Katanga Mining Announces Filing of Freezing Order Against Kamoto Copper Company
ZUG, Switzerland, April 27, 2018 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") announces that Ventora Development Sasu ("Ventora"), a company affiliated with Dan Gertler, has today served in the Democratic Republic of the Congo ("DRC") a freezing order against Kamoto Copper Company ("KCC"), the Company's 75% operating subsidiary, in the amount of US$2.28 billion.
Ventora alleges that KCC has breached an agreement between KCC, La Générale des Carrières et des Mines ("Gécamines") and Africa Horizons Investments Limited ("AHIL") (which Ventora claims AHIL assigned to it) pursuant to which Ventora alleges KCC is required to make royalty payments to Ventora, by indicating that it will not pay such royalties as a result of Mr. Gertler's designation as a Specially Designated National ("SDN"). Ventora asserts that if its claim for breach is upheld it will be entitled to damages of approximately US$2.28 billion, which it alleges is the value of the future royalties due to it under the agreement.
The freezing order authorizes the bailiff of the Commercial Court of Kolwezi to freeze certain bank accounts, tangible movable assets, and intangible movable assets, such as receivables of KCC, as well as the mining titles, up to the amount of the freezing order and prevent KCC from disposing and/or utilising these assets.
In December 2017, the United States government designated Mr. Gertler and companies affiliated with him as SDNs, thereby imposing blocking sanctions on them and companies owned 50% or more by them.
The agreement with Gécamines and AHIL was concluded by KCC prior to the designation of Mr. Gertler as a SDN, and arose when AHIL acquired these rights from Gécamines.
KCC disputes the assignment by AHIL of its rights under the agreement with KCC and Gécamines to Ventora and that Ventora has any claim against KCC under such agreement.
The agreement between KCC, Gécamines and AHIL is subject to English Law and the exclusive jurisdiction of the English Courts.
The Company denies that KCC is in breach of any of its obligations under the agreement with Gécamines and AHIL and also entirely rejects Ventora's calculation of the value of the future royalties allegedly owed to Ventora. KCC will vigorously contest the freezing order and any subsequent proceedings.
The Company is assessing the impact of the freezing order on KCC's operations in the DRC, but notes that the freezing order may materially adversely affect such operations.
About Katanga Mining Limited
Katanga Mining Limited operates a major mine complex in the Democratic Republic of Congo producing refined copper and cobalt. The Company has the potential to become Africa's largest copper producer and the world's largest cobalt producer. Katanga is listed on the Toronto Stock Exchange under the symbol KAT.
Forward Looking Statements
This press release may contain forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
All forward-looking statements reflect the Company's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. All of the Company's forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions listed below. Although the Company believes that these assumptions are reasonable, this list is not exhaustive of factors that may affect any of the forward-looking statements. The key assumptions that have been made in connection with the forward-looking statements include the following: the impact of the freezing order on the Company's operations, legal issues surrounding the purported assignment of certain rights under an agreement between KCC, Gécamines and AHIL to Ventora, and the outcome in DRC courts of these and related matters.
Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Although Katanga has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise, except in accordance with applicable securities laws.
SOURCE Katanga Mining Limited
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