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Glencore reports higher output from key DRC asset
Glencore, the miner and commodity trader, has reported higher output from its key copper and cobalt mine in the Democratic Republic of Congo.
The Swiss-based group said Katanga had produced 35,6000 tonnes of copper in three months to June, against from 27,000 in the previous quarter, and 2,500 tonnes of cobalt, up from 500 tonnes.
Glencore, which is run by Ivan Glasenberg, suspended mining at Katanga in 2015 so that it could invest in new processing technology, which came on line this year.
Analysts at Barclays said Tuesday’s trading update suggested the “ramp-up” was progressing well and the mine was on target to produce 150,000 tonnes of copper this year.
Katanga is Glencore’s most important growth asset and is set to become the world’s biggest producer of cobalt, a key battery metal. In June Glencore settled a legal dispute with Gécamines, the DRC’s state-owned mining company, which threatened its control of the mine.
Glencore said its total African copper production, including its operations in Zambia, jumped 75 per cent to 194,600 tonnes in the six months to June while cobalt, rose 32 per cent to 14,800 tonnes.
With half results due next week, Glencore did not provide an update on the performance of its powerful trading, or ‘marketing’ arm. However, it did revise production guidance for its lead and coal divisions, reducing them by 5 per cent and 2 per cent respectively.
Glencore is one of the world’s biggest traders of metals, minerals and oil, something that sets the company apart from its peers. The company said earlier this year that it expected earnings from its trading business, to be in the top half of a $2.2bn to $3.2bn range.
“African copper saw a faster ramp up at Katanga than we had modelled and stronger performance at both Mutanda and Mopani, also translating into the higher cobalt production,” said Tyler Broda analyst at RBC Capital Markets.
https://www.ft.com/content/09a5e4e6-9489-11e8-b67b-b8205561c3fe
Katanga mining announces 2018 second quarter production results and date of release of 2018 second quarter financial results
ZUG, Switzerland, July 30, 2018 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announces its 2018 second quarter production results and date of release of 2018 second quarter financial results. Katanga's unaudited interim financial statements and accompanying Management's Discussion and Analysis will be filed on SEDAR, www.sedar.com.
Production highlights during the three and six months ended June 30, 2018
Commissioning and resumption of production after 2015 suspension
On September 11, 2015, the Company announced the decision to suspend the processing of copper and cobalt during the construction phases of the whole ore leach project ("WOL Project"). The suspension continued throughout most of 2017 with copper production resuming on December 11, 2017.
During Q2 2018, construction continued on phase 2 of the WOL Project. Progress was made on the high-grade clarifier, receiving thickener and the post-leach clarifier for copper production. The core copper circuit of train 2 is expected to be completed and commissioned during Q3 2018. The final components of the WOL Project being the train 2 counter current decantation ("CCD") wash circuits and electro-winning tank house are scheduled for completion and commissioning by Q4 2018; and
Copper cathode production has increased to 35,615 tonnes in Q2 2018 from 27,677 tonnes in Q1 2018. Cobalt contained in hydroxide has increased to 2,429 tonnes in Q2 2018 from 525 tonnes in Q1 2018. The increase in copper cathode and cobalt contained in hydroxide are related to the ongoing ramp-up of production and the commissioning and re-commissioning of related assets.
Total ore mined increased to 2,854,228 tonnes in Q2 2018 from 1,402,201 tonnes in Q1 2018. Total ore mined increased to 4,256,429 tonnes in H1 2018 from nil tonnes in H1 2017.
Total waste mined increased to 12,484,820 tonnes in Q2 2018 from 9,379,254 tonnes in Q1 2018. Total waste mined increased to 21,864,073 tonnes in H1 2018 from 19,743,595 tonnes in H1 2017.
Total contained copper increased to 58,350 tonnes in Q2 2018 from 28,761 tonnes in Q1 2018. Total contained copper increased to 87,111 tonnes in H1 2018 from nil tonnes in H1 2017.
The increase in total material mined in the open pits in Q2 2018 against Q1 2018 is relating to the seasonal transition from the rainy season to dry season which allowed for greater equipment utilization as well as the ongoing ramp-up of production, in line with the optimized mine plan following the resumption of ore mining activities in Q4 2017. It has been supported by the re-commissioning and commissioning of:
six CAT 793D trucks for increased hauling capacity;
one CAT D9R dozer related to the ongoing mining ramp-up;
one CAT 6060 diesel shovel for increased mining capacity;
two CAT 745 ADT lube trucks for increased ancillary work;
one CAT CS74B compactor for road and access maintenance; and
one CAT 745 ADT service truck to support production ramp-up.
The increase in total contained copper in Q2 2018 compared to Q1 2018 and H1 2018 compared to H1 2017 is driven by an increase in total ore mined due to the suspension of ore mining activity in the 2017 comparable periods and the subsequent resumption of production, in line with the optimized mine plan, to ensure sufficient ore availability for the WOL Project.
The increase in total material mined in the KTO underground in Q2 2018 against Q1 2018 and H1 2018 against H1 2017 is relating to the commencement of training in secondary development (ore) as well as the continuation of training in primary development (waste).
The increase in very low-grade ore and cobalt ore mined in Q2 2018 against Q1 2018 and H1 2018 against H1 2017 is relating to optimization of the long-term feed strategy; very low-grade ore and cobalt ore are currently being stockpiled for future feed into the processing plant.
Total material milled increased to 1,970,359 tonnes in Q2 2018 from 1,624,655 tonnes in Q1 2018. Total material milled increased to 3,595,014 tonnes in H1 2018 from 690,608 tonnes in H1 2017.
Total concentrate produced increased to 65,519 tonnes in Q2 2018 from 60,450 tonnes in Q1 2018. Total concentrate produced increased to 125,969 tonnes in H1 2018 from 33,786 tonnes in H1 2017.
Total oxide feed received at Luilu increased to 1,020,106 tonnes in Q2 2018 from 819,200 tonnes in Q1 2018. Total oxide feed received at Luilu increased to 1,839,306 tonnes in H1 2018 from nil tonnes in H1 2017.
Total contained copper in concentrate and oxide feed produced increased to 42,612 tonnes in Q2 2018 from 34,996 tonnes in Q1 2018. Total contained copper in concentrate and oxide feed produced increased to 77,608 tonnes in H1 2018 from 4,880 tonnes in H1 2017.
The increase in total material milled, concentrate and oxide feed received at Luilu and total contained copper in concentrate and oxide feed in Q2 2018 compared to Q1 2018 and H1 2018 compared to H1 2017 reflects the resumption of production in December 2017 following the completion of phase 1 of the WOL Project. Processing activities were largely suspended during the comparative periods in 2017. The increases for the year to date have been achieved by:
increasing the capacity of the hydro mining station to treat KITD material at 500 tonnes per hour;
an increase in total ore availability, in line with the optimized mine plan, to ensure sufficient ore availability for the WOL Project; and
re-commissioning of two additional cascade mills to support increased sulphide material throughputs as well as the sulphide floatation circuit comprising of tank cells and two banks of Wemco cleaner cells.
Total copper cathode increased to 35,615 tonnes in Q2 2018 from 27,677 tonnes in Q1 2018. Total copper cathode increased to 63,292 tonnes in H1 2018 from nil tonnes in H1 2017.
Total cobalt contained in hydroxide increased to 2,429 tonnes in Q2 2018 from 525 tonnes in Q1 2018. Total cobalt contained in hydroxide increased to 2,954 tonnes in H1 2018 from nil tonnes in H1 2017.
The increase in copper cathode and cobalt contained in hydroxide in Q2 2018 compared to Q1 2018 and H1 2018 compared to 2017 reflects the resumption of production in December 2017 following the completion of phase 1 of the WOL Project. Processing activities were largely suspended during the comparative periods in 2017. The increases for the year to date have been achieved by:
increasing total oxide feed to be leached in line with the ramp-up of operations;
re-commissioning of the sulphide receiving circuit which comprise the thickeners and receiving tanks, roaster 5 and its associated auxiliary equipment and electro-winning 2; and
commissioning of a low grade solvent extraction circuit, counter current decantation and the cobalt purification plant with the associated utility plants.
Major projects update
WOL Project
The WOL Project includes the construction of optimized copper and cobalt circuits intended to reliably produce up to 300,000 tpa of copper cathode over the life of the mine. This is achieved by adding additional leach capacity at Luilu in order to leach run-of-mine oxide ore directly rather than concentrating the oxide ore at KTC.
Q2 2018 update
Construction has continued on phase 2 of the WOL Project. Progress was made on the high-grade clarifier, receiving thickener and the post-leach clarifier for copper production; and
the core copper circuit of train 2 is expected to be completed and commissioned during Q3 2018. The final components of the WOL Project being the train 2 CCD wash circuits and electro-winning tank house are scheduled for completion and commissioning by Q4 2018.
Cobalt Projects
The objective of the cobalt projects is to upgrade the existing cobalt plant design in order to reduce the bottlenecks and increase production capacity up to 40,000 tpa of cobalt contained in hydroxide by modification to the precipitation, thickening and filtration and drying and bagging processes. The improvements being made as part of the cobalt projects will integrate with the existing WOL processing facilities at Luilu.
Q2 2018 update
Demolition works have been completed to facilitate future construction, civil and earth works are underway in line with the project schedule and long lead items have been ordered; and
Estimated completion for the cobalt projects is Q1 2019.
Acid Plant
In Q4 2017, the Board of Katanga approved a US$237 million capital expenditure spread over 2018 and 2019 to construct a sulphuric acid and sulphur dioxide production plant at KCC, which will improve the reliability of the supply of these reagents to the WOL processing circuits.
Q2 2018 update
In addition to a continuation of design work on the Acid Plant, preliminary earth works have commenced and orders for major long lead items have been placed.
The Company expects to release its second quarter 2018 financial results on or about August 7, 2018.
Outlook
2018 full year guidance remains for 150kt of copper and 11kt of cobalt production.
http://www.katangamining.com/media/news-releases/2018.aspx
Their 10-K looks excellent!
Seekingalpha-article last year was right, this thing is as solid as a rock and keeps on rocking :)
I'm keeping this baby for the long haul!
Together with ALIF somebody had yet to show me 2 better OTC stocks then these two, but if you have other suggestions as well feel free to post ;)
Can't wait for SGAS and ALIF to uplist and show us the money!!!!!
aml,
As a small investor living in the Netherlands I'm not that familiar with all the different statements like the 8K or 10K required in the US and everything they entail.
I try to check the financial statements of companies and if I look at the last quarterly report I mainly try to look at assets and liabilities and number of outstanding shares to determine book value.
The main points I see is steadily increasing assets and investments/construction and a good asset to liability ratio, them make a profit per share at present and looking at the number of shares I come to a higher book value then I'm seeing.
It just seems to look like a decent company with an easy to understand business model and my hope is they will move away from the OTC market in the future. For me it's a comfortable long term investment, time will tell where SGAS will go.
WHI (W Holding) & SGAS (Sinogas)
W Holding just finished restating 2 years worth of numbers.
Sinogas is preparing for uplisting (likely somewhere in 2010).
For both just look at the 3 & 6 month numbers.
SGAS is looking at almost 100% up, WHI is already past 100% in the last quarter.
I'm glad they finally got all their numbers in order and it's good to see that equity grew from 915 to 980 million between 31/12/08 and 31/09/2009.
It's like many investors never realised they did the reverse split. Even with the 100% share increase since I bought at 11,00 the valuation compared to book value is still just so low!
Sometimes you just hit the homerun, all about sentiment and in this case we were all able to capitalize because people no longer took notice of the low valuation because of the delayed numbers for the last 1.5 years while you had a credit crisis.
Once the big guns realise they restated almost 2 years of numbers in the last few months and everything has turned out to be fine we should see this thing getting back to at least a realistic valuation and maybe split to get back to the old number of shares :)
Perhaps in 2 years you'll have the same share price but with 10X the shares or just a $100 share price, who cares.. either way a 10-bagger ;)
I think it's unlikely SGAS will expand into other sectors until they've uplisted.
For 2010 it's likely to assume they will give more priority to maintaining decent expansion and organic growth in their existing model and get the company, corporate governance and management performing at a level whereby uplisting becomes the next logical step. If they then uplist in 2010 or later in 2011 is less important. They should not try to rush.
Besides for existing small shareholders I don't mind having a bit more time to progressively build up a bit more position, because if the seekingalpha article and information in the fox business interview was pretty much correct you will have to buy at much higher levels after uplisting looking at book value, but then it's still OTC so who knows how it will play out.
If you see how those SPNG investors got burned it's sad to see how some companies try to operate, but then WHI and SGAS seem to have much better potential. If a company doesn't have a predicatable, easy to understand business model you should stay away. I rather have Sinogas underpromise and overdeliver then the other way around!
Perhaps it's better to keep a cool head until you're sure of the number of outstanding shares. Without that information, even disregarding possible other issues/uncertainty, it's pretty difficult to determine market cap and the P/B you're paying.
It's a good environment for Sino Gas to expand and make money, from what the CFO is saying. It's clearly a priority for the government to provide adequate housing for the growing middle class, and every new house you build will need to be connected to the grid to supply gas for cooking and heating.
A solid business model in itself, but in this instance government control would seem to be an added benefit. To be able to have a artificially low cost price, if the government deems necessary, will certain provide a bigger spread and less fluctuation when it comes to their operating margin.
It also seems pretty unusual for a CFO of an OTC listed company to be interviewed by a Business program. Perhaps somebody has more information on when they are maybe planning to uplist the company and what may happen to the number of outstanding shares between now and then?
Looking at the seekingalpha article it should have a lot of potential in the next decade, but it's difficult to determine how much position to build up when it's still OTC traded. For that you really need a timeline for uplisting to AMEX or Nasdaq, which wasn't provided in the interview.
Drill, you still have some promising OTC/penny stocks, not everything ends up like with SPNG.
SPNG has been disappointing. They seemed to have something good going, but sometimes greed starts to cloud good judgement and mismanagement takes over. We've seen the result. I had a nice position, sold them after the initial run-up, but was just waiting to get back in & then the NY Post article came out. Thank goodness for people who were waiting to buy, but it's sad to see so many small investors get burned!
Remember they were investing 5 million in GFGU - GetFugu. That's still doing good, but after the initial $ 1.75 million paid, GFGU discovered RM Enterprises, not SPNG, had made the transfer and was also shorting GFGU to get more shares for their buck. They didn't know who RM Enterprises was, but knew something was fishy, so the decided to cancel the arrangement and notified the SEC. These guys from GFGU are ex-Google. ex-Sony, ex-WB, etc. They evidently messed with the wrong guys.
Oww, and to prove there are still good OTC pennies, the CFO of SGAS - Sino Gas was @ Fox Business and those guys evidently are making money and growing +/- 100% per year. I quess it just shows that you need to be careful to fall in love with a particular stock and the bigger the hype, the more careful you should be.
I quess for the future I'll remember that when an OTC company actual advertises their ticker, they're probably growing/financing mostly through increase of outstanding shares, instead of through the product they're producing!
Sino Gas (SGAS) CFO Yugang Zhang @ Fox Business!
http://www.foxbusiness.com/search-results/m/26237828/sino-gas-sees-395-growth-in-4-years.htm