ZUG, SWITZERLAND, Feb. 14, 2012 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announces its financial results for the 2011 fiscal year end.
Katanga's Financial Statements and Management's Discussion and Analysis
will be filed under its profile on SEDAR at, www.sedar.com.
Highlights during the year ended December 31, 2011
Updated Phase 4 Approval
During Q4 2011, Katanga announced that its Updated Phase 4 Expansion (as
defined below) had been approved. Consistent with Katanga's completion
of the Phase 3 expansion of its copper cobalt project described in
Katanga's Independent Technical Report (ITR) of March 31, 2011, Katanga
commissioned a front end engineering and early works report (the "Early
Works Report"). The Early Works Report identified the following
(collectively, the "Updated Phase 4 Expansion"):
an additional 100,000 tonnes per annum solvent extraction ("SX") plant,
over and above the 200,000 tonnes per annum SX plant described in the
ITR, to be constructed in front of the existing Luilu electrowinning
plant. The ITR detailed the conversion of the existing copper electro
refinery at the Luilu refinery to a 200,000 tonnes per annum capacity
copper electro-winning facility fed by the 200,000 tonnes per annum SX
Katanga reaching higher copper and cobalt production levels sooner than
the timelines described in the ITR;
an increase in expansionary capital expenditures from approximately $537
million as described in the ITR to approximately $635 million due
primarily to the inclusion of the additional SX plant and an in-pit
crusher at KOV Open Pit; and
the increase of copper production to 270,000 tonnes per annum of LME
Grade A copper and thereafter the expansion of copper production to
310,000 tonnes per annum which the Company intends to proceed with
utilizing anticipated cash flows from operating activities.
In order to expedite the commencement of the Updated Phase 4 Expansion,
Katanga executed a loan facility for up to $515.5 million as a
commitment from Glencore International plc. The facility will fund the
Updated Phase 4 Expansion of Katanga's copper cobalt project not
covered by the Company's cash flows.
During 2011, the Company mined 4,532,954 tonnes of ore at a grade of
4.38%, resulting in contained copper in ore mined of 198,553 tonnes,
51% higher than 2010.
Ore mined and hoisted at KTO Underground Mine for 2011 was 1,606,197
tonnes, a 23% increase on 2010. The average copper grade for 2011 was
2,522,439 tonnes of ore was mined at KOV Open Pit during 2011, 249%
above 2010. This is consistent with the 2012 production rate and the
ramp up schedule as described in the ITR. The copper grade of ore
mined from KOV Open Pit for 2011 averaged 4.98%.
KOV Open Pit was dewatered during the second quarter of 2011 with 52.7
million cubic litres of water having been removed from the pit.
During 2011, the Company continued to dewater Kamoto East pit and the
water level to date has dropped by 17.5 meters with 6.0 million cubic
litres of water having been removed. Dewatering the Kamoto East pit
allows for more efficient and cost effective management of waste
disposal from the KOV Open Pit as well as the potential development of
the Kamoto East resource using underground mining methods.
Ore milled at the KTC concentrator facility for 2011 was 4,096,480
tonnes, an increase of 40% from 2010.
As at March 31, 2011, the CM7 mill in KTC and its associated feed
systems and flotation cells were refurbished and commissioned. This has
increased the total milling capacity at KTC from 5.52 million to 7.68
million tonnes of ore per annum, which, as described in the ITR, is
sufficient milling capacity to support the Life of Mine Plan through to
A 120,000 tonnes per annum concentrate filtration and bagging facility
was commissioned during Q3 2011 and the Company continues to increase
the production of oxide concentrate for sale as a finished product.
Copper produced in metal and concentrate for 2011 totalled 91,149
tonnes, an increase of 57% compared to 2010. As at December 31, 2011,
Katanga was at an annualized production rate of 108 kilo-tonnes per
Cobalt produced totalled 2,433 tonnes for the year.
Total sales for 2011, were $574.4 million an increase of 7% compared to
2010. The sales figure has been adversely affected by an unrealized
mark to market adjustments as at December 31, 2011, of $7.0 million.
In addition, the sales value of oxide concentrate available to be
shipped, but not invoiced as at December 31, 2011, amounted to
approximately $75.2 million.
For 2011, the Company generated net income of $109.3 million.
Cash generated from operating activities amounted to $280.9 million, an
increase of 53% compared to 2010.
Cash and cash equivalents as at December 31, 2011, amounted to $57.1
On December 30, 2011, the Company redeemed the outstanding Canadian $125
million 14% debentures in full. The Company executed a loan facility
of $120 million with a Glencore International plc group company to fund
On April 7, 2011, the Company announced the promotion of Nico Paraskevas
to the position of Chief Financial Officer.
On September 22, 2011, the Company announced the appointment of Jeff
Best as Chief Executive Officer.
On October 11, 2011, the Company announced the promotion of Itamar
Machado to the position of Chief Operating Officer.
The Company expects the first copper cathode production through the new
SX plants and converted copper electro-winning facility during the
third quarter of 2012. Mechanical completion of the Updated Phase 4
Expansion is expected in the third quarter of 2013.
The Company expects to dewater the Kamoto East pit during the first
quarter of 2012. The feasibility study for the potential T17
underground mine is expected to be completed during the first quarter
of 2012. This will potentially allow for the exploitation of additional
T17 resources below the bottom of the current open pit through
underground mining techniques.
Jeff Best, Chief Executive Officer, commented:
"We are pleased to announce the commencement of the Updated Phase 4
Expansion which we expect to improve copper recovery, utilize existing
under-utilized plant capacity, and allow the Company to produce LME
Grade A copper. We expect the Company to become a significant African
copper and cobalt producer when the Updated Phase 4 Expansion is
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, including
predictions, projections and forecasts. Forward-looking statements
include, but are not limited to, the statements set out under the
heading "Outlook" and statements with respect to the commencement,
expected completion and results of the Phase IV Expansion and the
completion of the feasibility study of a potential T17 underground
mine. 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.
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 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, 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
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
This press release and the information forming the basis hereof was
prepared under the supervision of Tim Henderson, Technical Consultant,
Katanga and a 'Qualified Person' as such term is defined in National
Instrument 43-101. Mr. Henderson has reviewed and approved the contents
of this press release.
SOURCE Katanga Mining Limited
For further information:
Tel: +41 (041) 766 71 10
Tel:+41 (041) 766 71 10