Katanga Mining Announces 2015 Year End and Fourth Quarter Production Results

ZUG, SWITZERLAND, Feb. 10, 2016 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announces 2015 year end and fourth quarter production results.

Highlights during the year ended December 31, 2015

Review of 2015 Fourth Quarter Results

Suspension of production

• On September 11, 2015, the Company announced the decision to suspend the processing of copper and cobalt during the construction phase of the Whole Ore Leach Project ("WOL Project"). This suspension is expected to last up to 18 months from September 2015.
• Mining operations continued at KOV Open Pit and Mashamba East with a focus on waste mining.
• The shutdown of the plant was achieved in September and the majority of the planned employee redundancies were finalized during Q4 2015. The Company aimed to minimize the impact of the suspension on its employees and achieved its headcount reductions through voluntary redundancy programs.

Mining

• Waste mined in Q4 2015 was 22.9% higher than in Q4 2014 due to the commissioning of new mining fleet and increased mining equipment productivities
• Waste mined in Q4 2015 was 27.0% lower than in Q3 2015 due to the revised waste mining plan in the open pits which was put in place following the suspension of copper and cobalt processing.  The revised waste mining plan aims to secure sufficient ore availability for processing once the suspension of copper and cobalt processing ends, while minimising costs during the suspension period. 
• Ore mined in Q4 2015 was 84.8% lower than in Q3 2015 and 85.2% lower than in Q4 2014 due to the suspension of ore mining underground and the shift in focus towards waste mining in the open pits following the suspension of copper and cobalt processing at the end of Q3.
• Q4 2015 contained copper decreased by 88.3% over Q4 2014 and 88.0% over Q3 2015 due to the reduced volumes of ore mined.

Processing

• Due to plant shutdown, there was no ore milled at KTC and no copper metal, concentrates or cobalt metal produced in Q4 2015. 
• During Q4 2015 work continued on the WOL Project:
  • Detailed engineering design continued on the Pre Leach, Leach and Post Leach circuits and satisfactory progress was made on the earth works and civil works;
  • Related capital expenditures amounted to $36.2 million in Q4 2015, which principally related to  site excavation, civil work and prepayments for various long lead time items; and
  • Concurrent with the construction of the WOL Project plant and infrastructure, the current Life of Mine Plan is being optimized to ensure that the appropriate ore blend will be supplied to the WOL process when complete in order to maximize copper and cobalt recovery and to minimize operating cost per unit.

Review of 2015 Full Year Results

Mining

• Waste mined in 2015 was 23.9% higher than in 2014 due to the commissioning of new mining fleet and increased mining equipment productivities. 
• Ore mined in 2015 was 18.9% lower than in 2014 due to the suspension of ore mining underground and the shift in focus towards waste mining in the open pits following the suspension of copper and cobalt processing at the end of Q3.
• Contained copper in ore mined in 2015 was 22.6% lower than in 2014 due to the reduced volumes of ore mined.
• In 2015, the Company commissioned:
  • One fire detection system and fire suppression system on shaft 1 at KTO;
  • One new Caterpillar 6030 Backhoe Excavator in KOV to facilitate increased ore and waste mining capacity and improve dewatering management;
  • Two Caterpillar R2900G loaders in KTO to increase the ore and waste handling capacity;
  • One lube truck and six Atlas Copco 282 Jumbos for use underground;
  • Two Caterpillar D11 dozers, one Caterpillar 834K dozer and one Caterpillar 24M grader to optimize mined waste management;
  • Five new Caterpillar 793D haul trucks operating in KOV to increase ore and waste mining capacity; and
  • One Caterpillar AD45B haul truck operating in KTO to facilitate increased ore and waste mining capacity.

Processing

• Ore milled at KTC during 2015 was 13.5% lower than 2014 due to the suspension of copper and cobalt processing at the end of Q3, offset by increased volumes milled at CM5.
• Finished copper metal and concentrate produced decreased by 28.1% compared to 2014 due to the suspension of copper and cobalt processing at the end of Q3.
• Cobalt metal produced in 2015 was 4.2% higher than in 2014 (despite the suspension of copper and cobalt processing in September 2015) primarily due to efforts to increase bleed flow to PPS and extension plants, and resolution of lime blockages and density control.
• In 2015, the Company commissioned the following assets at KTC and Luilu in order to improve throughputs and recoveries:
  • Conveyor system T29 at KTC;
  • Upgrade of Wemco cells and reagent addition system (Tank Cells) at KTC to improve oxide concentrate recoveries and grades;
  • Upgrade of Spray Bars (Tank Cells) at KTC to improve recoveries by breaking the froth and increasing the velocity of concentrate throughput to transfer tank;
  • Improvements to the froth skimmers in the KTC oxide flotation section which improved  mass-pull in the Wemco cells;
  • Upgrade of cleaner bank cells in the oxide flotation section to improve oxide concentrate grades;
  • Upgrade of 20m3 tank cells in the old re-cleaner circuit with additional pre-floatation cells to increase pre-float capacity;
  • Installation of a second concentrate transfer line to increase concentrate transfer  to Luilu;
  • A new pumping station at Mupine tailings facility to increase water capacity to both KTC and Luilu;
  • An upgrade to the existing water filtration plant; and
  • Enhancements to the roaster for utilities, calcine cooling and gas treatment.
• All of the above are necessary for the plant on completion of the WOL Project.

Outlook

• During Q1 2016:
  • Work will continue on the design and construction of the WOL Project according to the defined project plan;
  • Open pit mining operations are expected to continue with focus on waste mining;
  • Care and maintenance activities in the underground mine and at KTC and Luilu are expected to continue; and
  • Various initiatives relating to cost base reduction, consumable inventory reductions, staff training and process improvements are expected to continue to be developed.

This press release was prepared under the supervision of Tim Henderson, Technical Consultant and Director of 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 Ltd. 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 suspension of copper and cobalt processing, reductions in headcount and contractor demobilization process, the impact of newly acquired or commissioned equipment on operations, the ongoing development of T17 Underground Mine, the improvements related to the Whole Ore Leach Project, the expectation of resumption of production and the impact of the timing thereof, and the overall expected improvement of recoveries and grades. 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 the following: the operations of the Company during the production suspension and timeline for the recommencement of operations remaining consistent with management's expectations, there being no significant disruptions affecting the operations of the Company whether due to labour disruptions, supply disruptions, power disruptions, rollout of new equipment, damage to equipment or otherwise; permitting, development, operations, expansion and acquisitions at the Project 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 DRC; political and legal developments in the DRC being consistent with its current expectations; the continued provision or procurement of additional funding from Glencore for operations, the completion of the T17 Underground Mine, the WOL Project and the Power Project; the successful completion of, and realizing the intended benefits from the WOL Project and the Power Project; new equipment performs to expectations; the successful development of the T17 Underground Mine; the exchange rate between the US dollar, South African rand, British pounds, Canadian dollar, Swiss franc, Congolese franc and Euro being approximately consistent with current levels; certain price assumptions for copper and cobalt; prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; production and cost of sales forecasts for the Company meeting expectations; the accuracy of the current ore reserve and mineral resource estimates of the Company (including but not limited to ore tonnage and ore grade estimates); and labour and material costs increasing on a basis consistent with the Company's current expectations.

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 Ltd.