Mutanda - best news for KAT shareholders if officialMutanda news would be the best news for KAT shareholders if officially confirmed, which may come tomorrow when Glencore announces Q4 2018 earning report. If Mutanda production is cut or curbed, KAT shareholders will have the following benefits:
As KAT shareholders, we are hedged. While high cobalt inventory in South Africa warehouses should meet the short term demand increase, without cobalt sale from KAT, there will be cobalt shortage after short period of time. The cobalt price will increase, so is KAT share price. This news also forces DRC and Glencore to resolve uranium issue and recommence KAT cobalt sale as soon as possible. If KAT recommences cobalt sale. it will generate great earnings and free cashflow, KAT share price will increase. So, either way, with or without KAT cobalt sale, the KAT share price will rise.
This also removes sizable copper volume from the market, widening the copper deficit in 2019 and 2020. Copper price will increase, potentially above $7,000 USD per tonne if US/China resolves the trade issue, which is expected in the next 3-6 months. If so, at and after Q2 this year, copper sale alone will make KAT profitable.