ZUG, SWITZERLAND, March 30, 2020 /CNW/ - Katanga Mining Limited (TSX: KAT) (the "Company") is postponing the filing of its annual information form under Ontario Instrument 51-502 – Temporary Exemption from Certain Corporate Finance Requirements, effective as of March 23, 2020. The Company anticipates that it will file its annual information form by April 30, 2020.
On March 11, 2020, the World Health Organization officially declared the outbreak of COVID-19 to be a pandemic. The Company is closely monitoring the progress of the disease and is taking measures to contain the impact of COVID-19 on the health of its employees and its operations.
The Company confirms that management and other insiders are subject to an insider trading black-out policy as per its Confidentiality and Insider Trading Policy, which reflects the principles set out in section 9 of National Policy 11-207, and confirms that, except as described below, there have been no material business developments since the date of its annual financial statements (the "2019 AFS") and related management discussion and analysis (the "2019 MDA"), as at and for the years ended December 31, 2019 and 2018, filed on February 13, 2020. The 2019 AFS and 2019 MDA may be accessed on the Company's SEDAR profile via www.sedar.com.
Update on acquisition of land rights from Gécamines—General Prosecutor of DRC court orders that payments by KCC to Gécamines under land rights agreement be suspended pending completion of judicial investigation of Gecamines' executives
As previously announced, the Company's 75% owned subsidiary Kamoto Copper Company SA ("KCC"), entered into an agreement with KCC's 25% shareholder, DRC state-owned La Générale des Carrières et des Mines ("Gécamines"), on December 19, 2019 to acquire from Gécamines a comprehensive land package covering areas adjacent to KCC's existing mining concessions for US$250 million, none of which had been paid as at February 13, 2020. The land includes multiple blocks for construction of a new long-term tailings facility and the possible exploitation of additional resources that would enhance KCC's ability to more efficiently operate its mines, facilities and fulfil other key infrastructure requirements.
The agreement provides for an initial payment of US$150 million from KCC to Gécamines which had been postponed, and, as a result, the agreement was treated as an executory contract and the commitments of US$250 million were disclosed as capital commitments in the 2019 AFS. Engagement with Gécamines and the DRC authorities regarding the initial payment has been ongoing.
KCC today received an injunction order from the General Prosecutor of the Court of Appeal of Kinshasa that orders KCC not to make any payment to Gécamines, pending the conclusion of an investigation by the General Prosecutor relating to Gécamines' executives. After reviewing all of its options, KCC has provided notice to Gécamines that the order constitutes a force majeure under the agreement and that its obligations under the agreement are suspended. KCC remains committed to fulfilling its obligations under the agreement as soon as KCC is legally permitted to do so and continues to evaluate the impact on its business of these developments.
Expected delay of the Acid Plant due to COVID-19
The Company has continued to progress toward the commissioning of its previously disclosed sulphuric acid, sulphur dioxide production and steam turbine generator project at KCC (the "Acid Plant"). The Acid Plant commissioning is now delayed as a result of the inability to mobilize necessary commissioning experts to site due to COVID-19. The Acid Plant is expected to be commissioned in the second half of 2020, rather than in the first half 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. The Company 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. Forward-looking statements in this press release include statements regarding the anticipated time that the Company expects to file its annual information form; KCC's intention to fulfill its obligations under the land rights agreement with Gécamines as soon as KCC is legally permitted to do so; and the expected timing for commissioning of the Acid Plant. 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.
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. These risks include, but are not limited to: economic factors such as future prices of copper and cobalt, currency fluctuations, energy prices and other general costs; COVID-19 and potential pandemic disease(s) impacting the workforce in the DRC leading to reduced or no production and delays in capital projects; claims or damages arising from the sales of copper and cobalt; the timeline to the completion of the Acid Plant and availability of reagents and acid supply; risks related to the land rights agreement with Gécamines, including risks relating to the declaration of a force majeure event resulting from the investigation by the General Prosecutor relating to Gécamines' executives; the impact on the Company's operations in the event the land rights agreement cannot be performed; and the other risks discussed in the Company's most recent annual information form on file with the Canadian provincial securities regulatory authorities and available at www.sedar.com. Although the Company 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