Katanga Mining: Troubles Continue

Another set of disappointing earnings suggests that copper miner Katanga Mining Ltd. (KATFF.PK) continues to have serious operating troubles, according to BMO Capital Markets analyst David Radclyffe.

Katanga, which is getting much-needed financing from shareholder Glencore International AG, reported a first-quarter loss of $53.2-million ($.26 a share), below Mr. Radclyffe's estimate of $.23. And copper production of 8,715 tonnes of copper was 10% below expectations, he noted.

"Operating costs remain very high an the business is loss-making with [Katanga] reporting an operating cash outflow of $71-million for the period," he wrote in a note to clients.

He added that Katanga, which operates in the Democratic Republic of Congo (DRC), remains a high-risk proposition "with the underlying business yet to achieve sustainable levels."

The struggling company nearly ran out of cash last year before Glencore offered it a lifeline. Fellow DRC miner Anvil Mining Ltd. (AVMNF.PK) has also run into liquidity problems.