Katanga Mining Ltd Ord KATFF

Mutanda - best news for KAT shareholders if official

[Sogosohubidu201]

Mutanda 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.

[Lech1988]

Yes, KAT will be hopefully borderline profitable with just Copper sales assuming costs are kept in check. 

[Dragone64]

However, I do not see any kind of catalyst to push the SP higher in the coming 3-6 months....having said that I would think that the SP will move in the range of 40-65 cents. I have also the feeling that Q1 might deliver again a loss. I am more positive for 2020 but I think a SP of above 1.50 is just a lot of wishfull thinking. To many issues, to much debt and cobalt prize will not recover so fast

[Lech1988]

Copper and Cobalt prices should trend higher this year + any breakthrough on the ion exchange system or mining code should get KAT moving.  But again I suspect there is no real "concern" with the ion exchange system. Likely the DRC and Glencore are happy to withhold exports to prop up the price. 

[Cassius1977]

As I've said before I'm not a KAT holder so I won't speculate on SP.  One area where I think you're mistaken though is the cobalt price.  The amount being potentially taken off the market could very easily cause a price spike this year.  Particulary considering the delay in developing 811 cathode formulations and the amount of giga factories that are expanding or

[Sogosohubidu201]

Mutanda copper production to be reduced from 200K to 100K tonnes and cobalt production to be reduced from 27K to 25k tonnes in 2019 per Glencore presentation this morning