ZUG, SWITZERLAND, May 11, 2012 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announces its financial results for the first quarter of 2012. Katanga's Financial Statements and Management's Discussion and Analysis will be filed on SEDAR, www.sedar.com.
Highlights during and subsequent to the three months ended March 31, 2012
- On March 30, 2012 the Company announced the filing of its updated independent 43-101 compliant technical report ("2012 ITR") which detailed the planned 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. The expansion to 270,000 tonnes per annum copper production will be funded by the Company's cash flows and a loan facility of up to $515.5 million executed with Glencore International plc.
- On March 29, 2012, the Company announced that it has secured development of power supply for its copper and cobalt mine complex in the DRC sufficient to take production to 310,000 metric tonnes per annum by 2015 as the Updated Phase 4 expansion is implemented ("Power Project").
- During the three months ended March 31, 2012 ("Q1 2012"), the Company mined 1,231,073 tonnes of ore (17% higher than the three months ended March 31, 2011 ("Q1 2011")) at a grade of 3.56% resulting in contained copper in ore mined of 43,797 tonnes.
- Ore mined and hoisted at KTO Underground Mine for Q1 2012 was 416,445 tonnes, a 9% increase over Q1 2011. The average copper grade for Q1 2012 was 3.57%.
- 814,628 tonnes of ore were mined at KOV Open Pit during Q1 2012, 49% above Q1 2011. The copper grade of ore mined from KOV Open Pit for Q1 2012 averaged 3.55%.
- The dewatering of the Kamoto East Pit is approximately 95% complete with 6.3 million cubic metres of water having been removed. The Kamoto East Pit dewatering allows for more efficient and cost effective waste management and the potential development of the Kamoto East resource using underground mining methods.
- Ore milled at the Kamoto Concentrator ("KTC") for Q1 2012 was 1,004,277 tonnes, an increase of 13% from Q1 2011.
- Concentrate production was adversely affected due to a trunnion failure on the CM3 mill that occurred in late January 2012, which resulted in the CM3 mill not being available for the remainder of the quarter. A replacement trunnion is on site in the DRC and it is expected that CM3 will be operational by mid May 2012.
- Copper produced in metal and concentrate for Q1 2012 totalled 18,749 tonnes, with copper metal produced increasing by 24% compared to Q1 2011.
- Cobalt produced totalled 593 tonnes for Q1 2012.
- Copper and cobalt production were adversely affected due to general power disruptions in the DRC. Improvements in infrastructure as a result of the Power Project are expected to improve the reliability and stability of electricity supplies generally.
- Total sales for Q1 2012, were $134.7 million.
- In addition, the sales value of oxide concentrate available to be shipped but not invoiced as at March 31, 2012, amounted to approximately $77.5 million.
- For Q1 2012, the Company generated net income attributable to shareholders of $17.6 million.
- Cash and cash equivalents as at March 31, 2012, amounted to $41.6 million.
- 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 commence mining an extension to the T17 Open Pit in 2013. Studies to delineate 1.6 million tonnes of probable ore reserves (3.52% TCu / 0.56% TCo) at T17 Open Pit Extension (which estimate is set out in the 2012 ITR) were completed during the first quarter of 2012.
- The feasibility study for the potential T17 underground mine is expected to be completed during the third 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.
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.
This press release may contain forward-looking statements, including, but not limited to, the value of oxide concentrate available to be shipped but not invoiced, the increase in copper and cobalt production levels, the first copper cathode production through the new SX plants, the mechanical completion of the Updated Phase 4 Expansion, 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, 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.
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