Nov. 14, 2012
Katanga Mining Limited
" or the "
") today announces its financial results for the third quarter of 2012. Katanga's Financial Statements and Management's Discussion and Analysis will be filed on SEDAR,
Highlights during the three and nine months ended September 30, 2012, and Outlook
- During the three months ended September 30, 2012 ("Q3 2012"), the Company mined 1,596,822 tonnes of ore (29% higher than the three months ended September 30, 2011 ("Q3 2011")) at a grade of 4.29% resulting in contained copper in ore mined of 68,563 tonnes, approximately 274,000 tonnes on an annualized basis. During the nine months ended September 30, 2012 ("Q3 YTD 2012"), the Company mined 4,128,283 tonnes of ore, 15% higher than the nine months ended September 30, 2011 ("Q3 YTD 2011"), at a grade of 4.04% resulting in contained copper in ore mined of 166,708 tonnes.
- Ore mined and hoisted at KTO Underground Mine during Q3 2012 was a record 505,008 tonnes, a 27% increase over Q3 2011. The average copper grade for Q3 2012 was 3.64%. During Q3 YTD 2012, ore mined and hoisted was 1,377,893 tonnes, a 15% increase over Q3 YTD 2011. The average copper grade for Q3 YTD 2012 was 3.65%.
- Ore mined at KOV Open Pit during Q3 2012 was a record 1,091,814 tonnes, 30% above Q3 2011. The copper grade of ore mined from KOV Open Pit for Q3 2012 averaged 4.59%. During Q3 YTD 2012, the Company mined 2,750,390 tonnes of ore, 38% above Q3 YTD 2011. The copper grade of ore mined averaged 4.24%.
- Higher grade ore has become available during Q3 2012 in Cut 1D as mud has been removed from the bottom of KOV Open Pit.
- Ore milled at the Kamoto Concentrator ("KTC") during Q3 2012 was a production record of 1,274,850 tonnes, an increase of 24% from Q3 2011. During Q3 YTD 2012, 3,511,566 tonnes were milled, an increase of 17%.
- Notwithstanding the power availability issues detailed below, copper produced in metal and concentrate for Q3 2012 totalled a production record of 25,868 tonnes, and an increase of 9% compared to Q3 2011. For Q3 YTD 2012, 68,929 tonnes were produced, with copper metal produced increasing by 14%.
- Cobalt produced totalled 521 tonnes for Q3 2012. During Q3 YTD 2012, 1,591 tonnes were produced.
- Copper and cobalt production continued to be adversely affected by recurrent general power disruptions in the DRC. During Q3 2012, approximately 516 production hours were lost across the operation due to power disruptions. This amounts to approximately 21 days of lost production and includes the time from the power disruption until equipment is operating at pre power disruption capacity. The lost production hours across the operation during Q3 YTD 2012 amounted to approximately 1,187 hours or 49 days. The lost production time excludes the adverse impact on equipment availability due to the unplanned shut downs and subsequent start ups of the equipment due to the power disruptions. The new convertor as part of the World Bank power project and the new synchronous condenser as part of the refurbishment of the DRC's power generating, transmission and distribution systems are expected to be commissioned during the fourth quarter of 2012. Commissioning has been affected by the transport industry strike in South Africa during September and October 2012 as well as the strike at the Kasumbalesa border post during October 2012. Post commissioning, the Company expects power disruptions to decrease. In the medium to long term, 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 Q3 2012, were $133.6 million and for Q3 YTD 2012 were $370.8 million.
- The sales value of oxide concentrate available to be shipped but not invoiced as at September 30, 2012, amounted to approximately $124.7 million and the sales value of copper nodules available to be shipped as at September 30, 2012, amounted to approximately $98.7 million. The Company commenced exporting copper nodules during Q3 2012.
- For Q3 2012, the Company generated a net income attributable to shareholders of $14.8 million, and for Q3 YTD 2012, the Company generated a net income of $31.6 million.
- Cash and cash equivalents as at September 30, 2012, amounted to $33.8 million.
- Due primarily to the strikes in South Africa and at the Kasumbalesa border post, the Company expects the first copper cathode production through the new Solvent Extraction "SX" plants and converted copper Electro-Winning "EW" facility during the fourth quarter of 2012. Mechanical completion of the Updated Phase 4 Expansion is expected in the third quarter of 2013.
- The first phase of the feasibility study for the potential T17 underground mine is expected to be completed during the first quarter of 2013. This will potentially allow for the exploitation of additional T17 mineral resources below the bottom of the current open pit through underground mining techniques.
Katanga also announces that Mr. Cornelis Erasmus, non-executive Director and Member of the Audit Committee of the Company, has resigned to pursue other opportunities.