Katanga Mining announces 2014 first quarter results and election of directors

ZUG, Switzerland, May 15, 2014 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announces its financial results for the first quarter of 2014. Katanga's Financial Statements and Management's Discussion and Analysis will be filed on SEDAR, www.sedar.com.

Highlights during the three months ended March 31, 2014, and Outlook

Mining

As announced previously by Katanga:

• During the three months ended March 31, 2014 ("Q1 2014"), the Company mined 1,330,891 tonnes of ore, a 20% increase over the three months ended March 31, 2013 ("Q1 2013"), at a grade of 4.03% resulting in contained copper in ore mined of 53,636 tonnes.
• Ore mined at KOV Open Pit during Q1 2014 was 849,852 tonnes, a 20% increase over Q1 2013.  The average copper grade of ore mined from KOV Open Pit during Q1 2014 was 4.43%, resulting in contained copper in ore mined of 37,630 tonnes.  Waste mined at KOV Open Pit during Q1 2014 was 5,989,576 tonnes, an 8% increase over Q1 2013.
• Ore mined at KTO Underground Mine during Q1 2014 was 447,401 tonnes, an 11% increase over Q1 2013.  The average copper grade of ore mined from KTO Underground Mine during Q1 2014 was 3.41%, resulting in contained copper in ore mined of 15,274 tonnes.
• At T17 Open Pit, during Q1, 2014, 30,362 tonnes of waste and 33,638 tonnes of ore were mined at an average copper grade of 2.17%.  This cleared volume facilitates ongoing infrastructure works which commenced in Q1 2014, related to the T17 underground mine.
• In Q1 2014, the Company commissioned:
  • Three new waste trucks at KTO with this equipment expected to accelerate development, whilst reducing contractor dependency and overall haulage and backfill costs.
  • Two new loaders and 1 large and 1 small drill rig at KOV, to increase total tonnages and reduce contractor dependency respectively.
• In Q1 2014, commissioning commenced on the KOV in-pit crusher which is expected to reduce ore re-handling time and cost.

Processing

As announced previously by Katanga:

• Ore milled at the Kamoto Concentrator ("KTC") during Q1 2014 was a record 1,514,216 tonnes, a 21% increase over Q1 2013.
• 160,987 tonnes of concentrate (10% higher than Q1 2013) containing 36,315 tonnes of copper (7% higher than Q1 2013) were produced.
• Copper produced for Q1 2014 totalled 31,574 tonnes, a 10% increase over Q1 2013.
• Cobalt produced totalled 478 tonnes for Q1 2014, a 44% increase over Q1 2013.

Projects

• Katanga has decided to develop the T17 underground mine which is expected to commence production in late 2014. Glencore Xstrata has indicated it will provide or procure the additional funding required, if any, for the completion of the T17 underground mine.
• As announced previously, Phase 5, which includes EW3 (2 x 30,000 tpa capacity EW tankhouse units) and CM5 (mill of 11,700 tonnes per day nameplate capacity), continued to progress according to expectation with $86.7 million spent to date.  During Q1 2014, for CM5, the design for the stockpile, feed conveyor and mill were completed, the stockpile civil construction commenced and delivery was taken of the shell.  For EW3, the overall engineering is largely complete and construction is progressing. 

Financial

• Total sales for Q1 2014 were $209.8 million, a 12% increase over Q1 2013.
• The realised copper price for 2014 was $2.96/lb, an 11% decrease over Q1 2013, while the realised cobalt price was $11.89/lb, a 22% increase over Q1 2013.
• For Q1 2014, the Company earned a net income attributable to shareholders of $36.4 million, an increase of $6.3 million from Q1 2013.
• Cash and cash equivalents as at March 31, 2014, amounted to $13.9 million (December 31, 2013 - $25.7 million).

Outlook

As announced previously by Katanga:

• As part of the Updated Phase 4 Expansion Project, the final train of the Solvent Extraction ("SX") plant increasing SX plant capacity to 300,000 tonnes per annum ("tpa") of copper transfer is expected to be commissioned during Q2 2014.  Total expected project cost remains $769 million as previously announced.
• Construction on Phase 5 is expected to be completed during Q4 2014.
• During Q2 and Q3 2014, 4 new 793 haul trucks are expected to be commissioned at KOV to increase capacity for additional total tonnes and reduce contractor dependency.
• With modifications to the flotation section at KTC being completed, a significant ramp up in production is expected in Q2 2014.
• Operational ramp up is expected to continue with the completion of the Updated Phase 4 Expansion Project commissioning, completion of the Phase 5 project, identified operational improvements and additional steps to mitigate ongoing power issues including increasing back-up generator capacity through the installation of a 10 megawatt diesel co-generation plant.

Election of Directors

Katanga is pleased to announce that the nominees listed in the management proxy circular for the 2014 Annual Meeting of Shareholders were elected as directors of Katanga. Detailed results of the vote for the election of directors held at the Annual Meeting of Shareholders on May 14, 2014 in Toronto are set out below.

This press release was prepared under the supervision of Tim Henderson, Technical Consultant, Katanga and a "qualified person" as such term is defined in NI 43-101. Mr. Henderson has reviewed and approved the contents of this press release.

About Katanga Mining Limited
Katanga Mining Limited operates a major mine complex in the Democratic Republic of Congo producing refined copper and cobalt. The Company has the potential to become Africa's largest copper producer and the world's largest cobalt producer. Katanga is listed on the Toronto Stock Exchange under the symbol KAT.

Forward Looking Statements
This press release may contain forward-looking statements, including, but not limited to,  the potential for an underground mine at T17 Open Pit, the completion of the Updated Phase 4 Expansion Project and the Phase 5 project, the expected commissioning of 4 new 793 haul trucks, the increase in production associated with the modifications to the KTC floatation section, the expectation that improvements at KOV will increase tonnage, reduce contractor dependency and reduce ore handling time and cost, the expectation that commissioning of new waste trucks at KTO will accelerate development, reduce contractor dependency and overall haulage and backfill costs, and the increase of back-up generator capacity. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

All forward-looking statements reflect the Company's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. All of the Company's forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions listed below. Although the Company believes that these assumptions are reasonable, this list is not exhaustive of factors that may affect any of the forward-looking statements. The key assumptions that have been made in connection with the forward-looking statements include: there being no significant disruptions affecting the operations of the Company whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; permitting and development, being consistent with the Company's current expectations; continued recognition of the Company's mining concessions and other assets, rights, titles and interests in the Democratic Republic of Congo ("DRC"); political and legal developments in the DRC being consistent with its current expectations; new equipment performs to expectations, the continued provision or procurement of additional funding from Glencore Xstrata for the completion of the Phase 5 Project; prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; labour and material costs increasing on a basis consistent with the Company's current expectations; and all necessary equipment and parts will be delivered and installed on schedule for Phase 5.

Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the actual results of current exploration activities; actual results and interpretation of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of copper and cobalt; possible variations in ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, development or construction activities, delays due to strikes or other work stoppage, both internal and external to the Company, as well as those factors disclosed in the Company's current annual information form and other publicly filed documents. Although Katanga has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise, except in accordance with applicable securities laws.

SOURCE Katanga Mining Limited