Katanga Mining Ltd Ord KATFF

Glencore's Comments on Katanga

[Lech1988]

Glencore's earnings call states that once Katanga gets to steady state it will be making $1.3 billion EBITDA (1.73 billion CAD)

Do the math where the stock should be trading

[Lech1988]

Glencore also admits that stopping production at Mutanda will cause a deficit in the Cobalt market. In my opinion the earnings call was very positive for KAT as its clear they view it as the jewel of their African assets and are under enormous pressure to get it right.

[JanineK22399HH]

Bloomberg:  '“This should lift sentiment in the global cobalt market,” Daniel Chen, analyst at CRU Group said by phone from Guiyang in southern China. “Previously, consensus was that cobalt would be very oversupplied for two or even three years ahead, but now the market will pay more attention to risks in the DRC, and risks on the supply side.” “Chinese producers are likely to gain

[Lech1988]

Glencore has a history of doing this, they are not afraid to yank production from the market to boost prices.  Its clear they are absolutely determined to get KAT up and running quickly as it really is the jewel in their African portfolio and it is obvious from their earnings call today they are under HUGE pressure from investors and analysts to turn their African operations around.  

[topdop]

Thanks for the updates @Lech1988. Cobalt is already reacting: today's LME 3m is US$28,300/t vs US$26,000/t yesterday after GLEN putting Mutanda into temporary care & maintenance (year end). Given that and with Glasenberg's significant validation of expected EBITDA from KAT once at steady state, expect KAT shares to scoot rapidly back to ~70c. These are my views only. Thanks for

[MrIceman]

Indeed. KAT should rather be up 10 % today, not down. It should be trading at around CAD 0.70, not at 0.35. Too bad I'm all in. No cash around to buy more shares.

[InternalAudit68]

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[patels96]

Hi Lech1988 Do you have the link to glencore's earnings call? Thanks,

[Sogosohubidu201]

https://www.glencore.com/investors/half-year-results-2019

[Sogosohubidu201]

https://www.glencore.com/dam/jcr:5d834b73-1206-4279-816e-68545340cde4/20190807-GLEN-2019-Half-Year-Results-presentation.pdf

[MrIceman]

Yes, KAT is a CAD 2 stock all day long, and by 2021 the stock should be trading around CAD 10. These are very conservative figures.

[Lech1988]

Also worth noting that is with Glencore’s assumption of 6500 for copper and about 30,000 for cobalt.  I would say the copper assumption is about right but putting Mutanda on maintenance can have a dramatic impact on cobalt market sentiment and result in much much higher prices.  Remember this is 27kt of clean cobalt being taken out of the market, I.e. the stuff western car companies can