Katanga Mining Provides Update on Major Projects, Announces 2018 Fourth Quarter and Year End Production Results

ZUG, Switzerland, Jan. 31, 2019 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today provides an update on its major projects and announces its 2018 fourth quarter and year-end production results.

Major projects update

Q4 2018 WOL Project Update

During Q4 2018, the final components of Phase 2 of the whole-ore leach project ("WOL Project"), being the remaining counter-current decantation ("CCD") circuit and the electro-winning tankhouse ("EW") were commissioned.

The WOL Project includes the construction of copper and cobalt circuits intended to reliably produce up to 300,000tpa of copper cathode over the life of the mine. This is achieved by adding leach capacity at Luilu in order to leach run-of-mine oxide ore directly rather than concentrating the oxide ore at KTC. Notwithstanding this target capacity, production in any given year will fluctuate as a function of numerous factors, including availability and utilization of the plant, geological and mining conditions, logistics, availability of reagents, availability of electricity, macro-economic factors such as commodity prices, input costs and geopolitical developments (including with respect to the new DRC Mining Code).

Q4 2018 Cobalt Projects Update

The cobalt debottlenecking project is progressing on schedule. The three new filter presses, an MgO reagent plant within the existing cobalt circuit and the construction of two cobalt hydroxide dryers are scheduled for completion and commissioning during Q1 2019.

The objective of the cobalt project is to upgrade the existing cobalt plant design to reduce the bottlenecks and align the life-of-mine cobalt production plan of 30,000tpa on average and 40,000tpa maximum capacity. This is accomplished by modifications to the precipitation, thickening, filtration, drying and bagging processes. Notwithstanding this target capacity, production in any given year will fluctuate as a function of numerous factors, including availability and utilization of the plant, geological and mining conditions, logistics, availability of reagents, availability of electricity, macro-economic factors such as commodity prices, input costs and geopolitical developments (including with respect to the new DRC Mining Code).

Q4 2018 Acid Plant Update

The Acid Plant is a sulphuric acid and sulphur dioxide production plant at KCC, (the "Acid Plant"), which is intended to improve the reliability of the supply of these reagents to the WOL Project processing circuits. In addition to a continuation of detailed design work on the Acid Plant, earthworks were completed, civil works are progressing and orders for long lead items continue to arrive on site. Commissioning of the Acid Plant is expected to commence in Q4 2019.

Production highlights during the three months and year ended December 31, 2018, and outlook

Copper and Cobalt Production

Copper cathode production increased to 49,770 tonnes in Q4 2018 from 39,296 tonnes in Q3 2018. Copper cathode production increased to 152,358 tonnes in 2018 from 2,196 tonnes in 2017.

Cobalt contained in hydroxide produced increased to 4,646 tonnes in Q4 2018 from 3,512 tonnes in Q3 2018. Cobalt contained in hydroxide produced increased to 11,112 tonnes in 2018 from nil tonnes in 2017.

The increase in copper cathode and cobalt contained in hydroxide produced in both periods is related to the ongoing ramp-up of production and the commissioning and re-commissioning of related assets.

The export of cobalt hydroxide by KCC remains suspended. As previously announced, the current situation relates to the levels of uranium contained in cobalt hydroxide produced by KCC. The low levels of radioactivity detected in the uranium to date do not present a health and safety risk.

While the Company is working with its partner Gécamines on a long-term technical solution in the form of constructing an ion exchange plant, and a feasibility study including the design of such plant is being completed, the Company has been working on various alternative interim solutions, both operational and regulatory, to recommence exports.

On January 30, 2019, the Company's 75% operating subsidiary Kamoto Copper Company ("KCC") received a letter from the DRC Minister of Mines following the inspection conducted by the DRC Government in Q4 2018. The Minister of Mines raised certain concerns with the technical solutions identified by KCC and requested that KCC suspend the project to build an ion exchange plant until further notice. KCC intends to engage with the Ministry of Mines to understand and address their concerns. 

Subject to (i) obtaining the necessary authorizations for the ion exchange plant and (ii) the completion of a feasibility study including the detailed engineering design of such plant, the commissioning of the ion exchange plant is expected to commence in Q4 2019. Annual cobalt production guidance for FY2019 remains unchanged at 26kt^[1], however sales of the FY2019 cobalt production are now expected mostly to be recognized in FY2020.

Mining

		Three months ended			Twelve months ended
		Dec 31,	Sep 30,	Dec 31,	Dec 31,	Dec 31,
		2018	2018	2017	2018	2017
Ore mined*/**
KOV open pit	tonnes	1,465,641	2,343,785	433,169	6,479,571	433,169
Mashamba East open pit	tonnes	851,968	953,909	-	3,318,476	-
Total open pits	tonnes	2,317,609	3,297,694	433,169	9,798,047	433,169
KTO underground	tonnes	154,022	141,973	-	369,680	-
Total ore mined	tonnes	2,471,631	3,439,667	433,169	10,167,727	433,169
Waste mined and primary development*
KOV open pit	tonnes	8,057,522	8,369,083	7,045,278	29,757,641	31,571,164
Mashamba East open pit	tonnes	5,777,914	6,996,303	4,147,881	21,224,044	13,710,246
Total open pits	tonnes	13,835,436	15,365,386	11,193,159	50,981,685	45,281,410
KTO underground primary development	meters	151	126	-	1,127	-
Total waste mined***	tonnes	13,835,436	15,365,386	11,193,159	50,981,685	45,281,410
Total material mined
KOV open pit	tonnes	9,523,163	10,712,868	7,478,447	36,237,212	32,004,333
Mashamba East open pit	tonnes	6,629,882	7,950,212	4,147,881	24,542,520	13,710,246
Total open pits	tonnes	16,153,045	18,663,080	11,626,328	60,779,732	45,714,579
KTO underground	tonnes	154,022	141,973	-	369,680
Total material mined***	tonnes	16,307,067	18,805,053	11,626,328	61,149,412	45,714,579
Total contained copper	tonnes	61,393	69,643	9,459	218,147	9,459
Ore summary
Total primary ore mined	tonnes	1,648,105	1,655,605	291,947	5,322,494	291,947
Average Cu grade	%	3.28	3.48	2.92	3.49	2.92
Average Co grade	%	0.41	0.51	0.57	0.46	0.57
Total low-grade ore mined	tonnes	616,436	789,380	85,875	2,299,703	85,875
Average Cu grade	%	1.04	0.97	0.88	1.01	0.88
Average Co grade	%	0.18	0.21	0.20	0.20	0.20
Total cobalt ore mined	tonnes	207,090	994,682	55,347	2,545,530	55,347
Average Co grade	%	0.58	0.57	0.32	0.59	0.32
Average Cu grade	%	0.42	0.44	0.43	0.36	0.43
Total ore mined	tonnes	2,471,631	3,439,667	433,169	10,167,727	433,169
Average Cu grade	%	2.48	2.02	2.18	2.15	2.18
Average Co grade	%	0.37	0.46	0.48	0.43	0.48

* These segments include classification of ore volumes into different categories, being primary copper containing ore, low-grade copper containing ore (but still above cut-off grade) and cobalt containing ore (that contains copper under the copper cut-off grade but cobalt over the cobalt cut-off grade). The primary ore component is defined as having a Cu grade of greater than 1.25%, the low grade component is defined as having a Cu grade between 0.65% and 1.25% and the cobalt ore component is defined as having a Cu grade of less than 0.65% and Co grade greater than 0.30%

** Excludes any ore hydro-mined out of Kamoto Interim Tailings Dam (KITD) as this is not a traditional mining operation, but instead, a hydro-mining reclamation project

***Underground waste is excluded

Rounding of tonnes and grades may result in apparent summation differences between tonnes, grades and contained metal content

Total ore mined decreased to 2,471,632 tonnes in Q4 2018 from 3,439,667 tonnes in Q3 2018. Total ore mined increased to 10,167,727 tonnes in 2018 from 433,169 tonnes in 2017.

Total waste mined decreased to 13,835,436 tonnes in Q4 2018 from 15,365,386 tonnes in Q3 2018. Total waste mined increased to 50,981,685 tonnes in 2018 from 45,281,410 tonnes in 2017.

Total contained copper decreased to 61,393 tonnes in Q4 2018 from 69,643 tonnes in Q3 2018. Total contained copper increased to 218,147 tonnes in 2018 from 9,459 tonnes in 2017.

The decrease in total material mined in the combined open pits in Q4 2018 compared to Q3 2018 reflects the commencement of the rainy season.

The increase in total material mined in the KTO underground in Q4 2018 compared to Q3 2018 relates to the increase in secondary development as well as the continuation of primary development. KTO underground productivity has been supported by the re-commissioning in Q4 2018 of:

• one Atlas Copco ST1030 loader for increased underground loading capacity; and
• one Atlas Copco 282 boomer for development.

The decrease in total contained copper in Q4 2018 compared to Q3 2018 is driven by the decrease in total ore mined, offset by a higher average copper grade, in line with the optimized mine plan.

The ongoing mining and stockpiling of very low-grade ore and cobalt ore reflects the optimization of the long-term feed strategy. As a result of this strategy, low-grade ore, below budgeted feed grades and cobalt ore are currently being stockpiled for future feed into the processing plant.

Kamoto concentrator ("KTC")

		Three months ended			Twelve months ended
		Dec 31, 2018	Sep 30, 2018	Dec 31, 2017	Dec 31, 2018			Dec 31, 2017
Total material milled and processed	tonnes	2,482,663	1,944,616	644,829		7,529,596	1,922,101
KITD material processed	tonnes	726,206	620,909	481,618		2,483,170	1,758,890
Cu grade in ore	%	1.55	1.63	1.67		1.57	1.30
Co grade in ore	%	0.18	0.18	0.20		0.18	0.17
Open pit ore milled	tonnes	1,600,911	1,178,617	163,211		4,703,020	163,211
Cu grade in ore	%	3.18	3.26	4.05		3.43	4.05
Co grade in ore	%	0.42	0.47	0.62		0.45	0.62
Underground ore milled	tonnes	155,546	145,090	-		343,406	-
Cu grade in ore	%	3.40	3.28	-		3.34	-
Co grade in ore	%	0.65	0.65	-		0.63	-
Production
Oxide concentrate	tonnes	35,752	21,621	22,268		107,094	65,383
Sulphide concentrate	tonnes	30,026	27,501	10,270		98,488	30,432
Total concentrate produced	tonnes	65,778	49,122	32,538		205,582	95,815
Cu grade in concentrate	%	20.77	24.37	18.33		20.19	16.51
Co grade in concentrate	%	2.68	2.96	1.44		2.10	1.18
Oxide feed received at Luilu	tonnes	1,602,666	1,195,149	126,471		4,666,773	126,471
Cu grade in oxide feed	%	2.86	2.99	3.58		3.02	3.58
Total contained copper	tonnes	59,527	47,660	10,489		182,570	20,340
Rounding of tonnes and grades may result in apparent summation differences between tonnes, grades and contained metal content

Total material milled and processed increased to 2,482,663 tonnes in Q4 2018 from 1,944,616 tonnes in Q3 2018. Total material milled and processed increased to 7,529,596 tonnes in 2018 from 1,922,101 tonnes in 2017.

Total concentrate produced increased to 65,778 tonnes in Q4 2018 from 49,122 tonnes in Q3 2018. Total concentrate produced increased to 205,582 tonnes in 2018 from 95,815 tonnes in 2017.

Total oxide feed received at Luilu increased to 1,602,666 tonnes in Q4 2018 from 1,195,149 tonnes in Q3 2018. Total oxide feed received at Luilu increased to 4,666,773 tonnes in 2018 from 126,471 tonnes in 2017.

Total contained copper in concentrate and oxide feed produced increased to 59,527 tonnes in Q4 2018 from 47,660 tonnes in Q3 2018. Total contained copper in concentrate and oxide feed received at Luilu increased to 182,570 tonnes in 2018 from 20,340 tonnes in 2017.

The increase in total material milled and processed in Q4 2018 compared to Q3 2018 is driven by the increase in milling capacity from the commissioning of CM6 and CM7. The increase in total material milled and processed in 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 increase in total material milled and processed, concentrate produced, oxide feed received at Luilu and total contained copper in 2018 compared to 2017 has been achieved by the optimization and ramp-up of the current milling capacity in line with the WOL Project commissioning plan.

Luilu metallurgical plant

		Three months ended			Twelve months ended
		Dec 31, 2018	Sep 30, 2018	Dec 31, 2017	Dec 31, 2018	Dec 31, 2017
WOL feed – oxide concentrate*	tonnes	35,752	22,096	13,755	198,317	13,755
WOL feed – oxide feed	tonnes	1,602,666	1,195,149	126,471	4,666,773	126,471
Total oxide feed	tonnes	1,638,418	1,217,245	140,226	4,865,090	140,226
Total oxide Cu grade	%	3.07	3.20	4.45	3.44	4.45
Total oxide Co grade	%	0.43	0.44	0.65	0.45	0.65
Sulphide roaster feed	tonnes	25,588	26,688	-	58,099	-
Sulphide Cu grade	%	27.27	29.98	-	29.17	-
Sulphide Co grade	%	3.86	4.22	-	4.04	-
Production
Copper cathode	tonnes	49,770	39,296	2,196	152,358	2,196
Cobalt contained in hydroxide	tonnes	4,646	3,512	-	11,112	-
*consists of amounts produced at KTC during previous periods plus inventory drawdown
Rounding of tonnes and grades may result in apparent summation differences between tonnes, grades and contained metal content

Total copper cathode produced increased to 49,770 tonnes in Q4 2018 from 39,296 tonnes in Q3 2018. Total copper cathode produced increased to 152,358 tonnes in 2018 from 2,196 tonnes in 2017.

Total cobalt contained in hydroxide increased to 4,646 tonnes in Q4 2018 from 3,512 tonnes in Q3 2018. Total cobalt contained in hydroxide increased to 11,112 tonnes in 2018 from nil tonnes in 2017.

The increase in copper cathode and cobalt contained in hydroxide produced in Q4 2018 compared to Q3 2018 is driven by the increase in total oxide feed, which has been supported by the commissioning of additional electro-winning capacity.

The increase in copper cathode and cobalt contained in hydroxide produced in 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 in 2018 compared to 2017 have been achieved by:

• commissioning of the second train of the WOL Project and both CCD circuits;
• commissioning of the second high-grade solvent extraction train and the low-grade circuit, the cobalt purification plant and the associated utility plants;
• re-commissioning of the sulphide receiving circuit which consists of thickeners and receiving tanks, roaster 5 and its associated auxiliary equipment;
• increasing total sulphide feed to be roasted and leached in line with the ramp-up of operations for Phase 2 of the WOL Project commissioning plan;
• re-commissioning of EW 2 and EW 3; and
• completion and commissioning of EW 4.

Outlook

2019 full year production guidance is 285kt of copper cathode and 26kt of cobalt contained in hydroxide.

Qualified Person

Tahir Usmani, PEng, APEGA, Chief Mine Planning Engineer of KCC, has reviewed and approved the scientific and technical disclosure in this news release. Mr. Usmani is a "qualified person" for the purposes of NI 43-101 - Standards of Disclosure for Mineral Projects.

About Katanga Mining Limited
Katanga Mining Limited operates a major mine complex in the Democratic Republic of 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. Katanga is listed on the Toronto Stock Exchange under the symbol KAT.

Forward Looking Statements
This press release may contain forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. This press release may contain forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

All forward-looking statements reflect the Company's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. All of the Company's forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions listed below. Although the Company believes that these assumptions are reasonable, this list is not exhaustive of factors that may affect any of the forward-looking statements. The key assumptions that have been made in connection with the forward-looking statements include the following: the operations of the Company during the ramp up of production following the commissioning of the Whole Ore Leach ("WOL") Project remaining consistent with management's expectations, there being no significant disruptions affecting the operations of the Company whether due to labour disruptions, supply disruptions, power disruptions, rollout of new equipment, damage to equipment or otherwise; permitting, development, operations, expansion and acquisitions at KCC being consistent with the Company's current expectations; continued recognition of the Company's mining concessions and other assets, rights, titles and interests in the DRC; political and legal developments in the DRC being consistent with its current expectations; the continued provision or procurement of additional funding from Glencore for operations; the completion of the T17 Underground Mine and the Power Project (as defined in the Annual Information Form of the Company for the year ended December 31, 2017 dated April 2, 2018); that new equipment performs to expectations; the exchange rate between the US dollar, South African rand, British pound, Canadian dollar, Swiss franc, Congolese franc and Euro being approximately consistent with current levels; certain price assumptions for copper and cobalt; prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; production and cost of sales forecasts for the Company meeting expectations; the accuracy of the current ore reserve and mineral resource estimates of the Company (including but not limited to ore tonnage and ore grade estimates); and labour and material costs increasing on a basis consistent with the Company's current expectations.

Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of copper and cobalt; possible variations in ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, development or construction activities, delays due to strikes or other work stoppage, both internal and external to the Company as well as those factors disclosed in the Company's the Annual Information Form for the year ended December 31, 2017 dated April 2, 2018 and other publicly filed documents. Although Katanga has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise, except in accordance with applicable securities laws.

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^[1] Annual cobalt production guidance subject to +/- 2kt variation

SOURCE Katanga Mining Limited

Longview Communications Inc., Joel Shaffer (Toronto), [phone], [email protected]; Alan Bayless (Vancouver), [phone], [email protected]

Related Links

http://www.katangamining.com/