ZUG, Switzerland, Aug. 8, 2014 /CNW/ - Katanga Mining Limited (TSX: KAT) (" Katanga" or the " Company") today announces its financial results for the second quarter of 2014. Katanga's Financial Statements and Management's Discussion and Analysis will be filed on SEDAR, www.sedar.com.
Highlights during the three and six months ended June 30, 2014, and Outlook
- During the three months ended June 30, 2014 ("Q2 2014"), the Company mined a record 2,014,017 tonnes of ore, a 2% increase over the three months ended June 30, 2013 ("Q2 2013"), at a grade of 3.84% resulting in contained copper in ore mined of 77,345 tonnes. During the six months ended June 30, 2014 ("H1 2014"), the Company mined 3,344,908 tonnes of ore, an 8% increase over the six months ended June 30, 2013 ("H1 2013"), at a grade of 3.92% resulting in contained copper in ore mined of 130,981 tonnes.
- Ore mined at KOV Open Pit during Q2 2014 was 1,509,804 tonnes, a 2% decrease from Q2 2013. The average copper grade of ore mined from KOV Open Pit during Q2 2014 was 4.05%, resulting in contained copper in ore mined of 61,115 tonnes. Waste mined at KOV Open Pit during Q2 2014 was 9,159,252 tonnes, a 52% increase over Q2 2013. Ore mined at KOV Open Pit during H1 2014 was 2,359,656 tonnes, a 4% increase over H1 2013. The average copper grade of ore mined from KOV Open Pit during H1 2014 was 4.18%, resulting in contained copper in ore mined of 98,745 tonnes. Waste mined at KOV Open Pit during H1 2014 was 15,148,828 tonnes, a 31% increase over H1 2013. Total volume increase was attributed to the addition of 4 new Caterpillar 793D haul trucks in Q2 2014.
- Ore mined at KTO Underground Mine during Q2 2014 was 504,213 tonnes, a 17% increase over Q2 2013. The average copper grade of ore mined from KTO Underground Mine during Q2 2014 was 3.22%, resulting in contained copper in ore mined of 16,231 tonnes. Ore mined at KTO Underground Mine during H1 2014 was 951,614 tonnes, a 14% increase over H1 2013. The average copper grade of ore mined from KTO Underground Mine during H1 2014 was 3.31%, resulting in contained copper in ore mined of 31,505 tonnes. Total volume increase was primarily due to higher stope availability resulting from increased backfilling and development.
- At T17 Open Pit, during H1, 2014, 30,362 tonnes of waste and 33,638 tonnes of ore were mined at an average copper grade of 2.17%. The ore and waste removed will facilitate ongoing infrastructure works which commenced in Q1 2014, related to the T17 Underground Mine.
- At T17 Underground Mine in development, during H1, 2014, 14,310 tonnes of waste and zero tonnes of ore mined. Total cumulative advance in primary development is 118 metres.
- In Q2 2014, the Company commissioned:
- Four new Caterpillar 793D haul trucks operating in KOV to increase ore and waste mining capacity and reduce contractor dependency;
- Shaft 2 winder upgrade at KTO; and
- Six Caterpillar AD45 underground mine trucks, this equipment is expected to accelerate development, whilst reducing contractor dependency.
- Additionally, in H1 2014, the Company commissioned a further:
- Three new Atlas Copco MT436B haulage trucks for waste at KTO with this equipment expected to accelerate development, whilst reducing contractor dependency and overall haulage and backfill costs; and
- Two new Caterpillar 992K loaders and two Caterpillar drill rigs at KOV, to increase loading capacity and reduce dependency on contractor primary and secondary drilling.
- Ore milled at the Kamoto Concentrator ("KTC") during Q2 2014 was a record 1,527,708 tonnes, an 11% increase over Q2 2013. Ore milled at KTC during H1 2014 was a record 3,041,924 tonnes, a 16% increase over H1 2013.
- In Q2 2014, 187,357 tonnes of concentrate (13% higher than Q2 2013) containing 43,107 tonnes of copper (14% higher than Q2 2013) were produced. In H1 2014, 348,344 tonnes of concentrate (11% higher than H1 2013) containing 79,422 tonnes of copper (11% higher than H1 2013) were produced.
- Copper produced in metal and concentrate for Q2 2014 totalled a record 41,026 tonnes, a 30% increase over Q2 2013. Copper produced in metal and concentrate for H1 2014 totalled 72,600 tonnes, a 20% increase over H1 2013.
- Cobalt metal produced totalled 523 tonnes for Q2 2014, a 25% decrease from Q2 2013. Cobalt metal produced totalled 1,001 tonnes for H1 2014, a 2% decrease from H1 2013.
- In Q2 2014, the Company commissioned:
- KTC reagent preparation plant and dosing and distribution systems, improving recoveries and decreasing costs;
- Lime and sodium-metabisulfite plants at Luilu refinery, improving cobalt precipitation and overall cobalt recovery;
- Roaster line 2 at Luilu refinery, adding additional sulphide roasting capacity; and
- Diluent storage facility, improving cost control.
- As part of the Updated Phase 4 Expansion Project (which is set out in the 2012 ITR – refer to item 16), the final train of the Solvent Extraction ("SX") plant increasing SX plant capacity to 300,000 tonnes per annum ("tpa") of copper transfer was commissioned during Q2 2014.
- During Q2 2014, Phase 5, which includes EW3 (2 x 30,000 tpa capacity EW tankhouse units) and CM5 (mill of 11,700 tonnes per day nameplate capacity), continued to progress in line with expectation, $112.2 million having been spent to date. For CM5, all the major components are on site and assembly is progressing according to schedule. Phase 5 is expected to be completed during Q4 2014.
- The T17 Underground Mine development continued during Q2 2014 with the following progress:
- Portal and interim mine services have been established;
- Cumulative primary development advance is 118m;
- Purchase of initial mine fleet; and
- Engineering and procurement for key surface and underground infrastructure has commenced.
- Total sales for Q2 2014 were $305.2 million, a 49% increase over Q2 2013. Total sales for H1 2014 were $515.1 million, a 31% increase over H1 2013.
- The realised copper price for Q2 2014 was $3.14/lb, a 5% increase over Q2 2013, while the realised cobalt price was $11.84/lb, a 13% decrease from Q2 2013.
- For Q2 2014, the Company earned a net income attributable to shareholders of $41.46 million, an increase of $26.9 million from Q2 2013. For H1 2014, the Company earned a net income attributable to shareholders of $77.9 million, an increase of $33.2 million from H1 2013.
- C1 cash costs for Q2 2014 were $2.05 per pound of copper, a 21% improvement over Q2 2013. C1 cash costs for H1 2014 were $2.37 per pound of copper, a 15% improvement over Q2 2013. Refer to Non-IFRS measures in Katanga's Q2 2014 Management's Discussion and Analysis.
- Cash and cash equivalents as at June 30, 2014, amounted to $66.5 million ( December 31, 2013 - $25.7 million).
- Operational ramp up is expected to continue with: the expected completion of the Phase 5 project in Q4 2014; identified operational improvements leading to higher metal recovery rates; and additional steps to mitigate ongoing power issues, all leading to further reductions in C1 costs as a result of increased volume.
- KOV fleet dispatch tracking system is planned to be deployed in Q3 2014, and is expected to increase control over tracking and dispatch of open pit mobile equipment.
- During H2 2014, KTC plans to install a slurry analyzer which is expected to assist in rapid determinations of the mineral composition of the slurry before floatation, allowing a more precise and optimal reagent mix.
- During Q3 2014, the installation of a 10 megawatt diesel co-generation plant is expected to result in increased back-up generator capacity and decreased electricity availability issues.
- During H2 2014, the construction of two heap leach pads is expected to add further capacity for the treatment of low grade material.
- During H2 2014, additional pregnant leach solution and raffinate ponds are to be added to the current process flow at Luilu, in order to split the ponds into high and low grade solution which is expected to drive higher recoveries and lower reagent consumption in the leach and neutralisation phase.
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