Katanga Mining Ltd Ord KATFF

Glencore 2019 Half-Year Report - KAT Related

[Sogosohubidu201]

https://www.glencore.com/dam/jcr:9a598e35-657b-4489-a445-dc221706c20d/GLEN_2019-HY_ProductionReport.pdf

Glencore Chief Executive Officer, Ivan Glasenberg: “....... However, our African copper business did not meet expected operational performance. We have moved to address the challenges at Katanga with several management changes as well as overseeing a detailed operational review, targeting multiple improvements to achieve consistent, cost-efficient production at design capacity.

.......Our African copper assets retain significant potential and will play a key role in the transition to a low carbon economy. We have developed detailed turnaround plans and I look forward to taking you through these plans along with our financial performance on 7 August.”

[Sogosohubidu201]

Page 17 of Glencore 2019 Half-Year Report: ......."On 30 April 2019, Katanga announced that a full and comprehensive business review (the “Review”) had commenced, targeting mining efficiencies and process recovery improvements, as well as enhancements to product quality realisations and overhead reductions. At the same time, Katanga noted that it expected that 2019 production of copper and

[Lech1988]

  We knew they were going to lower guidance this year and its not all that surprising.  Cobalt prices are still in the toilet and they have inventory they can't offload and are sitting on a large paper loss.   In my opinion we have a bit of a balancing act here between Glencore not wanting to flood the market with Cobalt (and in my opinion purposely delaying rectifying the

[MrIceman]

It seems like KAT is little bit of a pain in the *** for Glencore, so why not sell the troubled asset to Chinese? I have a feeling Chinese always are looking to strenghten their world domination in base metals. Why wouldn't they like to own two largest Cobalt mines in the world? China Moly already owns the majority of the #2 mine. It would be intresting to see Glencore sell their stake in KAT

[bigguy56]

I posted some time back that I thought that the end-game for Glencore might e to sell KAT as when the capital investments are complete it will be a known quantity and worth something. But I do not believe the valuations that are posted here... $2.00 a share?? Given their debt load and the uncertainty around copper and cobalt pricing it is likely impossible to properly valuate the stock. I think

[Lech1988]

Goldman valued KAT at something like $17 billion including sunk costs.  And we were trading at $2.50 CAD 18 months ago... wow do poeple have a short memory.

[johnny54]

Was kat at its peak when cobalt was also peaking?or what is the timing difference? Was that what drove the price or was it the ramp up numbers? And then the negative news came abojt and caused sp drop and it really hasn’t stopped? Basically what was the sp when cobalt hit its peak? also I think it’s a positive Glencore sp is starting to suffer, now they are really going to have to take action and

[Sogosohubidu201]

That is right @lech. The company (KAT) is trading at 3.24% x Goldman estimated Net Present Value per share of $11.88 (which is probably the lowest among mining companies already in production), which I believe provides huge upside in the event of major projects completion and company de-risking event with long term of 300 k tonnes of copper and 30-35k tonnes of cobalt per year. The ratio of

[Sogosohubidu201]

$11.88 Canadian dollars per share NPV vs the current $0.385 Canadian share price, I should say.

[MrIceman]

Exactly. KAT should be trading at significantly higher price right now. Based on the reserves, grade and scale of Copper, KAT truly is one of the best mines in the world. Currently, KAT's share price doesn't reflect that at all. Hopefully in 5-10 years from now buying loads of KAT in 2019 will seem like a good move. I can only wish.

[Sogosohubidu201]

The ratio of copper and cobalt reserve value over the market cap. is also probably the Highest among the mining companies. typing error.

[johnny54]

So the attempt to explain SP wtf is going on?

[Sogosohubidu201]

@johnny, let us wait for the company review and projections for copper and cobalt volumes the remaining of this year and next year before doing speculation regarding share price.  Q2 production report was not positive, so we did not have a share price break out above 200 DMA.  It will not come for a while, I think. On the other hand, we did not have massive selling with big volume either

[topdop]

...to everyone that thinks GLEN is selling, look at this: https://kbjr6.com/news/top-stories/2019/07/31/polymet-announces-new-departing-board-members/ It details the same individual who just joined KAT's board being placed into Polymet's and it details how GLEN is now (following a hugely dilutive Rights Issue at T:POM) a 72% shareholder. This is exactly how GLEN ended up at +86% holders of

[topdop]

...oh, and we should also expect markedly reduced Metal Production Guidance going fwd.

[Lech1988]

I agree about the reduced guidance, but at the same time Glencore shareholders will get fed up with these assets - cash flow negative mine with reduced production guidance in the world's riskiest mining jurisdiction isn't exactly appealing to Glenore's shareholders (or KAT shareholders for that matter).  The reason you risk mining in the DRC is due to the quality of the resource

[Sogosohubidu201]

@topdop. I agree with you completely.