Katanga Mining Temporarily Suspends Cobalt Sales
ZUG, Switzerland, Nov. 6, 2018 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announced that its 75%-owned operating subsidiary, Kamoto Copper Company SA ("KCC"), will temporarily suspend the export and sale of cobalt at its Kamoto Project in the Democratic Republic of the Congo until further notice. The presence of uranium was recently detected in the cobalt hydroxide produced at the Kamoto Project in levels that exceed the acceptable limit allowed for export of the product through main African ports to customers. To date, the total cobalt production impacted by the sale suspension amounts to 1472 tons of finished cobalt. The low levels of radioactivity detected in the uranium to date do not present a health and safety risk.
Production of cobalt at the Kamoto Project is expected to continue without reduction in the quantity produced. The Company is currently conducting additional surveys to identify the source of the uranium and exploring various options to mitigate the impact of the sales suspension.
KCC intends to construct an Ion Exchange system to remove uranium from cobalt produced at the project. The Ion Exchange system is expected to be commissioned by the end of the second quarter 2019 subject to obtaining the necessary approvals. The finished cobalt production will be stored on site and processed in the Ion Exchange system once construction is completed. Once the Ion Exchange system is commissioned, the processing and sale of the cobalt stored on site is expected to be completed before the end of the fourth quarter of 2019. The construction of the Ion Exchange system is expected to cost approximately US$25 million.
The temporary suspension of cobalt sales during the construction of the Ion Exchange system is expected to negatively impact revenue of Katanga during the fourth quarter of 2018 and the first and second quarters of 2019. The revenue that would otherwise be recognized on cobalt sales during the fourth quarter of 2018 and the first and second quarters of 2019 is expected to be realized in the third and fourth quarters of 2019.
Currently the Company has not received any claims on the sales which commenced in the second quarter 2018.
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 Ion Exchange system will be completed in the time contemplated, at the expected cost of construction and will serve the purposes for which it is intended; the health and safety implications of the uranium are consistent with management's expectations; 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; 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; 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. 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.