Katanga Mining Ltd Ord KATFF

Here's likely what's happening & what we haven't been told y

[topdop]

Sorry folks.

This looks more & more like the increasing risk here to us KAT minority shareholders - and IN THE ABSENCE OF EXPORT CLEARANCES for all of the radiometrically tainted, and future produced Co(OH)2 - is that Glencore simply instigates a "forced negotiation" with KAT, and because of our current large NEGATIVE CASHFLOWS, from this point, KAT will be contracted to provide all said Co(OH)2 to Glencore on Take & Pay contracts under very unfavorable terms. This would be a classic Glencore trading move. They have the capital to own it now - and wait for the export later - no product moves anywhere - and we get cents on the $ and have all that potential upside removed from our exposure.

These are my views only. Thanks for reading.

[Lech1988]

There really is no evidence of this - the company has always been terrible at communicating good and bad.  Also for all their faults I doubt Gecamines/the DRC government would allow Glencore to offtake Cobalt from their largest Cobalt mine at super unfair terms.  In fact I can't see this happening at all.  This would mean less royalties and tax revenue for their pockets and they

[topdop]

I agree on most of your points & I do hope I'm proven wrong its just I don't trust them... The one point I disagree with is on valuations of "Cobalt companies". KAT's a copper miner. In fact, with its soon to be steady-state annual Cu production, it really should be valued as a top 20 mid-tier producer. All the rest is gravy.

[Cassius1977]

Cobalt is a byproduct of another primary element in all mines.  For all intents and purposes a stricktly cobalt mine does not exsist.  That does not change the fact that cobalt makes up a significant revenue stream for those whose ore is relatively high in cobalt.      You may think that KAT is a copper company but this stock spiked and cratered on the cobalt buzz rising

[Lech1988]

Agreed, without the Cobalt KAT is not structurally profitable at the moment unless Copper prices skyrocket.  The market views this as a Cobalt mine (especially given it is the largest Cobalt mine in the world it’s hard for investors to divorce themselves of this thinking...understandably) and most Cobalt stock are still in the doghouse. Its obvious that some people on this board are

[bigguy56]

I appreciate your frank analysis... tell me, what do you thik the stock price will do then? Under a worst case scenario. I have been waiting for a "bottom" but I have found in investing that that is a false bottom. There may be no bottom. One has to look at the numbers with a critical eye. So I did. I have grown more discerning here in investing as time goes on. One of the things I have

[Lech1988]

I meant this year it is not profitable with Copper alone given capital spending requirements (cobalt project, acid plant, etc) hence why management said without the cobalt they expect up to $500m cash shortfall.  Whether KAT can be cashflow positive without Cobalt in the future remains to be seen and is dependent on future capital spending requirements and the price of Copper.  What is

[bigguy56]

capital spending and Revenue/ CGS are 2 different things. Having said that, I looked at the cash Flow Statement and Income Statements quickly and the forecast the future is very difficult. Capital spending would result in a line item for Interest costs on borrowed capital that would go against revenue. Bottom line, Glencore is investing in this mine against a difficult regime (DRC/ Gecamines

[patels96]

@bigguy56, COGS Inlcudes: Direct Costs (Mining/Transportation, Processing/Refining, & Royalties) Depreciation is includes in COGS...remember KAT uses UOP (Unit of Production Method) COGS also includes adjustments for Provisional Pricing...aka any changes in the price of Copper or Cobalt is reflected here In Q4 2018, Revenues were low due to declining prices of the commodities

[bigguy56]

Copper pricing has improved since Q4 based on the Copper Chart. COGS was really high... so if Q4 is representative, then maybe they are structurally unable to make money. But, I would expect revenues to improve next quarter. I thought also that they were in an investment mode in order to build plant capacity? Will that make a difference?

[patels96]

@bigguy56, Remember they commissioned the second train of the WOL in December, so they had to allocate additional capitalized expenses as depreciation in Q42018. You have to remember that when, KAT went offline in Sept 2015, the upgrades that happend to the facilities the costs of that was capitalized on the balance sheet. When KAT went into production, they had to increase capacity from Q1 to

[Sogosohubidu201]

Cost of Sales is high in 2019 because the production process has not yet been optimized, higher energy cost, higher reagent costs, higher transportation costs, provisions and infrastructure upgrade etc. Yes, these will make the company unprofitable with copper sale alone.  But after the completion of cobalt project, acid project and hydro project by the end of this year, the cost of sales

[Sogosohubidu201]

But the company needs cobalt sale to generate great earning and free cash flow numbers.  At $7,000 per tonne of copper and $40,000 per tonne of cobalt (reasonable prices to be assumed from next year) as well as 285k tonnes of copper and 40k tonnes of cobalt sale annually, my earning estimate is about 56 cents per share and free cashflow 61 cents per share with cash yield of 127% comparing to