TSX-listed Katanga Mining is closely monitoring the progress of the spread of Covid-19 and is taking measures to contain the impact thereof on the health of its employees and operations.
Meanwhile, as previously announced, Katanga’s 75%-owned subsidiary Kamoto Copper Company (KCC) entered into an agreement with KCC’s 25% shareholder, Democratic Republic of Congo- (DRC-) owned La Générale des Carrières et des Mines to acquire from Gécamines a comprehensive land package covering areas adjacent to KCC’s existing mining concessions for $250-million.
None of this had been paid as at February 13, 2020.
The land includes multiple blocks for construction of a new long-term tailings facility and the possible exploitation of additional resources that would enhance KCC’s ability to more efficiently operate its mines and facilities and fulfil other key infrastructure requirements.
The agreement provides for an initial payment of $150-million from KCC to Gécamines, which had been postponed, and, as a result, the agreement was treated as an executory contract and the commitments of $250-million were disclosed as capital commitments in the 2019 annual financial statements.
Engagement with Gécamines and the DRC authorities regarding the initial payment has been ongoing.
KCC has received an injunction order from the General Prosecutor of the Court of Appeal of Kinshasa that orders KCC not to make any payment to Gécamines, pending the conclusion of an investigation by the General Prosecutor relating to Gécamines’ executives.
After reviewing all of its options, KCC has provided notice to Gécamines that the order constitutes a force majeure under the agreement and that its obligations under the agreement are suspended.
Additionally, the company has continued to progress toward the commissioning of its previously disclosed sulphuric acid, sulphur dioxide production and steam turbine generator project at KCC.
However, the acid plant’s commissioning is now delayed as a result of the inability to mobilise necessary commissioning experts to site owing to Covid-19.
The acid plant is expected to be commissioned in the second half of this year, rather than in the first half of the year.