Katanga Mining Limited, recently announced that its 75% subsidiary Kamoto Copper Company (KCC) has entered into an agreement with La Générale des Carrières et des Mines, its 25% joint venture partner in KCC, to acquire from Gécamines a comprehensive land package covering areas adjacent to KCC’s existing mining concessions.
The land includes multiple blocks over the preferred location for construction of a new long-term tailings facility, and multiple other blocks that will enhance KCC’s ability to more efficiently operate its mines, facilities and other key infrastructure requirements.
If this agreement is implemented then the risks for KCC’s operations resulting from land constraints, which are described in the company’s “43-101 Technical Report” issued on November 7, 2019, would be mitigated.
KCC will pay up to $250m to acquire the land, the total amount payable being dependent on delivery of title to the various different land areas.
The agreement also provides for (among other matters): an initial payment of $150m to Gécamines which will be fully offset against the
purchase price consideration or other payment obligations of the Company to Gécamines from time to time, obligations on KCC to remove tailings (estimated at circa 15m dmt), currently in a sub-section of these areas, to another suitable proximate location, warranties and indemnities from Gécamines concerning the land interests to be transferred, contingent obligations to pay “pas de porte” payments to Gécamines if KCC declares a JORC compliant reserve or otherwise elects to mine any resources in certain of the acquired and land areas, on substantially the same terms as in the Settlement Agreement announced by KCC in June 2018.
KCC expects to satisfy the consideration payments from existing liquidity. The agreement anticipates the title transfers to be effected during the course of 2020.
