Katanga Mining announces 2013 first quarter results and election of directors

ZUG, SWITZERLAND, May 10, 2013 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announces its financial results for the first quarter of 2013. Katanga's Financial Statements and Management's Discussion and Analysis will be filed on SEDAR, www.sedar.com.

Highlights during the three months ended March 31, 2013, and Outlook

Mining

  • During the three months ended March 31, 2013 ("Q1 2013"), the Company mined 1,113,653 tonnes of ore (a 10% decrease over the three months ended March 31, 2012 ("Q1 2012")) at a grade of 4.74% resulting in contained copper in ore mined of 52,825 tonnes (a 21% increase over Q1 2012)).
  • Ore mined at KOV Open Pit during Q1 2013 was 709,885 tonnes, a 13% decrease over Q1 2012 due to lower contractor equipment availability, power interruptions and heavy rains.  The average copper grade of ore mined from KOV Open Pit during Q1 2013 was 5.55%, resulting in contained copper in ore mined of 39,434 tonnes (a 36% increase over Q1 2012).
  • Ore mined and hoisted at KTO Underground Mine during Q1 2013 was 403,768 tonnes, a 3% decrease over Q1 2012.  The average copper grade of ore mined from KTO Underground Mine during Q1 2013 was 3.32%, resulting in contained copper in ore mined of 13,391 tonnes (a 10% decrease over Q1 2012).
  • Two large diesel Caterpillar shovels (30 tonnes and 60 tonnes bucket capacity) and two 2MW generators dedicated to support the electric RH340 shovel and KOV Open Pit dewatering activities were commissioned during Q1 2013, reducing the dependence on power supply for KOV Open Pit mining activities.
  • Four additional Caterpillar 777 trucks (100 tonnes load capacity) were brought into production that have improved operating costs as these trucks haul direct to the crusher, reducing handling and contractor costs.

Processing

  • Ore milled at the Kamoto Concentrator ("KTC") during Q1 2013 was 1,252,824 tonnes, a 25% increase over Q1 2012.
  • Notwithstanding the residual power availability issues, copper produced in metal and concentrate for Q1 2013 totalled a production record of 28,600 tonnes, a 53% increase over Q1 2012.  A noticeable improvement in power availability was observed in Q1 2013 compared to Q4 2012 due to the commissioning in mid-December 2012 of the Power Project synchronous condenser and the World Bank converter.
  • A record 146,861 tonnes of concentrate containing 33,808 tonnes of copper were produced (Q1 2012 - 105,504 tonnes containing 27,154 tonnes of copper).
  • In Q1 2013, a further 288 Electro-Winning ("EW") cells with an annual capacity of 80,000 tonnes of copper cathode were commissioned as part of the Updated Phase 4 Expansion Project  (as described below), bringing the total installed annual capacity to 120,000 tonnes of copper cathode.
  • Copper metal produced through the commissioned section of the new plant, as part of the Updated Phase 4 Expansion Project, reached 9,120 tonnes during Q1 2013 as compared to 603 tonnes in Q4 2012.
  • Cobalt produced totalled 332 tonnes for Q1 2013, a 44% decrease over Q1 2012.

Capital Projects

  • The Updated Phase 4 Expansion Project is expected to be completed on time during Q3 2013 for a cost of $769 million. The initial budget was $635 million. The additional costs comprise of:
    • Scope changes - Mupine tailings dam, KOV in-pit crusher, acid receiving and storage facility and catering camp, for a combined $57 million; and
    • Cost increments - import duties, contractual tax obligations and other inflation factors for a combined $77 million.

Financial

  • Total sales for Q1 2013 were $188.1 million, a 40% increase over Q1 2012.
  • The realised copper price for Q1 2013 was $3.34/lb, an 11% decrease over Q1 2012, while the realised price of cobalt was $9.75/lb, a 15% decrease over Q1 2012
  • For Q1 2013, the Company earned a net income attributable to shareholders of $30.1 million, a 70% increase over Q1 2012.
  • Cash and cash equivalents as at March 31, 2013, amounted to $45.1 million (December 31, 2012 - $57.0 million).

Recent developments

  • As part of the Updated Phase 4 Expansion Project, two KTC mills (CM6 and CM7) were planned to be converted from Autogenous to Semi-Autogenous Grinding ("SAG") Mills. Subsequent studies indicated that upon completion of the conversion, the increased weight of the mills could lead to the possible failure of the mill structures.
  • To increase KTC milling capacity to a production level of 310,000 tonnes per annum ("tpa") of copper cathodes, Katanga will acquire a new 9,000 tonnes per day SAG mill which is expected to be commissioned by the end of Q4 2014 at a cost of $58 million.
  • Upon completion of the Updated Phase 4 Expansion Project, EW2 capacity is expected to be 200,000 tpa of copper cathode. In line with the Companies goals to introduce new technology to the operations, the Company has decided to erect two additional 35,000 tpa copper cathode EW tankhouses for $139 million. The company has the option to build a third module at a later stage.

Outlook

  • In the three months ending June 30, 2013 ("Q2 2013"), the Company's third RH340 electric shovel (60 tonnes bucket capacity) is expected to be commissioned, along with five new Caterpillar 793 trucks (240 tonnes load capacity).
  • The first phase of the feasibility study for the potential T17 underground mine is still expected to be completed during Q2 2013. This may potentially allow for the exploitation of additional T17 mineral resources below the bottom of the current open pit using underground mining techniques.
  • Updated Phase 4 Expansion Project commissioning highlights for Q2 2013 are expected to include amongst others:
    • Commissioning of the second train of SX plant increasing SX plant capacity to 200,000 tpa of copper cathode;
    • Completion and commissioning of the converted EW facility with all cells brought into operation increasing the new tankhouse capacity to 200,000 tpa of copper cathode; and
    • Commissioning of the new sulphide concentrate receiving section.
  • The remainder of the Updated Phase 4 Expansion Project (which is set out in the technical report entitled "An Independent Technical Report on the Material Assets of Katanga Mining Limited, Katanga Province, Democratic Republic of Congo" dated March 30, 2012 and filed on SEDAR at www.sedar.com under Katanga's profile) remains on track for completion in the quarter ending September 30, 2013, including among other things, the new floatation circuit at KTC, the oxide receiving, leaching and CCD facilities, the third train of SX plant, the new roaster and the new lime loading and storage plant.

Election of Directors

Katanga is pleased to announce that the nominees listed in the management proxy circular for the 2013 Annual Meeting of Shareholders were elected as directors of Katanga. Detailed results of the vote for the election of directors held at the Annual Meeting of Shareholders on May 9, 2013 in Toronto are set out below.

Nominee   Votes For % For Votes Withheld % Withheld
Hugh Stoyell   1,415,483,965 100% 14,950 0%
Jeffrey L. Best   1,405,173,594 99.3% 10,325,321 0.7%
Liam Gallagher   1,347,684,672 95.2% 67,814,243 4.79%
Aristotelis Mistakidis   1,399,460,549 98.9% 16,038,366 1.1%
Terry Robinson   1,413,891,330 99.9% 1,607,585 0.1%
Robert Wardell   1,413,891,330 99.9% 1,607,585 0.1%

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 mineral reserve and mineral resource estimates. Forward-looking statements include, but are not limited to, the anticipated decrease in power disruption relating to the upgrade in power infrastructure, the mechanical completion of the Updated Phase 4 Expansion, the anticipated commission highlights for Q2 2013 relating to the Updated Phase 4 Expansion Project, the completion of the upgrade in power infrastructure, the commencement of mining at the extension to the T17 Open Pit and the completion of the feasibility study for the 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, the implementation of the ban on concentrate exports from the DRC, 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.

Qualified Person
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




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