported as percent (%), tonnage measurements are in metric
units;
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4)
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Tonnages are reported
as million tonnes (Mt) rounded to one decimal place; grades are
rounded to two decimal place;
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5)
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Mineral Resources are
inclusive of Mineral Reserves;
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6)
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Mineral Resources are
not Mineral Reserves and do not have demonstrated economic
viability;
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7)
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Rounding as required
by reporting guidelines may result in apparent summation
differences between tonnes (t), grade and contained metal content;
and
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8)
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The Mineral Resource
estimates are for KCC's entire interest, whereas the KML owns 75%
of KCC.
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KITD Mineral Reserve estimate as at September 30, 2017 1-7
Mining
operation
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Proven
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Probable
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Total
|
Mt
|
TCu
(%)
|
TCo
(%)
|
Mt
|
TCu
(%)
|
TCo
(%)
|
Mt
|
TCu
(%)
|
TCo
(%)
|
KITD
|
0
|
0
|
0
|
7.9
|
1.48
|
0.16
|
7.9
|
1.48
|
0.16
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Total
|
0
|
0
|
0
|
7.9
|
1.48
|
0.16
|
7.9
|
1.48
|
0.16
|
1)
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The Mineral Reserve
estimates have been prepared in accordance with the classification
criteria of NI 43-101;
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2)
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Mineral Reserves are
reported using cut-off grades 0.20% TCu and 0.07% TCo;
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3)
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The Mineral Reserves
are reported as at September 30, 2017;
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4)
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Grade measurements
reported as percent (%), tonnage measurements are in metric
units;
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|
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5)
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Tonnages are reported
as Mt rounded to one decimal place; grades are rounded to two
decimal place;
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|
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6)
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Rounding as required
by reporting guidelines may result in apparent summation
differences between t, grade and contained metal content;
and
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7)
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The Mineral Reserve
estimates are for KCC's entire interest, whereas the KML owns 75%
of KCC.
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The summary noted above of the KITD Mineral Reserve and Mineral
Resource estimates was prepared under the supervision of
Tim Henderson, Technical Consultant
and Director of Katanga, and a "qualified person" as such term is
defined in NI 43-101.
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.
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 effect of the recomposition of the Board and
management on the Company's internal control environment; the
ongoing consideration by the Board of the results of the Review,
the implementation and effectiveness of the remedial measures
recommended by the advisors to the Independent Directors, the
maintenance by the Ontario Securities Commission of the management
cease trade order, any other action that may be taken by securities
regulatory authorities in light of the Review, 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 (as defined in the Company's Annual
Information Form for the year ended December
31, 2016 dated March 31,
2017); new equipment performs to 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. Such factors include,
among others: the failure of the personnel changes or recommended
remedial measures to have their intended effect; unforeseen action
taken by the Ontario Securities Commission or other securities
regulatory authorities; unforeseen delays or changes to the WOL
Project; difficulty in implementing the recommended remedial
measures proposed by the Independent Directors as a result of the
Review, 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.
SCHEDULE "A" –
EFFECT ON THE CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
|
|
|
As previously
reported
|
Adjustments
|
As
restated
|
As previously
reported
|
Adjustments
|
As
restated
|
|
December 31,
2015
|
January 1,
2015
|
|
$
|
$
|
$
|
$
|
$
|
$
|
ASSETS
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Cash and cash
equivalents
|
37,740
|
-
|
37,740
|
9,862
|
-
|
9,862
|
Receivables
|
201,900
|
-
|
201,900
|
188,025
|
(41,936)
|
146,088
|
Inventories
|
126,177
|
-
|
126,177
|
485,668
|
(41,763)
|
443,905
|
Prepayments and other
current assets
|
274,704
|
-
|
274,704
|
129,270
|
-
|
129,270
|
|
640,521
|
-
|
640,521
|
812,825
|
(83,699)
|
729,125
|
Non-current
|
|
|
|
|
|
|
Mineral
interests
|
1,834,128
|
-
|
1,834,128
|
1,738,385
|
-
|
1,738,385
|
Property, plant and
equipment
|
2,294,618
|
(133,858)
|
2,160,760
|
2,051,340
|
(118,317)
|
1,933,023
|
Non-current
inventories
|
494,340
|
55,747
|
550,087
|
57,673
|
29,747
|
87,420
|
Other non-current
assets
|
108,897
|
-
|
108,897
|
91,222
|
-
|
91,222
|
Deferred income tax
assets
|
406,181
|
18,093
|
424,274
|
294,193
|
39,100
|
333,293
|
|
5,138,164
|
(60,018)
|
5,078,146
|
4,232,813
|
(49,471)
|
4,183,343
|
Total
assets
|
5,778,685
|
(60,018)
|
5,718,667
|
5,045,638
|
(133,170)
|
4,912,468
|
LIABILITIES
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Bank
overdrafts
|
-
|
-
|
-
|
20,381
|
-
|
20,381
|
Accounts payable and
accrued liabilities
|
303,717
|
10,395
|
314,112
|
357,183
|
-
|
357,183
|
Provisions
|
14,936
|
-
|
14,936
|
27,904
|
-
|
27,904
|
Customer prepayments
– related parties
|
1,208,243
|
-
|
1,208,243
|
2,385
|
-
|
2,385
|
Current portion of
other non-current liabilities
|
1,409
|
-
|
1,409
|
16,163
|
-
|
16,163
|
|
1,528,305
|
10,395
|
1,538,700
|
424,016
|
-
|
424,016
|
Non-current
|
|
|
|
|
|
|
Amended loan
facilities - related parties
|
3,057,760
|
-
|
3,057,760
|
2,770,863
|
(41,936)
|
2,728,927
|
Other non-current
liabilities
|
-
|
-
|
-
|
15,368
|
-
|
15,368
|
Decommissioning and
environmental provisions
|
12,445
|
-
|
12,445
|
24,518
|
-
|
24,518
|
|
3,070,205
|
-
|
3,070,205
|
2,810,749
|
(41,936)
|
2,768,813
|
Total
liabilities
|
4,598,510
|
10,395
|
4,608,905
|
3,234,765
|
(41,936)
|
3,192,829
|
EQUITY
|
|
|
|
|
|
|
Share
capital
|
190,750
|
-
|
190,750
|
190,750
|
-
|
190,750
|
Reserves
|
2,540,635
|
-
|
2,540,635
|
2,541,816
|
-
|
2,541,816
|
Accumulated
deficit
|
(1,150,997)
|
(52,810)
|
(1,203,807)
|
(726,933)
|
(68,425)
|
(795,358)
|
Equity
attributable to shareholders of the Company
|
1,580,388
|
(52,810)
|
1,527,578
|
2,005,633
|
(68,425)
|
1,937,208
|
Non-controlling
interests
|
(400,213)
|
(17,603)
|
(417,816)
|
(194,760)
|
(22,808)
|
(217,569)
|
Total
equity
|
1,180,175
|
(70,413)
|
1,109,762
|
1,810,873
|
(91,233)
|
1,719,639
|
Total liabilities
and equity
|
5,778,685
|
(60,018)
|
5,718,667
|
5,045,638
|
(133,170)
|
4,912,468
|
SCHEDULE "A"
(continued) – EFFECT ON THE CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
|
|
|
|
|
|
|
|
|
As previously
reported
|
Adjustments
|
As
restated
|
As previously
reported
|
Adjustments
|
As
restated
|
|
March 31,
2017
|
December 31,
2016
|
|
$
|
$
|
$
|
$
|
$
|
$
|
ASSETS
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Cash and cash
equivalents
|
17,890
|
-
|
17,890
|
1,518
|
-
|
1,518
|
Receivables
|
235,355
|
-
|
235,355
|
236,634
|
-
|
236,634
|
Inventories
|
187,356
|
-
|
187,356
|
146,066
|
-
|
146,066
|
Prepayments and other
current assets
|
118,409
|
-
|
118,409
|
113,107
|
-
|
113,107
|
|
559,010
|
-
|
559,010
|
497,325
|
-
|
497,325
|
Non-current
|
|
|
|
|
|
|
Mineral
interests
|
1,889,573
|
-
|
1,889,573
|
1,869,706
|
-
|
1,869,706
|
Property, plant and
equipment
|
2,422,033
|
(133,858)
|
2,288,175
|
2,404,302
|
(133,858)
|
2,270,444
|
Non-current
inventories
|
328,861
|
55,747
|
384,608
|
365,271
|
55,747
|
421,018
|
Other non-current
assets
|
220,874
|
-
|
220,874
|
226,241
|
-
|
226,241
|
Deferred income tax
assets
|
402,801
|
18,093
|
420,894
|
403,212
|
18,093
|
421,305
|
|
5,264,142
|
(60,018)
|
5,204,124
|
5,268,732
|
(60,018)
|
5,208,714
|
Total
assets
|
5,823,152
|
(60,018)
|
5,763,134
|
5,766,057
|
(60,018)
|
5,706,039
|
LIABILITIES
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Bank
overdrafts
|
-
|
-
|
-
|
-
|
-
|
-
|
Accounts payable and
accrued liabilities
|
258,443
|
-
|
258,443
|
249,358
|
-
|
249,358
|
Provisions
|
8,188
|
-
|
8,188
|
7,220
|
-
|
7,220
|
Customer prepayments
– related parties
|
1,721,840
|
-
|
1,721,840
|
1,592,761
|
-
|
1,592,761
|
Current portion of
other non-current liabilities
|
-
|
-
|
-
|
-
|
-
|
-
|
|
1,988,471
|
-
|
1,988,471
|
1,849,339
|
-
|
1,849,339
|
Non-current
|
|
|
|
|
|
|
Amended loan
facilities - related parties
|
3,441,603
|
-
|
3,441,603
|
3,363,267
|
-
|
3,363,267
|
Other non-current
liabilities
|
-
|
-
|
-
|
-
|
-
|
-
|
Decommissioning and
environmental provisions
|
15,581
|
-
|
15,581
|
15,134
|
-
|
15,134
|
|
3,457,184
|
-
|
3,457,184
|
3,378,401
|
-
|
3,378,401
|
Total
liabilities
|
5,445,655
|
-
|
5,445,655
|
5,227,740
|
-
|
5,227,740
|
EQUITY
|
|
|
|
|
|
|
Share
capital
|
190,750
|
-
|
190,750
|
190,750
|
-
|
190,750
|
Reserves
|
2,540,024
|
-
|
2,540,024
|
2,540,024
|
-
|
2,540,024
|
Accumulated
deficit
|
(1,679,603)
|
(45,014)
|
(1,724,617)
|
(1,578,680)
|
(45,014)
|
(1,623,694)
|
Equity
attributable to shareholders of the Company
|
1,051,171
|
(45,014)
|
1,006,157
|
1,152,094
|
(45,014)
|
1,107,080
|
Non-controlling
interests
|
(673,674)
|
(15,004)
|
(688,678)
|
(613,777)
|
(15,004)
|
(628,781)
|
Total
equity
|
377,497
|
(60,018)
|
317,479
|
538,317
|
(60,018)
|
478,299
|
Total liabilities
and equity
|
5,823,152
|
(60,018)
|
5,763,134
|
5,766,057
|
(60,018)
|
5,706,039
|
SCHEDULE "A"
(continued) – EFFECT ON THE CONSOLIDATED STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
As previously
reported
|
Adjustments
|
As
restated
|
As previously
reported
|
Adjustments
|
As
restated
|
As previously
reported
|
Adjustments
|
As
restated
|
|
Year ended
December 31, 2016
|
Year Ended
December 31, 2015
|
Three months ended
March 31, 2016
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
Sales
|
(30,127)
|
-
|
(30,127)
|
669,701
|
-
|
669,701
|
(27,884)
|
-
|
(27,884)
|
Cost of
sales
|
-
|
-
|
-
|
(1,126,290)
|
41,827
|
(1,084,463)
|
|
|
|
Gross
loss
|
(30,127)
|
-
|
(30,127)
|
(456,589)
|
41,827
|
(414,762)
|
(27,884)
|
-
|
(27,884)
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
(246,794)
|
10,395
|
(236,399)
|
-
|
-
|
-
|
(63,694)
|
10,395
|
(53,299)
|
General and
administrative expense
|
(2,283)
|
-
|
(2,283)
|
(2,715)
|
-
|
(2,715)
|
(705)
|
-
|
(705)
|
Release of SX/EW
provision
|
-
|
-
|
-
|
17,422
|
-
|
17,422
|
|
|
|
Restructuring cost
recovery (expenses)
|
600
|
-
|
600
|
(36,304)
|
-
|
(36,304)
|
(3,065)
|
-
|
(3,065)
|
Facilities
interest
|
(305,504)
|
-
|
(305,504)
|
(240,098)
|
-
|
(240,098)
|
(74,238)
|
-
|
(74,238)
|
Customer prepayments
interest
|
(43,526)
|
-
|
(43,526)
|
(19,395)
|
-
|
(19,395)
|
(9,994)
|
-
|
(9,994)
|
Interest
income
|
7,001
|
-
|
7,001
|
7,233
|
-
|
7,233
|
2,798
|
-
|
2,798
|
Interest
expense
|
(12,935)
|
-
|
(12,935)
|
(16,227)
|
-
|
(16,227)
|
(3,408)
|
-
|
(3,408)
|
Foreign exchange
gain
|
1,338
|
-
|
1,338
|
5,888
|
-
|
5,888
|
1,106
|
-
|
1,106
|
Loss before income
taxes
|
(632,230)
|
10,395
|
(621,835)
|
(740,785)
|
41,827
|
(698,958)
|
(179,084)
|
10,395
|
(168,690)
|
|
|
|
|
|
|
|
|
|
|
Income tax (expense)
recovery
|
(9,017)
|
-
|
(9,017)
|
111,269
|
(21,007)
|
90,262
|
(70)
|
-
|
(70)
|
Net loss and
comprehensive loss
|
(641,247)
|
10,395
|
(630,852)
|
(629,516)
|
20,820
|
(608,696)
|
(179,154)
|
10,395
|
(168,759)
|
|
|
|
|
|
|
|
|
|
|
Attributable
to
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
(213,564)
|
2,599
|
(210,965)
|
(205,452)
|
5,204
|
(200,248)
|
(60,248)
|
2,599
|
(57,649)
|
|
Shareholders of the
Company
|
(427,683)
|
7,796
|
(419,887)
|
(424,064)
|
15,616
|
(408,448)
|
(118,906)
|
7,796
|
(111,110)
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per common share
|
($0.22)
|
-
|
($0.22)
|
($0.22)
|
$0.01
|
($0.21)
|
($0.06)
|
-
|
($0.06)
|
Weighted average
number of common shares outstanding
|
1,907,380,413
|
-
|
1,907,380,413
|
1,907,380,413
|
-
|
1,907,380,413
|
1,907,380,413
|
-
|
1,907,380,413
|
SCHEDULE "A"
(continued) – EFFECT ON THE CONSOLIDATED STATEMENTS OF CHANGES IN
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Reserves
|
Accumulated
deficit
|
Equity
attributable to shareholders of the Company
|
Non-controlling
interests
|
Total
|
|
Number of common
shares
|
Share
capital
|
Contri-buted
surplus
|
Share option
reserve
|
As previously
reported
|
Adjustments
|
As
restated
|
As previously
reported
|
Adjustments
|
As
restated
|
As previously
reported
|
Adjustments
|
As
restated
|
As previously
reported
|
Adjustments
|
As
restated
|
|
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
Balance at January
1, 2015
|
1,907,380,413
|
190,750
|
2,498,068
|
43,748
|
(726,933)
|
(68,426)
|
(795,359)
|
2,005,633
|
(68,426)
|
1,937,207
|
(194,761)
|
(22,807)
|
(217,568)
|
1,810,872
|
(91,233)
|
1,719,639
|
Options forfeited and
expired
|
-
|
-
|
-
|
(1,181)
|
-
|
-
|
-
|
(1,181)
|
-
|
(1,181)
|
-
|
-
|
-
|
(1,181)
|
-
|
(1,181)
|
Comprehensive
loss
|
-
|
-
|
-
|
-
|
(424,064)
|
15,616
|
(408,448)
|
(424,064)
|
15,616
|
(408,448)
|
(205,452)
|
5,204
|
(200,248)
|
(629,516)
|
20,820
|
(608,696)
|
Balance at
December 31, 2015
|
1,907,380,413
|
190,750
|
2,498,068
|
42,567
|
(1,150,997)
|
(52,810)
|
(1,203,807)
|
1,580,388
|
(52,810)
|
1,527,578
|
(400,213)
|
(17,603)
|
(417,816)
|
1,180,175
|
(70,413)
|
1,109,762
|
Options forfeited and
expired
|
-
|
-
|
-
|
(611)
|
-
|
-
|
-
|
(611)
|
-
|
(611)
|
-
|
-
|
-
|
(611)
|
-
|
(611)
|
Comprehensive
loss
|
-
|
-
|
-
|
-
|
(427,683)
|
7,796
|
(419,887)
|
(427,683)
|
7,796
|
(419,887)
|
(213,564)
|
2,599
|
(210,965)
|
(641,247)
|
10,395
|
(630,852)
|
Balance at
December 31, 2016
|
1,907,380,413
|
190,750
|
2,498,068
|
41,956
|
(1,578,680)
|
(45,014)
|
(1,623,694)
|
1,152,094
|
(45,014)
|
1,107,080
|
(613,777)
|
(15,004)
|
(628,781)
|
538,317
|
(60,018)
|
478,299
|
Comprehensive
loss
|
-
|
-
|
-
|
-
|
(100,923)
|
-
|
(100,923)
|
(100,923)
|
-
|
(100,923)
|
(59,897)
|
-
|
(59,897)
|
(160,820)
|
-
|
(160,820)
|
Balance at March
31, 2017
|
1,907,380,413
|
190,750
|
2,498,068
|
41,956)
|
(1,679,603)
|
(45,014)
|
(1,724,617)
|
1,051,171
|
(45,014)
|
1,006,157
|
(673,674)
|
(15,004)
|
(688,678)
|
377,497
|
(60,018)
|
317,479
|
SCHEDULE "A"
(continued) – EFFECT ON THE CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
|
|
|
|
|
|
As
previously
reported
|
Adjustments
|
As
restated
|
As
previously
reported
|
Adjustments
|
As
restated
|
|
Year ended
December 31, 2016
|
Year ended
December 31, 2015
|
|
$
|
$
|
$
|
$
|
$
|
$
|
Operating
activities
|
|
|
|
|
|
|
Net loss and
comprehensive loss for the year
|
(641,248)
|
10,395
|
(630,852)
|
(629,516)
|
20,820
|
(608,696)
|
Adjusted for non-cash
items:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
28,126
|
-
|
28,126
|
186,601
|
(2,260)
|
184,341
|
|
Restructuring cost
(recovery) expenses
|
(600)
|
-
|
(600)
|
36,304
|
-
|
36,304
|
|
Release of SX/EW
provision
|
-
|
-
|
-
|
(17,422)
|
-
|
(17,422)
|
|
Share-based
compensation recovery
|
(611)
|
-
|
(611)
|
(1,181)
|
-
|
(1,181)
|
|
Net finance
cost
|
5,934
|
-
|
5,934
|
8,994
|
-
|
8,994
|
|
Income tax expense
(recovery)
|
9,017
|
-
|
9,017
|
(111,269)
|
21,007
|
(90,262)
|
|
Facilities and
customer prepayments interest
|
349,030
|
-
|
349,030
|
259,493
|
-
|
259,493
|
|
Unrealized foreign
exchange loss (gain)
|
675
|
-
|
675
|
(89)
|
-
|
(89)
|
|
Decommissioning and
environmental provision accretion
|
1,599
|
-
|
1,599
|
2,093
|
-
|
2,093
|
|
Expense on issue of
capital spares to production
|
19,311
|
-
|
19,311
|
18,792
|
-
|
18,792
|
|
Profit on disposal of
property, plant and equipment
|
(550)
|
-
|
(550)
|
(468)
|
-
|
(468)
|
Interest
received
|
7,001
|
-
|
7,001
|
7,233
|
-
|
7,233
|
Interest
paid
|
(12,935)
|
-
|
(12,935)
|
(16,227)
|
-
|
(16,227)
|
Income taxes
paid
|
(3,950)
|
-
|
(3,950)
|
(7,654)
|
-
|
(7,654)
|
Changes in working
capital (excluding non-cash movements):
|
|
-
|
|
|
|
|
|
Increase in
receivables
|
(34,734)
|
-
|
(34,734)
|
(13,875)
|
(41,936)
|
(55,812)
|
|
Decrease (increase)
in current prepayments and other current and non-current
assets
|
34,934
|
-
|
34,934
|
(129,860)
|
-
|
(129,860)
|
|
Decrease (increase)
in inventories
|
115,031
|
-
|
115,031
|
(91,614)
|
(67,763)
|
(159,377)
|
|
Decrease in accounts
payable and accrued liabilities
|
(29,445)
|
(10,395)
|
(39,840)
|
(102,508)
|
10,395
|
(92,113)
|
|
Decrease (increase)
in provisions
|
(7,716)
|
-
|
(7,716)
|
4,454
|
-
|
4,454
|
|
Increase (decrease)
in operating customer prepayments
|
50
|
-
|
50
|
(2,365)
|
-
|
(2,365)
|
Cash flows used in
operating activities
|
(161,080)
|
-
|
(161,080)
|
(600,084)
|
(59,737)
|
(659,821)
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
Additions to mineral
interests and property, plant and equipment
|
(222,513)
|
-
|
(222,513)
|
(542,166)
|
17,801
|
(524,365)
|
Proceeds on disposal
of property, plant and equipment
|
9,416
|
-
|
9,416
|
511
|
-
|
511
|
Cash flows used in
investing activities
|
(213,097)
|
-
|
(213,097)
|
(541,655)
|
17,801
|
(523,854)
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
Proceeds from
customer prepayments – related parties
|
337,975
|
-
|
337,975
|
1,188,207
|
41,936
|
1,230,143
|
Proceeds from amended
loan facilities – related parties
|
-
|
-
|
-
|
1,800
|
-
|
1,800
|
Cash flows from
financing activities
|
337,975
|
-
|
337,975
|
1,190,007
|
(41,936)
|
1,231,943
|
|
|
|
|
|
|
|
(Decrease)
increase in cash and cash equivalents
|
(36,202)
|
-
|
(36,202)
|
48,268
|
-
|
48,268
|
Cash and cash
equivalents, beginning of year
|
37,740
|
-
|
37,740
|
(10,519)
|
-
|
(10,519)
|
Effect of exchange
rate changes on cash held in foreign currencies
|
(20)
|
-
|
(20)
|
(9)
|
-
|
(9)
|
Cash and cash
equivalents, end of year
|
1,518
|
-
|
1,518
|
37,740
|
-
|
37,740
|
SCHEDULE "A"
(continued) – EFFECT ON THE CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
|
|
|
As previously
reported
|
Adjustments
|
As
restated
|
|
Three months ended
March 31, 2016
|
|
$
|
$
|
$
|
Operating
activities
|
|
|
|
Net loss and
comprehensive loss for the period
|
(179,154)
|
10,395
|
(168,759)
|
Adjusted for non-cash
items:
|
|
|
|
|
Depreciation and
amortization
|
7,704
|
-
|
7,704
|
|
Restructuring cost
expenses
|
3,065
|
-
|
3,065
|
|
Share-based
compensation expense
|
38
|
-
|
38
|
|
Net finance
cost
|
610
|
-
|
610
|
|
Income tax
expense
|
70
|
-
|
70
|
|
Facilities and
customer prepayments interest
|
84,231
|
-
|
84,231
|
|
Unrealized foreign
exchange loss
|
39
|
-
|
39
|
|
Decommissioning and
environmental provision accretion
|
384
|
-
|
384
|
|
Expense on issue of
capital spares to production
|
7,806
|
-
|
7,806
|
|
Profit on disposal of
property, plant and equipment
|
(695)
|
-
|
(695)
|
Interest
received
|
2,798
|
-
|
2,798
|
Interest
paid
|
(3,408)
|
-
|
(3,408)
|
Changes in working
capital (excluding non-cash movements):
|
|
-
|
|
|
Increase in
receivables
|
(23,759)
|
-
|
(23,759)
|
|
Decrease in current
prepayments and other current and non-current assets
|
13,306
|
-
|
13,306
|
|
Decrease in
inventories
|
40,439
|
-
|
40,439
|
|
Decrease in accounts
payable and accrued liabilities
|
(28,776)
|
(10,395)
|
(39,171)
|
|
Decrease in
provisions
|
(3,590)
|
-
|
(3,590)
|
|
Increase in operating
customer prepayments
|
50
|
-
|
50
|
Cash flows used in
operating activities
|
(78,842)
|
-
|
(78,842)
|
|
|
|
|
Investing
activities
|
|
|
|
Additions to mineral
interests and property, plant and equipment
|
(54,504)
|
-
|
(54,504)
|
Proceeds on disposal
of property, plant and equipment
|
1,730
|
-
|
1,730
|
Cash flows used in
investing activities
|
(52,774)
|
-
|
(52,774)
|
|
|
|
|
Financing
activities
|
|
|
|
Proceeds from
customer prepayments – related parties
|
95,795
|
-
|
95,795
|
Cash flows from
financing activities
|
95,795
|
-
|
95,795
|
|
|
|
|
Decrease in cash
and cash equivalents
|
(35,821)
|
-
|
(35,821)
|
Cash and cash
equivalents, beginning of period
|
37,740
|
-
|
37,740
|
Effect of exchange
rate changes on cash held in foreign currencies
|
4
|
-
|
4
|
Cash and cash
equivalents, end of period
|
1,923
|
-
|
1,923
|
SCHEDULE "B"
The following sets out the total cash payments and equity awards
made by Glencore to those members of Katanga's management that were
Named Executive Officers for the identified years. All amounts
expressed in USD.
Incentive
Program
|
Beneficiaries
|
Year
|
Undisclosed
amounts
awarded during KML
employment
|
LONG TERM
INCENTIVE PLAN
VESTING OVER 5 YEARS
Annual cash bonus award payable in 5 equal
instalments over 5 years
|
Jeff Best
|
2011
|
$625 000
|
2012
|
$375 000
|
2013
|
$375 000
|
2014
|
$250 000
|
2015
|
$0
|
Jacques
Lubbe
|
2014
|
$250 000
|
Edgar
Canta
|
2013
|
$250 000
|
2014
|
$125 000
|
Johnny
Blizzard
|
2014
|
$500 000
|
Bernard
Cyr
|
2011
|
$500 000
|
2012
|
$250 000
|
2013
|
$125 000
|
2014
|
$0
|
Peter
Wentzel
|
2013
|
$250 000
|
2014
|
$125 000
|
Don
Peterson
|
2014
|
$250 000
|
2015
|
$250 000
|
2016
|
$0
|
Richmond
Fenn
|
2013
|
$50 000
|
2014
|
$125 000
|
GLENCORE
PSP Annual Share Award ("PSP") is awarded in
year N as bonus for year N-1 and vesting
over 3 years in N+1, N+2, N+3
|
Johnny
Blizzard
|
2016
|
$150 000
|
2017
|
$150 000
|
Matt
Colwill
|
2016
|
$100 000
|
Selwyn
Green
|
2016
|
$100 000
|
2017
|
$90 000
|
Alan
Keeley
|
2016
|
$75 000
|
2017
|
$90 000
|
OTHER CASH
AWARDS
IMMEDIATELY PAYABLE
|
Edgar
Canta
|
2015
|
$35 376
|
SCHEDULE "C"
Mike Ciricillo
Mr. Ciricillo began his career at INCO Ltd in Ontario Canada, later joining Phelps Dodge
Mining Company, which was subsequently acquired by
Freeport-McMoRan, where he served in various operations positions
of increasing responsibility in the U.S., Chile, The
Netherlands and Democratic
Republic of Congo. He served as director of project
development (Africa), general
manager of Miami Operations (Arizona), and president of Freeport McMoRan
Africa before joining Glencore in 2014 as head of copper operations
in Peru. He is currently
responsible for Glencore's copper smelting and refining operations.
Mr. Ciricillo holds a bachelor of engineering degree from
McGill University (Quebec) and an MBA from Western New Mexico University.
Mr. Ciricillo is a Non-Executive Director of PolyMet Mining and
serves on the Technical Steering, and Health, Safety, Environment
and Communities committees.
Steve Kalmin
Steven Kalmin has been Glencore's
Chief Financial Officer since June
2005. Steven Kalmin joined
Glencore in September 1999 as general
manager of finance and treasury functions at Glencore's coal
industrial unit (which became part of Xstrata). Mr Kalmin moved to
Glencore's Baar head office in October
2003 to oversee Glencore's accounting and reporting
functions, becoming Chief Financial Officer in June 2005. Mr Kalmin holds a Bachelor of Business
(with distinction) from the University of Technology, Sydney and is a member of the Chartered
Accountants Australia and New
Zealand and the Financial Services Institute of Australasia.
Before joining Glencore, Mr Kalmin worked for nine years at Horwath
Chartered Accountants in Sydney,
leaving the firm as a director.
Mr Kalmin served as an a Executive Director of Glencore Plc from
March 14, 2011 to May 2, 2013 and a Non-Executive Director of
Century Aluminum Co. from 2011 to September
08, 2014
Tony Moser
Mr Moser joined the Glencore Finance department in Baar in 2013.
He previously worked for Xstrata Coal in Business Development in
Sydney for 2 years, and prior to
that for Goldman Sachs in Investment Banking in Sydney for 3 years. Mr Moser holds a Bachelor
of Commerce (Hons) and Bachelor of Laws from the University of
Western Australia.
Grant Sboros
Mr. Sboros has been Deputy Chief Financial officer of Mopani
Copper Mines PLC since 2013. From 2007 until 2013, Mr. Sboros was
head of auditing as a Deloitte partner in Mozambique. Mr. Sboros is a Chartered
Accountant and holds an Honors degree in Accounting Science from
the University of South Africa
SOURCE Katanga Mining Limited