Katanga Mining Limited (TSX:KAT) (” Katanga” or the”Company”) today announces that the independent directors of the Company’s Board of Directors, being Robert G. Wardell, Terry Robinson and Hugh Stoyell (the ” Independent Directors “), are conducting a review of certain of the Company’s past accounting. The Independent Directors have concluded that certain of the
Company’s historical financial statements and related management’s discussion and analysis (” MD&A”) will likely require restatement.
The Independent Directors are working with Management, Katanga’s external auditors, Deloitte & Touche, the Company’s outside legal counsel and outside accounting advisors to review historical accounting relating to the production of copper cathode, copper concentrates and stockpiled ore,
which may have an impact on the occurrence, classification and valuation of inventories and
property, plant and equipment . The review is not expected to affect the anticipated timing
for the commissioning of the WOL project.
The conduct of the review and analysis of its conclusions are expected to cause the preparation and filing of the Company’s unaudited interim financial statements for the three and six months ended June 30, 2017 and accompanying MD&A (“Q2 Filings”) to be delayed beyond the August 14, 2017 deadline under National Instrument 51-102–Continuous Disclosure Requirements.
The Company has informed staff of the Ontario Securities Commission (the “OSC”) about its review and will be applying to the OSC pursuant to Part 4 of National Policy 12-203 (“NP 12-203”) for a Management Cease Trade Order (“MCTO”) pending the filing of the Q2 Filings and resolution of the restatement of certain historical financial statements by the Company. If an MCTO is issued, the Company intends to satisfy the provisions of the “alternative information guidelines” as set out in NP 12-203, including the requirement to file bi-weekly status reports in the form of news releases containing prescribed updating information, until the Q2 Filings are made. An MCTO would not generally affect the ability of persons who are not directors, officers or insiders of the Company to trade in securities of the Company. There can be no assurance that an MCTO will be issued.
In light of the proposed MCTO and in conjunction with the preparation of the Q2 Filings, the Company has established a blackout on trading by directors, officers and other insiders of Katanga, and intends to continue the blackout until the Q2 Filings and any restated financial statements have been filed.
Unless circumstances otherwise require, Katanga will provide further comment only when the
review is completed, and the Board receives and considers the Independent Directors’ findings and recommendations