Shares of Katanga Mining Limited (TSX:KAT) have soared more than 65% after the Company announced the restarting of its copper and cobalt facility in Congo
SmallCapPower | December 13, 2017: Katanga Mining Limited (TSX:KAT), a subsidiary of Anglo–Swiss mining giant Glencore Plc (LON:GLEN), surged more than 65% during the past three trading sessions, to its current price of $1.87, after the Company announced Monday the restarting of its copper and cobalt facility in Lualaba Province, Congo. Operated by its subsidiary, Kamoto Copper Company (KCC), mining at the site was suspended in September 2015, for the construction of the whole ore leach (WOL) processing facility. Katanga Mining announced successful hot commissioning of the core of the first train of its new WOL facility and produced its first copper cathode on Monday.
The first train is expected to be ramped up to full production by 1Q18, while hot commissioning of the second train is expected to commence in H218. Katanga Mining also announced approval of US$15.8 million capital expenditures by the board for the construction of an upgraded cobalt processing plant and a sulphuric acid production plant at KCC. Additionally, the Company announced a US$49 million capex for cobalt product dryers as part of the cobalt production circuit and US$237 million over 2018 and 2019 to construct a Sulphuric Acid and Sulphur Dioxide production plant (hot commissioning in H219) that will improve the reliability of the supply of these reagents to the WOL processing circuit.
Once the second train of the WOL plant and the Cobalt Debottlenecking Project are complete, Katanga Mining anticipates cobalt production of 11,000 tons in 2018, 34,000 tons in 2019 and 32,000 tons in 2020, which will make the mine the world’s largest.
Johnny Blizzard, CEO of Katanga Mining, said “We are very pleased to have met our anticipated budget and timetable for commissioning the first train of our new plant and are optimistic that the tangible improvements from using a whole ore leach processing circuit will be seen in the near future. We look forward to ramping up to full production capacity of the first train. The construction of the second train of the WOL plant is also on schedule and budget and hot commissioning is still expected to commence in H2 2018.”
Holding the world’s largest cobalt reserves of 1.3 billion lbs, Katanga Mining continues to ride the strong upsurge in cobalt prices over the past two years. While the cobalt price has zoomed three-fold over the same period reaching nearly US$34/lb, the share price of Katanga Mining has skyrocketed more than 10 times to reach $1.87.
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in the company mentioned above.
To read our full disclosure, please click on the button below:
