VANCOUVER — Katanga Mining (KAT-T) is purchasing the operator of its 75%-owned Kamoto copper- cobalt mine in the Democratic Republic of the Congo (DRC) to save on mining costs.
The contractor, Kamoto Operating (KOL), receives a percentage of revenue as payment for running the mine for Katanga and Gcamines, which owns the project’s remaining 25% stake.
Katanga chief financial officer Nick Brodie says that by purchasing KOL, Katanga will eliminate that surcharge.
Wayland Management and Tain Holdings own KOL and in return for it will receive US$1.6 million in cash and 12 million Katanga shares. Those shares were worth just over $7 million at presstime.
For much of the last year, Katanga has been under financial duress as it moves to expand production at Kamoto to 70,000 tonnes copper and 4,000 tonnes cobalt a year.
To make ends meet earlier this year, Katanga turned to Glencore International and effectively agreed to exchange a majority stake in the company for an infusion of funds.
As part of the rescue package Katanga has extended to Glencore just over 700 million shares in a US$250-million rights offering and arranged a US$50-million bridge loan with the Swissbased metals giant. As of July 7 that gave Glencore directly and indirectly a 77.9% stake in the junior.
Katanga expects to complete the mill expansion in September.
Be the first to comment on "Katanga To Buy Kamoto Contract-Operator"