Katanga Mining Announces 2011 Year End Results

ZUG, SWITZERLAND, Feb. 14, 2012 /CNW/ - Katanga Mining Limited

Highlights during the year ended December 31, 2011

Updated Phase 4 Approval

        --  During Q4 2011, Katanga announced that its Updated Phase 4
            Expansion (as defined below) had been approved. Consistent with
            Katanga's completion of the Phase 3 expansion of its copper
            cobalt project described in Katanga's Independent Technical
            Report (ITR) of March 31, 2011, Katanga commissioned a front
            end engineering and early works report (the 'Early Works
            Report'). The Early Works Report identified the following
            (collectively, the 'Updated Phase 4 Expansion'):
      o an additional 100,000 tonnes per annum solvent extraction ('SX')
        plant, over and above the 200,000 tonnes per annum SX plant
        described in the ITR, to be constructed in front of the existing
        Luilu electrowinning plant. The ITR detailed the conversion of the
        existing copper electro refinery at the Luilu refinery to a 200,000
        tonnes per annum capacity copper electro-winning facility fed by
        the 200,000 tonnes per annum SX plant.
      o Katanga reaching higher copper and cobalt production levels sooner
        than the timelines described in the ITR;
      o an increase in expansionary capital expenditures from approximately
        $537 million as described in the ITR to approximately $635 million
        due primarily to the inclusion of the additional SX plant and an
        in-pit crusher at KOV Open Pit; and
      o the increase of copper production to 270,000 tonnes per annum of
        LME Grade A copper and thereafter the expansion of copper
        production to 310,000 tonnes per annum which the Company intends to
        proceed with utilizing anticipated cash flows from operating
        activities.
        --  In order to expedite the commencement of the Updated Phase 4
            Expansion, Katanga executed a loan facility for up to $515.5
            million as a commitment from Glencore International plc. The
            facility will fund the Updated Phase 4 Expansion of Katanga's
            copper cobalt project not covered by the Company's cash flows.

Mining

        --  During 2011, the Company mined 4,532,954 tonnes of ore at a 
            grade of 4.38%, resulting in contained copper in ore mined of
            198,553 tonnes, 51% higher than 2010.
        --  Ore mined and hoisted at KTO Underground Mine for 2011 was
            1,606,197 tonnes, a 23% increase on 2010.  The average copper
            grade for 2011 was 3.51%.
        --  2,522,439 tonnes of ore was mined at KOV Open Pit during 2011,
            249% above 2010.  This is consistent with the 2012 production
            rate and the ramp up schedule as described in the ITR.  The
            copper grade of ore mined from KOV Open Pit for 2011 averaged
            4.98%.
        --  KOV Open Pit was dewatered during the second quarter of 2011
            with 52.7 million cubic litres of water having been removed
            from the pit.
        --  During 2011, the Company continued to dewater Kamoto East pit
            and the water level to date has dropped by 17.5 meters with 6.0
            million cubic litres of water having been removed. Dewatering
            the Kamoto East pit allows for more efficient and cost
            effective management of waste disposal from the KOV Open Pit as
            well as the potential development of the Kamoto East resource
            using underground mining methods.

Processing

        --  Ore milled at the KTC concentrator facility for 2011 was
            4,096,480 tonnes, an increase of 40% from 2010.
        --  As at March 31, 2011, the CM7 mill in KTC and its associated
            feed systems and flotation cells were refurbished and
            commissioned. This has increased the total milling capacity at
            KTC from 5.52 million to 7.68 million tonnes of ore per annum,
            which, as described in the ITR, is sufficient milling capacity
            to support the Life of Mine Plan through to 2014.
        --  A 120,000 tonnes per annum concentrate filtration and bagging
            facility was commissioned during Q3 2011 and the Company
            continues to increase the production of oxide concentrate for
            sale as a finished product.
        --  Copper produced in metal and concentrate for 2011 totalled
            91,149 tonnes, an increase of 57% compared to 2010. As at
            December 31, 2011, Katanga was at an annualized production rate
            of 108 kilo-tonnes per annum.
        --  Cobalt produced totalled 2,433 tonnes for the year.

Financial

        --  Total sales for 2011, were $574.4 million an increase of 7%
            compared to 2010. The sales figure has been adversely affected
            by an unrealized mark to market adjustments as at December 31,
            2011, of $7.0 million.
        --  In addition, the sales value of oxide concentrate available to
            be shipped, but not invoiced as at December 31, 2011, amounted
            to approximately $75.2 million.
        --  For 2011, the Company generated net income of $109.3 million.
        --  Cash generated from operating activities amounted to $280.9
            million, an increase of 53% compared to 2010.
        --  Cash and cash equivalents as at December 31, 2011, amounted to
            $57.1 million.
        --  On December 30, 2011, the Company redeemed the outstanding
            Canadian $125 million 14% debentures in full.  The Company
            executed a loan facility of $120 million with a Glencore
            International plc group company to fund the redemption.

Human Resources

        --  On April 7, 2011, the Company announced the promotion of Nico
            Paraskevas to the position of Chief Financial Officer.
        --  On September 22, 2011, the Company announced the appointment of
            Jeff Best as Chief Executive Officer.
        --  On October 11, 2011, the Company announced the promotion of
            Itamar Machado to the position of Chief Operating Officer.

Outlook

        --  The Company expects the first copper cathode production through
            the new SX plants and converted copper electro-winning facility
            during the third quarter of 2012. Mechanical completion of the
            Updated Phase 4 Expansion is expected in the third quarter of
            2013.
        --  The Company expects to dewater the Kamoto East pit during the
            first quarter of 2012. The feasibility study for the potential
            T17 underground mine is expected to be completed during the
            first quarter of 2012. This will potentially allow for the
            exploitation of additional T17 resources below the bottom of
            the current open pit through underground mining techniques.

Jeff Best, Chief Executive Officer, commented:

'We are pleased to announce the commencement of the Updated Phase 4 Expansion which we expect to improve copper recovery, utilize existing under-utilized plant capacity, and allow the Company to produce LME Grade A copper. We expect the Company to become a significant African copper and cobalt producer when the Updated Phase 4 Expansion is completed'

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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, including predictions, projections and forecasts. Forward-looking statements include, but are not limited to, the statements set out under the heading 'Outlook' and statements with respect to the commencement, expected completion and results of the Phase IV Expansion and the completion of the feasibility study of a potential T17 underground mine.  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.

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. Such factors include, among others, the actual results of current exploration activities; actual results and interpretation of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of copper and cobalt; possible variations in ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, development or construction activities, as well as those factors disclosed in the Company's current annual information form and other publicly filed documents.  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.

Qualified Person

This press release and the information forming the basis hereof was prepared under the supervision of Tim Henderson, Technical Consultant, Katanga and a 'Qualified Person' as such term is defined in National Instrument 43-101. Mr. Henderson has reviewed and approved the contents of this press release.

Katanga Mining Limited

CONTACT: Jeff Best

CEO

Tel: +41 (041) 766 71 10



Nico Paraskevas

CFO

Tel:+41 (041) 766 71 10