Katanga Mining Ltd Ord KATFF

Dig a Bit Deeper into the PR and...

[topdop]

Further Thoughts regarding KCC and Monday's KAT Press Release: From where we stand today, the wall of free cash flow that KAT will be hit with by the end of 2019 - if all goes well - will be significant, in my opinion. At that point, there won't be any escaping rich(er) valuations. And who knows where Co will be at that point? +$100k/t? In KAT's PR 2 days ago, the Company also announced the engineering and construction of "an upgraded cobalt processing plant (the cobalt debottlenecking project) and a sulphuric acid production plant at KCC." "The board approved $237-million (U.S.) in capital expenditure spread over 2018 and 2019 to construct a sulphuric acid and sulphur dioxide production plant at KCC. This will improve the reliability of the supply of these reagents to the WOL processing circuit. The acid plant is designed to produce 1,900 tonnes per day of sulphuric acid, 200 tonnes per day of suphur dioxide and 17 megawatts of cogenerated power. This will reduce KCC's reliance on imported volumes of reagents brought to the mine through various international borders. The internal rate of return (IRR) for the sulphuric acid and sulphur dioxide production plant project is expected to be approximately 60 per cent. The hot commissioning of this plant is expected to commence in the second half of 2019." With the PR mainly taken to announce WoL matters, the above seems to have escaped our attention. It shouldn't. Its very significant. We must understand how expensive it is to get those huge yellow piles of Sulphur that you can see sitting at the dock in North Vancouver, all the way to Central Africa to make H2SO4. Reagent costs are a significant Production Cost in producing copper (and cobalt) and the announcement to build the above will only make the WoL and metals production for KCC much, much more efficient. I haven't seen any info shared yet about anticipated C1 Production Costs for Cu & Co (by the end of 2019); those would be extremely insightful numbers... These are my views only. Thanks for reading.