Katanga Mining Limited (KAT)

[Shindoesca]

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