Katanga Mining announces execution of extended and increased loan facilities

ZUG, SWITZERLAND, Nov. 26, 2014 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announces the execution of its extended and increased loan facilities (the "Amended Facilities") with Glencore Finance (Bermuda) Limited, an affiliate of Glencore plc ("Glencore").

The first of the Amended Facilities is an extension of the existing term loan facility agreement (the "Term Loan") between, among others, Katanga, as borrower, and Glencore Finance (Bermuda) Limited, as lender, which was used to fund in substantial part the redemption of Katanga's Canadian $125 million 14% debentures on December 30, 2011. The final maturity date of the Term Loan has been extended to January 1, 2021. All other material terms of the Term Loan remain the same.

The second of the Amended Facilities is an increase and extension of the existing senior secured credit facility agreement (the "Senior Facility") between, among others, a Katanga subsidiary, as borrower, Katanga and other Katanga subsidiaries as guarantors, and Glencore Finance (Bermuda) Limited, as lender. The Senior Facility has been increased to United States dollars ("US$") 2,973.0 million. This amount includes the existing US$515.5 million Senior Facility (plus accrued interest thereon) and all outstanding Glencore International AG prepayments to Katanga's subsidiary, Kamoto Copper Company SA ("KCC") plus accumulated interest thereon. Included in the total amount of the amended Senior Facility is further funding of up to US$50.0 million intended to be made available according to cash flow requirements of KCC based on the approved budgets for the Phase 5 expansion and the Power Project (as amended from time to time in agreement with Glencore). The maturity of the Senior Facility has been extended to January 1, 2021. All other material terms of the Senior Facility remain the same. The drawdown of the increased Senior Facility remains subject to the satisfaction of certain conditions precedent.

Katanga's Corporate Governance and Nominations Committee (the "Committee"), which is comprised of three independent directors, has reviewed the Amended Facilities as contemplated by the Charter of the Committee. The Committee retained Fasken Martineau DuMoulin LLP, independent legal counsel, and BMO Nesbitt Burns Inc., independent financial advisors, in connection with that review. Following that review, the Committee has unanimously determined that entering into the Amended Facilities is in the best interests of Katanga.

Glencore beneficially owns, directly or indirectly, or exercises control or direction over approximately 75% of the issued and outstanding common shares of Katanga.  Due to this relationship, the Amended Facilities are considered "related party transactions" as defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101").  Katanga is relying upon exemption from the requirement to obtain majority of the minority shareholder approval available under MI 61-101 as the Committee has determined that the Amended Facilities are loans on reasonable commercial terms that are not less advantageous to Katanga than if the Amended Facilities were obtained from a person dealing at arm's length with Katanga and do not involve an equity or voting component.

Glencore has made the Amended Facilities available in the ordinary course of its business.  It may from time to time acquire additional securities of Katanga, dispose of some or all of the existing or additional securities it holds or will hold, or may continue to hold its current position.

About Katanga Mining Limited

Katanga Mining Ltd. 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: there being no significant disruptions affecting the operations of the Company whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; permitting, development, operations, expansion and acquisitions being consistent with the Company's current expectations; continued recognition of the Company's mining concessions and other assets, rights, titles and interests in the Democratic Republic of Congo ("DRC"); political and legal developments in the DRC being consistent with its current expectations; the successful completion of, and realizing the intended benefits from the Phase 5 Project and the Power Project; new equipment performs to expectations; certain price assumptions for copper and cobalt; prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; the accuracy of the current ore reserve and mineral resource estimates of the Company (including but not limited to ore tonnage and ore grade estimates); and labour and material costs increasing on a basis consistent with the Company's current expectations.

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, delays due to strikes or other work stoppage, both internal and external to the Company, 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.

SOURCE Katanga Mining Ltd.