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Katanga Announces Second Quarter Results

August 07, 2009

LONDON, UK August 7, 2009 – Katanga Mining Limited (TSX – KAT) (“Katanga” or the “Company”) today announces its financial results for the calendar quarter and the six months ended June 30, 2009.

Highlights during and subsequent to the three months ended June 30, 2009

• Total sales for the quarter were US$62.3 million, comprising US$47.9 million (10,478 tonnes) for copper cathode, US$14.0 million (500 tonnes) for cobalt metal, and US$0.4 million (560 tonnes) for cobalt concentrate sales.
• The Company reported a net loss for the quarter ended June 30, 2009 of US$57.5 million (US$0.09 per share). This loss includes non-recurring restructuring expenses of $15.9 million.
• The completion of the refurbishment of the existing facilities to a production capacity of 70,000 tonnes of copper and 4,000 tonnes of cobalt per annum is expected in the third quarter and expenditure on the refurbishment is forecast to be under budget.
• As per the Company’s press releases dated April 28, 2009 and May 22, 2009, the Company announced a US$ 250 million rights offering during the quarter. The rights offering included a standby commitment to ensure that US$ 250million was raised. Further, a US$50 million bridge loan was obtained and partially drawn down on during the quarter to fund the ongoing operations of the Company and subsequently repaid using a portion of the proceeds of the rights offering.
• As per the Company’s press release dated June 2, 2009, the Company received notices of exchange from all lenders under the US$ 265.3 million mandatorily convertible facility to exchange in full their respective loan participations. The total amount outstanding under the Facility as at that date was US$270.2 million, which includes accrued and capitalized interest. In connection with the exchange, the Company issued an additional 971,023,329 common shares.
• As per the Company’s press release dated June 10, 2009, the Company completed the early liquidity closing in relation the rights offering and as a result, gross proceeds of US$172.3 million were raised by issuing 492,379,266 common shares of the Company. The Company used US$32.5 million of the funds to repay the partly drawn bridge facility owing to Glencore Finance (Bermuda) Limited. Subsequent to the second quarter, as per the Company’s press release dated July 7, 2009, the rights offering was completed and the Company raised additional gross proceeds of US$77.7 million by issuing an additional 225,657,016 common shares of the Company.
• As a result of the exchange of the US$ 265.3 million mandatorily convertible facility and completion of the rights offering the Company’s total issued and outstanding common shares increased to 1,895,380,413.
• As per the Company’s press released date July 27, 2009, on July 25, 2009, the Company signed an amended Kamoto Copper Company (“KCC”) Joint Venture Agreement (the “AJVA”) with La Générale des Carrières et des Mines (“Gécamines”). The key areas of the new AJVA are: to release the Dikuluwe and Mashamba West Deposits; to merge the DRC Copper and Cobalt Project (“DCP”) and KCC joint ventures; and address requirements of the Government of the Democratic Republic of Congo resulting from the review of mining partnerships with Gécamines.

Operations and Project Summary for the quarter ended June 30, 2009

Underground (KTO)

During the quarter ended June 30, 2009, 255,129 tonnes of ore was mined with an average copper grade of 4.02% and cobalt grade of 0.51%. This represents a 32% increase on the previous quarter. The Company continues to use external consultants to evaluate the use of bulk mining methods to improve efficiency and safety and work with mine contractors to increase development, backfill and roof supports.

Open Pit (T17)

425,372 tonnes of ore was produced (a 106% increase from the previous quarter) with a copper grade of 1.29% and a cobalt grade of 0.83%, this is largely as a direct result of the mobilization of the mining fleet that took place in the first quarter.

Kamoto Concentrator

476,750 tonnes of ore was processed from both the underground and the open pit mines from which 46,447 tonnes of concentrate was produced, an increase from the first quarter due to the increase in underground and open pit extraction and commissioning of the CM3 mill in March. Refurbishment of CM1 and BM1 mills is continuing and remains on schedule.

Luilu Processing Plant

In the three months ended June 30, 2009 the Company achieved production of 9,516 tonnes of copper cathode and 595 tonnes of cobalt metal (a 9% and 22% increase on the previous quarter production respectively) following the refurbishment of the leach residue flotation system and improvements that are currently underway to the design of the bus-bars.

Project Review

In May 2009, and according to schedule, the #2 residue belt filter was commissioned and brought into operation, as was the oxide re-pulp tank. In the same month, the vacuum pumps and Z2 thickener were also commissioned. In June 2009, the copper leach filter press and residue flotation tailings tank were commissioned.

Commissioning of the roaster will be moved back a month, due to a delay with the delivery of refractory supplies. Commissioning is now scheduled for September 2009. The additional phase 2 scope, including the refurbishment of the ferric removal system, the refurbishment of mills CM1 and BM1 and the installation of a fume extraction system in the copper leach house are expected to be on schedule.

Katanga’s Financial Statements and Management Discussion and Analysis for the quarter are filed on SEDAR, www.sedar.com

For further information contact:

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 Information

This press release contains “forward-looking information” within the meaning of Canadian securities legislation, concerning the business, operations and financial performance and condition of Katanga. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled estimates”, “forecasts”, “intends”, “anticipates”, “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may, “could”, “would”, “might”, “will” or “will be taken”, “occur”, or “be achieved”. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Katanga to be materially different from those expressed or implied by such forward-looking statements, including but not limited to :risks relating to the refurbishment of existing facilities; unexpected events during construction, expansion and start-up; variations in ore grade, tonnes mined; future prices of copper and cobalt; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; political unrest and insurrection; acts of terrorism; accidents, labor disputes and other risks of the mining industry; delays in the completion of development or construction activities, as well as those factors discussed herein or referred to in the current annual information form of the Company filed with the securities regulatory authorities in Canada and available at www.sedar.com. Although management of Katanga has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such 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. Katanga does not undertake to update any forward-looking statements that are incorporated herein, except in accordance with applicable securities laws.

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