Katanga Mining Ltd Ord KATFF

Key Points takeaway

[topdop]

My key takeaways: there are two:

I've been writing about having patience for as long as I've owned this stock.

Now the company has confirmed exactly the same thing by publishing a new 36 month turnaround plan with targets.

I suggest these are realistic, achievable and VERY ATTRACTIVE... but require (further) patience. KAT said:

"These improvements are expected to materially increase the cash flow generation of KCC from 2022, when it is projected to achieve targeted life of mine average production of approximately 300kt of copper and 30kt of cobalt, resulting in a steady state copper unit cash cost of $1.65/lb, before cobalt by-product credits, and $0.75/lb after cobalt by-products revenue, net of allocable cobalt direct production and realization/selling costs of c$0.60/lb * "

* Note: KAT's "Realization Costs" are based on an assumed Cu price of $6,500/t & realized Co price of $15/lb (both conservative in my view).

Secondly, there will be no Ion Exchange Circuit. I've been calling this "smoke and mirrors" for over a year. Like it or not, it should really now be viewed as a (shady) move that (effectively) helped control the Co commodity price; simple as that. With 97% of their product complying with all local & export market requirements presently, no BoD in their right mind would approve spending +US$250MM to garner the last ~ two to three percentage points (if that) ~ of Co production. Maybe at $65k/t it will get built? Not now and not soon. kAT said:

"An aggregate of 97% of the cobalt hydroxide produced in Q3 2019 (97% in Q2 2019) complied with international transport regulations and was also below the acceptable limit of contained uranium allowed for export through main African ports."

These are my views only. Thanks for reading.