Katanga Mining Ltd Ord KATFF

1Q19 Results

[Lech1988]

Any thoughts? Actual numbers were not all that surprising. 

Concern now (and there is always a concern with this thing) is that Glencore has formed a committee with Katanga addressing its debt load, interest owed (circa $500m), and repayment schedule.  The FT has an article about this that suggests a debt for equity swap is likely before the debt is due in 2021.  If that happens given the size of the debt and current share price we would all likely be completely wiped out.  Other option is of course to roll the loans, but the thought that a debt for equity swap is even on the cards is really bad.

[bobsacramento]

FT has been notoriously wrong before, especially when they quote analysts as their source without further naming their sources. They botched the KCC recapitalization deal, and I wouldn’t make investment decisions based on their flawed analysis.

[stockhunter20001]

FT??

[FreeRa0603]

Financial Times (FT) here is the article Glencore seeks to address Katanga debt woes https://www.ft.com/content/65de5b8a-77cd-11e9-bbad-7c18c0ea0201

[bigguy56]

the link requires a signon to the publication

[bigguy56]

can someone C&P it. I agree wih the observation about the unreliability of FT. I remember it last summer with their misinterpretation of the deal that was announced in the spring.

[FreeRa0603]

Glencore is working on a deal to address the heavy debt load of Katanga Mining, the beleaguered Canadian-listed company that controls one of its most important assets. Glencore owns 86 per cent of Katanga Mining, which in turn controls the Kamoto Copper Company (KCC), one of Africa’s biggest copper producers and a key global supplier of cobalt. Katanga has been a near constant source of headaches

[Sogosohubidu201]

Nothing is surprised about Q1 Financial Report. I knew that it was going to be weak: a loss of 9 cents per share, slightly better than the previous Q; operating cash flow of about $27 millions, but if working capital difference was included it was neutral; outside cash required was in capital investment, about $170 millions. From Q2 it is probably the beginning of the turning point of KAT

[Sogosohubidu201]

Capital expenditures were $170 millions for Q1 2019. Last Q (Q4 2018) capital expenditures were $166 millions. KAT is at peak range of capital expenditures. Capital expenditures should be reduced to around $50 millions per Q starting from Q1 next year per information in March 2018 technical report. 

[Sogosohubidu201]

Those large capital expenditures last two quarters and next two quarters were and are used to finally complete the major projects by the end of this year: i.e. cobalt debottle neck project, acid plant, Ion Exchange plant and the last part of hydro project. All these are aim for increasing production efficiency, reducing operating costs and removal of uranium residue in cobalt hydroxide. After the

[bigguy56]

I don't mean to be condescending, but there is a big difference etween a Sustainable Expenditure and a Sustaining Expenditure. The common term is Sustaining. Not sure if you know that, You probably do, but for the sake of the readers it can easily be misunderstood. Someone may take it to mean Sustainable = what they can afford or something. Sustaining means capital necessary to Sustain current

[Sogosohubidu201]

Thanks @bigbuy for your clarification. I definitely meant capital necessary to Sustain current levels of Production there