Annual General Meeting. May 2018

Transcription

1 Annual General Meeting May 2018

2 Cautionary Statement: Forward-looking Statements This corporate presentation may contain forward-looking statements, including, but not limited to statements relating to, the improvements related to the WOL Project, Acid Plant and Cobalt Projects, the ramp up of production following the commissioning of the WOL Project, Acid Plant and Cobalt Projects, expected annual copper and cobalt production capacities, the outcome of the OSC investigation, commissioning of the second train of the WOL project, ongoing optimization of the WOL process, the impact of newly acquired or commissioned equipment on operations, the overall expected improvement of recoveries and grades, and the ongoing Power Project. 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 ramp up of production following commissioning of the WOL Project will proceed consistent with management s plans; the expected improvements to the processing circuit from the WOL Project will be realized; there will be 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 will be consistent with the Company's current expectations; the Company s mining concessions, licenses, permits, rights, titles and other assets and interests in the DRC will continue to be recognized in the DRC; political and legal developments in the DRC will be consistent with management s current expectations; there will be no adverse impact on the Company arising out of the OSC investigation or the designation of Mr. Dan Gertler by the U.S. government as an SDN; the provision or procurement of additional funding from Glencore for operations will continue; the T17 Underground Mine, additional phases of the WOL Project and the Power Project will be completed; new equipment will perform to expectations; the recapitalization of KCC will be completed by the Company and Gécamines in a mutually beneficial manner; the exchange rate between the US dollar, South African rand, British pounds, Canadian dollar, Swiss franc, Congolese franc and Euro will remain approximately consistent with current levels; certain price assumptions for copper and cobalt will remain consistent; prices for diesel, natural gas, fuel oil, electricity and other key supplies will remain approximately consistent with current levels; production, operating expenses and cost of sales forecasts for the Company will meet expectations; current ore reserve and mineral resource estimates of the Company (including but not limited to ore tonnage and ore grade estimates) will be accurate; and labour and material costs will increase on a basis consistent with the Company's current expectations. 2

3 Cautionary Statement: Forward-looking Statements 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 unforeseen delays or changes to the WOL Project; 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; adverse outcomes of the KCC recapitalization process, OSC investigation or finalization of the New DRC Mining Code; 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 stoppages, 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. Tahir Usmani, is the Qualified Person, as defined in National Instrument (NI ), who approved the scientific and technical disclosure in this corporate presentation. Technical information in this corporate presentation is based upon the Company s NI technical report dated March 31, 2018, available on SEDAR at 3

4 Agenda Health and Safety Update General Information & Mining and Processing Assets 2017 Operations Overview Production KOV Open Pit Production Mashamba East Open Pit 2017 Financial Overview Restated Financial Statements & Regulatory Matters WOL: Project Summary, Processing, Overview, Site Progress, S -Curve & Statistics Socio-Economic Contributions Social Investments DRC Power Project 4

5 Health & Safety Update 8 KCC Safety Performance - Fatalities and LTIFR 1,000,000 Man Hours 1 # of Fatalities ,59 0,40 0,18 0,16 0,11 LTIFR FATALITY LTIFR 0 Health and Safety Initiatives for 2017 Complete internal self assessments of FHP's to ensure Stage 2 compliance Complete internal review of existing CHMP's Facilitate employee polling / testing on Safe Work programs to ensure employees understand the programs Implement a HRWV process to include, a HRWV Management Plan, HRWV Procedure, Critical Control Observation Cards, PTW Observation Cards and HRWV Observation Cards 5

6 Asset Base General Information 75% / 25% joint venture with state-owned Gécamines High grade ore deposits with Mt Measured and Indicated resource at an estimated average grade of 3.60%Cu and 0.54%Co (1) Mine life: 25 years with potential to produce 300k tpa copper and up to 40k tpa cobalt Processing infrastructure includes: KTC Concentrator Luilu Hydrometallurgical facility WOL construction in process: Core circuit of first train commissioned in Q4 2017, with first copper produced on December 11, 2017 Second train expected to start commissioning in H (1) As of December 31,

7 Asset Base Mining and Processing Assets Approximately 5 km 1 1. Luilu Met. Plant / SX-EW refinery / WOL C 2 3 B 2. Kamoto Concentrator 4 A 3. KOV open pit mine A. Mashamba East (O/P) B. T-17 Musonoi (O/P & U/G) D 20 km 4. Kamoto underground mine C. Kananga (O/P) D. Tilwezembe (O/P) 7

8 2017 Operations Overview The WOL Project cash spend at December 31, 2017 was $298 million Copper production resumed on December 11, 2017 Cobalt production resumed on March 7, 2018 Mining operations continued during 2017 at KOV and Mashamba East Open Pits with a focus on waste mining Waste mined in 2017 was 454% higher than in 2016 due to the focus on securing sufficient ore availability for the commissioning of WOL project 8

9 Production KOV Open Pit In 2017, waste mined was 31,571,164 tonnes, an increase of 321% compared to 2016 due to the prioritisation of securing ore availability for the WOL project In 2017, the Company commissioned: One Caterpillar 6015 excavator Six Caterpillar 793 haul trucks Tonnes Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Production waste mined (tonnes) 9

10 Production Mashamba East Open Pit In 2017, waste mined was 13,710,247 tonnes, an increase of 2,063% compared to 2016 due to the prioritisation of securing ore availability for the WOL project Tonnes Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Production waste mined (tonnes) 10

11 Production Open Pit Ore mined in open pit operations was 433,169 tonnes in Ore mined in the KOV open pit in 2017 had an average copper grade of 2.18%, resulting in contained copper of 9,459 tonnes. No ore was mined at the Mashamba East open pit in Total Ore Mined 0 Q117 Q217 Q317 Q417 Q118 KOV open pit Mashamba East open pit 11

12 Production KTC Total material milled and processed in 2017 was 1,758,890 tonnes Total Material Milled and Processed - KTC 0 Q117 Q217 Q317 Q417 Q118 KITD material milled and processed Open pit ore milled and processed 12

13 Production Luilu Copper cathode produced at Luilu was 2,196 tonnes in No cobalt in hydroxide was produced in Copper Cathode (tonnes) Luilu Copper and Cobalt Production - Q117 Q217 Q317 Q417 Q118 Copper Cathode Produced 13

14 2017 Financial Overview Profitability during 2017, when compared to 2016, was affected by: Concentrate sales amounting to US$22.3 million Copper cathode sales amounting to US$3.3 million Increased cost of sales when compared to 2016 related to the sales of copper concentrates and the production of copper cathode Net Loss Attributable to Equity Holders of US$573.5 million ( US$419.9 million loss) Total assets increased from US$5,706 million as at December 31, 2016 to US$5,899 million as at December 31, 2017 Fixed asset impairments recognized in 2017: Roaster 1 & 2: US$9.6 million Electrowinning Tank House 1: US$15.5 million 14

15 EBITDA The Company s EBITDA loss for Q was US$187M $50.0 $0.0 Q117 Q217 Q317 Q417 Q118 ($50.0) ($100.0) ($150.0) ($200.0) EBITDA 15

16 Restated Financial Statements & Regulatory Matters Press release issued on November 20, 2017 outlined: The nature of the matters involved The impact of these matters on the previously published Financial Statements and MD&A The correcting entries booked to correct these matters; and The measures adopted by the Board Katanga has also been advised that OSC enforcement staff are reviewing Katanga's risk disclosure in connection with applicable requirements under certain international bribery, government payment and anti-corruption laws. 16

17 WOL Project Summary Total project spend - $437 million 300,000 tonnes production capacity of Copper Cathode per annum 40,000 tonnes production capacity of Cobalt contained in Hydroxide per annum Core circuit commissioned and first copper produced on December 11, 2017 Remaining project commissioning scheduled for H Completed test work shows: Overall Copper recovery 82 % Sulphide Copper recovery 76 % Oxide Copper recovery 85 % Gangue acid consumption 65 kg/t Plant flexible to sulphide / oxide ratio 17

18 Processing Flowsheet Oxide Flotation vs WOL Current processing flowsheet WOL processing flowsheet Stockpile Stockpile KTC plant Mixed ore milling Oxide concentrate circuit requires multiple reagent points KTC plant Mixed ore milling Oxide material requires only 1 reagent at 1 point - Acid Preflotation Oxide flotation Sulphide concentrate Preflotation Sulphide concentrate Luilu plant Final tailings Oxide concentrate Roasting Luilu plant Oxide ore Roasting Leaching Leaching SX EW SX EW Cu cathode Cu cathode 18

19 WOL Project Project Overview As at December 31, 2017 cumulative cash payments of $298 million Schedule Core copper circuit commissioned in Q First copper produced on December 11, 2017 First cobalt produced on March 7, 2018 On track for second train commissioning by Q Ongoing optimization Cobalt plant (new and old integration) Commissioning Plan being refined Ore Blending Strategy being refined 19

20 WOL Project Site Progress WOL Progress: January 2016 to January

21 WOL Project - Project Satistics # of new tanks 123 # of pumps 260 # of automated valves 1058 # of manual valves 5700 Estimated length of: Piping 132 km Instrument cables 160 km # of instruments

22 Socio-Economic Contributions Our People 4,013 employees and 4,762 contractors in 2017 $119.8 million on salaries and $6 million on health Focus on training and capacity-building programs Procurement 64% of our spend for procurement allocated to local suppliers and contractors Governance Policies and procedures align to the highest mining industry standards The company endorses the EITI (Extractive Industries Transparency Initiative) and the Voluntary Principles on Security and Human Rights Community Development $5.8 million investment in surrounding communities in 2017 Focus on 4 areas: Health, Livelihoods, Education, Infrastructure Our community strategy is aligned to National Program for socio-economic development 22

23 Social Investments Health Support to vaccination campaigns, training modules for medical staff and drug donation. Support to the national program against HIV, PNMLS: awareness activities and training of medical staff, rehabilitation of facilities Rehabilitation of fours wards, kitchen and toilettes of Mwangeji hospital Construction and equipment of a health center in the village of Noa Education Rehabilitation and equipment of three schools in the communities of Luilu, Musonoi and Kapata Holiday camps for 5,000 children to improve recreational and educational activities, while sensitizing them about risks linked to artisanal mining 23

24 Social Investments (continued) Infrastructure Drilling and equipping of two wells in the community of Luilu Rehabilitation and equipment of two community centers in the communities of Musonoi and Kapata Community development Support to 106 cooperatives with more than 3,500 members, with inputs and training (agriculture, livestock, fish farming, beekeeping, welding, sewing, carpentry, small trade) Professional training for 491 community members 24

25 DRC Power Project Summary 450 MW for KCC, Mumi and partners 350 MW of new power and 1000 MW transmission from INGA to Kolwezi Reimbursed via 40% credit to power bills Additional 10% withheld for maintenance fund Excess MW available to the population INGA 2 Status and Timeline Planned completion: Turbine G27 Q Turbine G28 Q World Bank Project refurbishments online: G21 (Q3 2017) and G22 (Q4 2017) G-27 Turbine Financial Total project budget $ 472 million Total project spend at Dec 2017 $ 382 million Total project funded at Dec 2017 $ 398 million Total amounts recovered at Dec 2017 $ 79 million $ 37 million interest (KML = $12 million) $ 42 million capital (KML = $15 million) 25

26 Q&A and Contacts Contact Details Tel: Fax: Website: 26