Gevonden:
Katanga Mining Announces Settlement of DRC Legal Dispute with Gécamines and Agreement for the Resolution of KCC Capital Deficiency
Canada NewsWire
ZUG, Switzerland, June 12, 2018
ZUG, Switzerland, June 12, 2018 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") announces today that, together with its 75% operating subsidiary in the Democratic Republic of the Congo ("DRC"), Kamoto Copper Company ("KCC"), it has entered into an agreement (the "Settlement Agreement") with (amongst others) the Company's joint venture partner, DRC state-owned company La Générale des Carrières et des Mines ("Gécamines") to terminate the legal proceedings brought by Gécamines in the DRC courts and resolve KCC's previously disclosed capital deficiency.
Pursuant to the Settlement Agreement, amongst other things, Gécamines, Katanga and KCC have agreed on a recapitalization plan that will allow the reconstruction of the net equity of KCC and satisfy the requirements provided for by DRC corporate law, subject to the satisfaction of certain conditions precedent. The recapitalization plan will be formally effected on the date that KCC completes the necessary corporate proceedings to approve the Settlement Agreement. These proceedings are expected to be completed on a date within the next two weeks (the "Closing Date"). On the Closing Date, Gécamines will withdraw the legal proceedings it commenced on April 20, 2018 in the Kolwezi Commercial Court (the "Kolwezi Court") to dissolve KCC, and certain other outstanding commercial matters between the parties will be resolved.
"We are pleased to have reached an agreement to resolve the KCC capitalization issues and preserve and revitalize the partnership between KCC and Gécamines," commented Hugh Stoyell, Non-Executive Chairman of the Board of Directors of the Company. "Throughout the discussions and negotiations that resulted in this settlement, we have been well supported by our majority shareholder Glencore plc, and we look forward to the next phase of development at KCC, which we believe will provide significant benefits to Katanga and its stakeholders, as well as Gécamines and all stakeholders in the DRC."
Details of the Settlement
Settlement Agreement Overview
The following are the key terms of the Settlement Agreement, which are described in further detail below:
a one-time Settlement Payment (as defined below) by the Company to Gécamines, payable on June 14, 2018, in the amount of US$150 million, in settlement of certain historical commercial disputes under the existing amended, consolidated and restated joint venture agreement dated July 25, 2009 (as amended) (the "JVA");
the resolution of the KCC capital deficiency via the restructuring of all long-term debt and commercial offtake prepayment obligations owed by KCC and the reduction of KCC's total debt (retroactive to January 1, 2018) to a maximum of US$3,450 million through:
the conversion of sufficient existing intercompany loans into new KCC equity by way of a share capital increase; and
a new loan between Katanga Mining Finance Limited ("KMFL"), one of the Company's wholly owned subsidiaries, and KCC, with an interest rate equal to the lesser of (i) USD 6-month LIBOR + 3%, and (ii) 6% (the "Residual Debt");
certain amendments to the dividend payment and free cash flow provisions of the JVA including an amortization schedule for the repayment of the Residual Debt;
the waiver by KCC of certain contractual rights relating to the replacement reserves under the Concession Release Agreement (as defined below), which relieves Gécamines of the obligation to transfer such replacement reserves or provide equivalent financial compensation to KCC in the amount of US$285 million;
the (i) waiver by KCC of certain contractual rights to claim the reimbursement of paid contractors' invoices amounting to approximately US$57 million in connection with the replacement reserves exploration program, and (ii) agreement by KCC to make an additional payment to Gécamines of approximately US$41 million in relation to outstanding expenses incurred by Gécamines as part of the replacement reserves exploration program;
the commitment by KCC to conduct additional studies on the areas of the historical replacement reserves exploration program conducted by Gécamines to identify potential new reserves or ore bodies which have not yet been identified in the Company's previously disclosed ore reserves and mineral resources estimates set out in the Company's NI 43-101 technical report dated March 31, 2018 (effective date December 31, 2017). The Company has agreed to pay additional entry premium (pas de porte) to Gécamines (as described below and in Annex A), should these additional studies demonstrate the existence of additional JORC (as defined below) compliant reserves or lead to the extraction of new ore bodies on KCC's mining titles;
the establishment of new protocols for the involvement of Gécamines in certain commercial affairs of KCC, as follows:
all future intercompany loans to KCC, if any, to be provided by KMFL on equivalent terms as the Residual Debt;
a mandatory requirement to run a tender process on any commercial agreement to be entered into by KCC in excess of US$5 million;
the prior approval of Gécamines of any capital expenditure that would allow the expansion of capacity of KCC's production facilities to over 300,000 tons of copper per annum, if such expenditure exceeds US$500 million; and
the provision by KCC to Gécamines of the proposed annual terms of the copper and cobalt offtake arrangements between KCC and affiliates of Glencore and other further documentation in KCC's possession which Gécamines may reasonably request; and
the withdrawal by Gécamines on the Closing Date of the Capital Deficiency Proceedings and the renouncement by Gécamines of certain orders of the Kolwezi Court related thereto. Each of the parties will also fully and finally release any potential claim relating to the JVA and the operation and management of KCC arising prior to the Closing Date.