Katanga Mining Ltd Ord KATFF

No, I don't believe its "Strategic"...

[topdop]

Well, don't say I didn't warn you. On the 1st March, I wrote Note a very contrarian trade in KAT today. Something is up.

That day I concluded, ... I'm certain something (-ve) is in the wings.

Well, last night KAT announced what had been happening. Their CEO had resigned and they had been racing to stem the leaks and replace him, seemingly, in an orderly manner.

Seventeen days later, we get this:

https://af.reuters.com/article/investingNews/idAFKCN1RU0W4-OZABS

And no attempt to state why this is really happening and where, exactly, Callow is going. No wishing him well either.

This is pitiful. We just lost our new CEO and I want to know why.

Why would a very experienced African operator, appointed only recently on 18th January 2019, suddenly resign so soon into his new role?

Note Danny Callow, a highly experienced mining grad from my Alma Mater, had up until his KAT appointment, spent 12 years inside Glencore in various increasingly senior operational and executive roles, finally as the Head of Africa Copper Operations of Glencore International, a position he had held for 3 tumultuous years prior to being seconded to run KAT.

Now we get a coal guy with no DRC experience? This does not add up.

Ive long been suggesting that the Ion Exchange Circuit will never be built. I think our ex-CEO agrees with me and he just built our WOL circuits/trains: he would know.

So I speculate Callow resigned because he felt uncomfortable continuing the alleged Glencore radiometric cobalt ruse; my words used to describe, allegedly, a Glencore imposed market volume control (thus pricing control) ploy, whereby exports of Co(OH)2 were suddenly found to have been radiometric beyond acceptable export thresholds, thereafter seeing all KAT exports halted.

On 2nd March I wrote: GLEN has also stated it has "been working on various alternative interim solutions, both operational and regulatory, to recommence the export and sale of cobalt and KAT's disclosures tell us that "On January 30, 2019, 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 (namely tthe ION Exchange Circuit) and requested KCC to 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.

This is important. It means Kinshasa doesn't believe the alleged radiometric cobalt ruse either.

Now let's not also forget all the recent big fines! Canada's stock market regulator, the OSC, sanctioned KAT and former Directors and Executives heavily on 18th December 2018.

In that light, if you know something, how exactly can you continue in your executive role? It would carry too much personal risk.

Callow's appointment came as part of that OSC sanction, replacing the fired, and personally fined Johnny Blizzard a month later.

To remind you, the OSC said the sanctions were punishment ...in response to false accounting from Katanga and Glencore directors on its board participated in instructing management" to report output at a certain level, reporting that subsequently proved false and required restatement:

https://www.biznews.com/global-investing/2018/12/19/banned-board-glencore-boss-cooking-books

These were the unprecedented OSC sanctions: 1: Gallagher: personally fined a $950,000 penalty and given a six-year ban; 2. Tim Henderson: personally fined a $450,000 penalty and given a three-year ban; 3. CEO, Johnny Blizzard: personally fined a $400,000 penalty and two-year ban with minor exceptions as well, required to resign CEO position within 30 days; 4. Former CFO Jacques Lubbe personally fined a $550,000 penalty and a four-year ban; 5. Matthew Colwill got a $350,000 penalty and a two-year ban; 6. Jeffrey Best got a $750,000 penalty and a four-year ban; and 7. Aristotle Mistakidis, Glencore's billionaire Head of Copper trading made to retire and hit with a $2.45 million fine and a four-year director ban; and 8. KAT (us shareholders) fined a penalty of $28.5 million with costs of $1.5 million.

So I ask again, how many more shoes have drop with this company?

Yes, the assets are exceptional - and the promise is tantalizing - but the continued vacuum of leadership and paucity of confident, clear corporate direction; the pitiful, woeful, minimalist disclosures, written by people who have no idea what they are doing; the missteps, the abject lack of clever, publicly stated strategy and promotion, as well as the horrible big +86% shareholder "blocker" that frankly, probably doesn't give a hoot about us minority shareholders ARE ALL CONSPIRING TO HARM AND HINDER KAT CAPABILITIES IN ATTRACTING BUY SIDE & SELL SIDE INTEREST.

These are my views only. Thanks for reading.

[Lech1988]

I'm curious what are the legal implications if there isn't actually a radiation issue with the Cobalt?  False disclosures to the market? Failure to comply with the off-take agreement?  Where do you think this ends?  They can't keep up the supposed ruse forever.  After a point they have to admit the ION Exchange circuit won't ever get built.  If they

[Sogosohubidu201]

From Glencore conference call and information from DRC, I think that the Ion Exchnage Plant will get build. Think about this, If Glencore faked this high level of uranium in cobalt product produced, Gecamines would not agree with this after they had audited Katanga Mining production. After all Gecamines owns 25% KCC.  Why not limit the Mutanda cobalt export, of which Glencore owns 100

[MalayalamFTW]

Nice conspiracy theory, but that would be the most stupid thing to do for Glencore. KAT is big but not the only asset for Glencore to produce revenues. After all these legal issues it is VERY UNLIKELY they would take risk to lose the complete multi-billion asset to Congo. According to the production numbers they are on target to produce 15kt of cobalt this year, which is not that much at this

[topdop]

It's very easy for KAT to produce radiometric cobalt concentrate. They know where the uraninite ore occurs in the greater copper & cobalt orebodies and can raise or lower that ore content as they need in the process plant feed. And the opposite applies too. No, the conc is not harmful, as in **radioactive** but regardless, the Smelters won't take the product and its not legal anyway

[topdop]

@MalayalamFTW are you really so sure about that? https://www.marketwatch.com/story/glencore-says-cftc-is-investigating-company-over-corrupt-practices-in-connection-with-commodities-2019-04-25 In my experience, generally, there's no smoke without a fire. Glencore's got the US Justice Dept. on it's case and now this. Stranger things have happened in the world of business... to control

[bigguy56]

Good post, Topdop. You seem to have changed your tune since we last spoke on the matter of the ion exchange plant. I remeber when I posted my skepticism and you chided me for it.  Whatever happened with the Supply Chain Audit that DRC/ Gecamines was supposed to conduct? At the time my opinion was that the radiation was not coming from the ground, but perhaps from another aspect of the Supply

[Lech1988]

One thing that must be kept in mind here is that this supposed radiation export ban isn't sustainable long term (or even medium term).  Right now the market could feasibly blame this solely on Katanga, but if we have further delays on clarity regarding the Ion Exchange system or if the end solution is just ore blending (which is likely the case) nevertheless it becomes embarrassing for

[topdop]

Hi again @bigguy56 perhaps on reflection and subsequent to a deep-dive re-read, you might never have called me a "pumper" as, commencing on my Seeking Alpha KAT Blog way back (+2.5 years ago now), I've written, consistently, in scathing terms wrt KAT's woeful "timely disclosures" & it's bun fight with the Independent Directors that ended with an era record OSC

[bigguy56]

I should apologize for characterizing you as a "Pumper". At the time I was searching for a better phrasing, just never arrived at it. Should have controlled myself. Anyway, apologies. I do appreciate the depth and wisdom in your posts.