KAT is in big trouble - has run out of cash...
Katanga mulls funding options, warns of dire straits
Text Size
Published on15th December 2008
I find this story amazing. What happened to the $180MM in cash as of Sept 30????
TORONTO(miningweekly.com) - Copper- and cobalt-miner Katanga Mining, which hasalready scaled back its operations to cushion the effects of low metalsprices, cautioned on Monday that it required additional funding "on anurgent basis" to stay afloat.
The firm's cash reserves will beenough to fund continuing operations for a short period only, atcurrent expenditures and operating levels.
Katanga said it isexamining a number of options to ensure it continues as a goingconcern, including a share sale and a convertible debt financing with anumber of shareholders.
If a convertible debt financing optionis pursued it is possible that participating shareholders would bepermitted to significantly increase their equity stake without priorshareholder approval, the firm pointed out.
The company has seta shareholder meeting for January 12 for a vote on increasing itsauthorised share capital to 5-billion shares, with a par value ofC$0,10 each.
The company currently has an authorised share capital of 300-million, with 206,1-million shares issued and outstanding.
Katanga also announced on Monday that CFO Stephen Jones had resigned effective December 9.
He will be replaced by finance director Nicholas Brodie.
Katanga,which is consolidating, rehabilitating and expanding the neighbouringKamoto and KOV operations in the Democratic Republic of Congo, aftermerging with rival Nikanor earlier this year, said in October it wasreviewing capital expenditure plans going forward.
The companythen announced on November 21 that it had temporarily stopped miningoperations at its Tilwezembe open pit and ore processing at its Kolweziconcentrator, in the Democratic Republic of Congo, in response toslumping cobalt prices.
TSX-listed Katanga's shares fell 6,5% on Monday morning, to C$0,36 each by 11:02 in Toronto