Katanga Mining Ltd Ord KATFF

One Time Expenses on Q2 Results

[Sogosohubidu201]

All these one time expenses had been used in Q2 results:

Stamp duties: $56 millions - from KCC recap
Waiver of reimbursement of exploration and drilling expenditures: $57 millions - from KCC recap
Restructuring expense: $248 million - KCC recap
Extra Facilities Interest: about $42 millions ($146 - $103 = $43m)
Total: $403 millions

It appears that all one time expenses had been used in Q2. Interest expense is about $429 millions or slightly lower annually or $107 millions quarterly.  Loan facilities debt is due 2021.  With one time expenses gone, KAT should show earning from Q3 2018.

[Katanga68]

I don't think the extra Interest costs which they called new facilities interest expense are one time. I think the new reality is that Katanga has $150mil/quarter interest expense? Pleas tell me I am wrong because I don't like how high that is!

[Sogosohubidu201]

The interest charge going forward for KAT will be $429 millions annually or $107 millions quarterly. The difference between the higher interest of $146 millions in Q2 than previous quarters interest charge of around $103 millions is actually one time event.  It appears that Glencore had re-categorized $2.4 billions customer pre-payment that carried low interest rate of 2-3% in Q2 to long

[Katanga68]

Are you sure its one time. I read it as the new debt transferred from the re-cap of KCC to Kat ?

[Sogosohubidu201]

Yes, absolutely.  After settlement with Gecamines, KAT owed Glencore the following long term debts and interest rates: Facility A - $3.688 billions, 7% interest, due 2021 Facility B - $2.239 billions, LIBOR + 3% or 6% interest, due 2021 Facility C - $450 millions, LIBOR + 3% or 6% interest, due 2021 The current 10 years LIBOR is around 2,8%. Now you should be able to easlily calculate the

[Katanga68]

Got it thank you for your help! I feel better now.