Katanga Closes Kamoto Financing

December 13, 2005

December 13, 2005 – Katanga Mining Limited (KAT-TSXV) (“Katanga”) announces that it received the proceeds from its previously announced $17.5 million private placement of 14 million subscription receipts of Katanga, at a price of $1.25 per subscription receipt. Each subscription receipt was exchanged for one Katanga common share without further payment.

GMP L.P. (formerly GMP Securities Ltd.) and Quest Securities Corporation, as co-lead agents, together with a syndicate that included Haywood Securities Inc., acted as agents in connection with the private placement. Katanga paid the agents a commission of 6.0% of the gross proceeds of the offering and issued the agents compensation warrants to purchase 560,000 Katanga common shares. The exercise price of the compensation warrants is $1.45 per share and they expire on December 12, 2006.

The net proceeds of the offering:

  • will be used to fund the completion of the feasibility study of the Kamoto Joint Venture under an option agreement (the “Option Agreement”) with Kinross Forrest Limited (“KFL”);
  • were used to repay a $1 million promissory note issued on November 2, 2005 to provide interim financing for the feasibility study; and
  • were used to fund the purchase of a 23.33% ownership interest in KFL from Kinross Gold Corporation for $5.45 million.

As previously announced, KFL owns 75% of Kamoto Copper Company SARL (“KCC”). KCC is a Congolese joint venture company that was formed to hold 100% of the mineral reserves, mining, milling, hydrometallurgical facilities and other assets that are subject to a joint venture between KFL and Gécamines, a Democratic Republic of Congo (“DRC”) state owned enterprise. The Kamoto Joint Venture and KCC have been formed and approved under DRC Presidential Decree.

The Option Agreement and the Kamoto Joint Venture relate to the rehabilitation of the mines and plants located in Kolwezi in the DRC. At its peak production in 1986, Gécamines produced 476,000 tonnes of copper and 14,500 tonnes of cobalt, the majority of which came from the Kolwezi operations.

The Option Agreement requires Katanga to fund all costs associated with the preparation of the Kamoto Joint Venture feasibility study. In order to exercise the option, Katanga must also arrange financing for capital needed to complete the first phase of redevelopment. It is estimated that the costs associated with the completion of the feasibility study will be approximately US$7.0 million. The exercise of the option by Katanga is subject to the further filing, review and acceptance by the TSXV.

Arthur Ditto, President and CEO of Katanga noted that “the funds from the private placement allowed Katanga to purchase its initial stake in KFL and will fund the completion of the Kamoto Joint Venture feasibility study, the results of which are expected by April 2006”.

For additional information contact:

Arthur H. Ditto
President & Chief Executive Officer
416 369-4340

-or-

Thomas J. Pladsen
Chief Financial Officer
647 287-3778

www.katangamining.com

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