ZUG, SWITZERLAND, Dec. 20, 2019 /CNW/ - Katanga Mining Limited
(TSX: KAT) ("Katanga" or the "Company") today announces that its
75% subsidiary Kamoto Copper Company ("KCC") has entered into an
agreement with La Générale des Carrières et des Mines
("Gécamines"), its 25% joint venture partner in KCC, to acquire
from Gécamines a comprehensive land package covering areas adjacent
to KCC's existing mining concessions.
The land includes multiple blocks over the preferred location
for construction of a new long-term tailings facility, and multiple
other blocks that will enhance KCC's ability to more efficiently
operate its mines, facilities and other key infrastructure
requirements. If this agreement is implemented then the risks for
KCC's operations resulting from land constraints, which are
described in the Company's 43-101 Technical Report issued on
November 7, 2019, would be
mitigated.
KCC will pay up to USD 250 million
to acquire the land, the total amount payable being dependent on
delivery of title to the various different land areas.
The agreement also provides for (among other matters):
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(i)
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an initial payment of
USD 150 million to Gécamines which will be fully offset against the
purchase price consideration or other payment obligations of the
Company to Gécamines from time to time,
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(ii)
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obligations on KCC to
remove tailings (estimated at circa 15m dmt), currently in a
sub-section of these areas, to another suitable proximate
location,
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(iii)
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warranties and
indemnities from Gécamines concerning the land interests to be
transferred,
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(iv)
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contingent
obligations to pay "pas de porte" payments to Gécamines if KCC
declares a JORC compliant reserve or otherwise elects to mine any
resources in certain of the acquired land areas, on substantially
the same terms as in the Settlement Agreement announced by KCC in
June 2018. An amount of up to USD 120 million of the consideration
may be offset against these pas de porte obligations,
and
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(v)
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a new royalty to
Gécamines of 2.5% of net sales from the acquired land areas if KCC
elects to mine any resources in the acquired land areas.
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KCC expects to satisfy the consideration payments from existing
liquidity. The agreement anticipates the title transfers to be
effected during the course of 2020.
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: the
transactions contemplated by the agreement will be implemented on
the terms set forth therein and in the time contemplated by
management and that all government authorizations, title documents
and related materials will be delivered in the manner set forth in
the agreement; 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