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Katanga Mining Ltd
Symbol KAT
Shares Issued 1,907,380,413
Close 2017-12-08 C$ 1.13
Market Cap C$ 2,155,339,867
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Katanga completes first train core commissioning in DRC

2017-12-11 10:20 ET - News Release

Mr. Johnny Blizzard reports

KATANGA MINING ANNOUNCES COMMISSIONING OF THE CORE OF THE FIRST TRAIN OF WHOLE ORE LEACH PLANT AND PROVIDES AN OPERATIONAL UPDATE

Katanga Mining Ltd. has successfully completed the hot commissioning of the core of the first train of its new whole-ore-leach (WOL) processing facility at its subsidiary Kamoto Copper Company's (KCC) copper and cobalt mine in Lualaba province in the Democratic Republic of the Congo. The Luilu site, where the WOL and electrowinning plants of KCC are located, successfully produced its first copper cathode on Dec. 11, 2017.

Copper and cobalt production at KCC has been suspended since September, 2015, pending the construction of the WOL project. A progressive ramp-up and commissioning of the remainder of the first train are expected to follow over the ensuing three months, with the objective of achieving full capacity on the first train by the end of Q1 2018.

Johnny Blizzard, chief executive officer of Katanga, commented: "We are very pleased to have met our anticipated budget and timetable for commissioning the first train of our new plant and are optimistic that the tangible improvements from using a whole-ore-leach processing circuit will be seen in the near future. We look forward to ramping up to full production capacity of the first train. The construction of the second train of the WOL plant is also on schedule and budget, and hot commissioning is still expected to commence in [the second half of] 2018."

Separately, the company announces that its board of directors has approved capital expenditure budgets for the engineering and construction of an upgraded cobalt processing plant (the cobalt debottlenecking project) and a sulphuric acid production plant at KCC, as described as follows.

The board approved $15.8-million (U.S.) in capital expenditures to engineer and construct a facility designed to reduce throughput bottlenecks in its existing cobalt processing circuit at KCC to align with the life-of-mine cobalt production plan of 30,000-tonne-per-year average annual cobalt production. The board also approved $49-million (U.S.) for cobalt product dryers as part of the cobalt production circuit. The hot commissioning of the projects are expected to commence in Q4 2018.

Subject to the successful completion of the second train of the WOL plant and of the cobalt debottlenecking project, both of which hot commissioning is expected to commence in the second half of 2018, the company anticipates the following production forecast for the next three financial years, at the end of which period it expects to have a first-quartile cost position within the global copper industry cost curve, as shown in the attached table.

Commodity    Unit          Production guidance 
                      FY 2018   FY 2019   FY 2020

Copper     000s t         150       300       300    
Cobalt     000s t          11        34        32     

The board also approved $237-million (U.S.) in capital expenditure spread over 2018 and 2019 to construct a sulphuric acid and sulphur dioxide production plant at KCC. This will improve the reliability of the supply of these reagents to the WOL processing circuit. The acid plant is designed to produce 1,900 tonnes per day of sulphuric acid, 200 tonnes per day of suphur dioxide and 17 megawatts of cogenerated power. This will reduce KCC's reliance on imported volumes of reagents brought to the mine through various international borders. The internal rate of return (IRR) for the sulphuric acid and sulphur dioxide production plant project is expected to be approximately 60 per cent. The hot commissioning of this plant is expected to commence in the second half of 2019.

About Katanga Mining Ltd.

Katanga Mining operates a major mine complex in the Democratic Republic of the 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.

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