Katanga Mining announces 2011 second quarter results

ZUG, SWITZERLAND, Aug. 12, 2011 /CNW/ --
ZUG, SWITZERLAND, Aug. 12, 2011 /CNW/ - Katanga Mining Limited (TSX: KAT) ('Katanga' or the 'Company') today announces its financial results for the second quarter of
2011.  Katanga's Financial Statements and Management's Discussion and
Analysis will be filed on SEDAR, www.sedar.com.

Highlights during the three ('Q2') and six ('H1') months ended June 30,
2011

    --  During Q2 2011, the Company mined 1,296,012 tonnes of ore at a
        grade of 4.39% resulting in contained copper in ore mined of
        56,874 tonnes, 19% higher than Q1 2011 and 124% higher than Q2
        2010.  For H1 2011, contained copper in ore mined amounted to
        104,527 tonnes representing an increase of 117% from H1 2010.
        The annualized contained copper in ore mined for Q2 2011
        amounts to approximately 227,000 tonnes and has allowed an
        increase in contained copper in strategic stockpiles of
        approximately 5,000 tonnes (when compared to Q1 2011) in
        anticipation of the upcoming wet season.
    --  Ore mined and hoisted at KTO Underground Mine for Q2 2011, at
        415,028 tonnes, represents an 8% increase compared to Q1 2011
        and a 33% increase on Q2 2010.  For H1 2011, ore mined and
        hoisted totaled 798,643 tonnes representing an increase of 31%
        on H1 2010.
    --  Ore mined at KOV Open Pit for Q2 2011, at 603,070 tonnes, was
        10% above Q1 2011 (no ore was mined in Q2 2010).  This is
        equivalent to an annualized production capacity of 2.4 million
        tonnes which is consistent with the 2012 production rate and
        the ramp up schedule as described in Katanga's Independent
        Technical Report dated March 31, 2011 (the 'ITR') available on
        SEDAR at www.sedar.com. The
        copper grade of ore mined from KOV Open Pit for Q2 2011
        averaged 5.05%.
    --  KOV Open Pit is now effectively dewatered with 52.7 million
        cubic litres of water having been removed.
    --  During Q2 2011, the Company commenced with the dewatering of
        the Kamoto East pit which is adjacent to KOV Open Pit and the
        water level to date has dropped by 4.37 meters with 1.5 million
        cubic meters of water having been removed. The Kamoto East pit
        dewatering is expected to allow for more efficient and cost
        effective waste management and the potential development of the
        Kamoto East resource using underground mining methods.
    --  Ore milled at KTC for Q2 2011, at 1,085,484 tonnes represents a
        22% increase from Q1 2011 and a 54% increase from Q2 2010.  For
        H1 2011, ore milled at KTC was 1,974,785 tonnes, an increase of
        49% from H1 2010. The current milling capacity at KTC of 7.68
        million tonnes of ore per annum is sufficient milling capacity
        to support the Life of Mine Plan through to 2014 described in
        the ITR.
    --  Copper produced in metal and concentrate for Q2 2011 totaled
        24,370 tonnes, an increase of 33% and 92%, respectively
        compared to Q1 2011 and Q2 2010. Cobalt produced totaled 663
        tonnes, an increase of 4% compared to the Q1 2011.
    --  Total sales for Q2 2011, were $165.6 million, comprised of
        $121.9 million for copper cathode (14,870 tonnes), $25.2
        million for cobalt metal (734 tonnes) and $18.5 million for
        copper concentrate (3,113 tonnes of contained copper).
    --  For Q2 2011, the Company generated a gross profit of $44.0
        million, net income of $43.6 million and cash generated from
        operating activities of $23.6 million.
    --  C1 cash costs for Q2 2011 were $1.79 per pound of copper.  C1
        cash costs per pound of copper are cash costs including mining,
        processing, administration and refining, net of cobalt credits
        - see item 20 Non-IFRS measures.
    --  The Company continues to increase the production of oxide
        concentrate for sale as a finished product and the construction
        of a 120,000 tonnes per annum concentrate filtration and
        bagging facility is expected to be completed in August 2011.
    --  The Company announced the appointment of Jeff Best as Chief
        Operating Officer on May 6, 2011.

Outlook

    --  During Q2 2011, the Company completed the front-end engineering
        and early works study for the New Phase 4 expansion of the
        Project to 310,000 tonnes of copper total plant capacity per
        annum. The study describes:
  o an additional 100ktpa solvent extraction ('SX') plant, over and
    above the 200ktpa SX plant described in the ITR, to be constructed
    in front of the existing Luilu electrowinning plant;
  o the expectation that the Company will reach higher copper and
    cobalt production levels sooner than the timelines as described in
    the ITR; and
  o an increase in expansionary capital expenditures from approximately
    $537 million as described in the ITR to approximately $630 million
    due primarily to the inclusion of the additional SX plant and an
    in-pit crusher at KOV Open Pit;
  The Company is in the process of evaluating the implications of the
  study and expects to make an announcement regarding the way forward
  in due course.

    --  The Company completed all critical scopes of work relating to
        the refurbishment program associated with the previously
        disclosed Accelerated Development Plan during July 2011.  This
        will increase production capacity to 150,000 tonnes per annum
        of copper and 8,000 tonnes per annum of cobalt.
    --  For July 2011, copper produced in metal and concentrate
        exceeded 9,000 tonnes.
    --  The Company is in the process of identifying a new Chief
        Executive Officer to replace Mr. John Ross and would like to
        thank Mr. Ross for his continued service during the transition
        period.

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.

Non-IFRS Measures


The Company has included a non-IFRS (as hereinafter defined) performance
measure, C1 cash costs, net of by-product credits, per pound of copper.
The Company reports C1 cash costs on a production basis. In the copper
mining industry, this is a common performance measure but does not have
any standardized meaning. The Company believes that, in addition to
conventional measures prepared using accounting policies consistent
with the International Accounting Standards Board ('IFRS'), certain investors use this information to evaluate the Company's
performance and ability to generate cash flow. Accordingly, it is
intended to provide additional information and should not be considered
in isolation or as a substitute for measures of performance prepared in
accordance with IFRS. C1 cash costs inclusive of by-product credits are
calculated by deducting by-product cobalt sales revenues from operating
cash costs.

Forward-looking Information


This press release contains 'forward-looking information' within the
meaning of Canadian securities legislation under the heading ' Highlights during the three ('Q2') and six ('H1') months ended June 30,
2011' with respect to the Company's business, operations and financial
performance and condition, including the Company's refurbishment works
associated with the Accelerated Development Program, Phase 4 expansion,
production of oxide concentrate, anticipated future capacities, project
expansion opportunities and exploration, development and production.
Generally, forward-looking information can be identified by the use of
forward-looking terminology such as 'plans', 'expects' or 'does not
expect', 'is expected', 'budget', 'scheduled estimates', 'forecasts',
'outlook', 'intends', 'anticipates', 'does not anticipate', or
'believes', or variations of such words and phrases or statements that
certain actions, events or results 'may', 'could', 'would', 'might',
'will' or 'will be taken', 'occur', or 'be achieved'. Statements
containing forward-looking information 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 statements, including but not
limited to: risks relating to the refurbishment of existing facilities;
unexpected events during construction, start-up, expansion or
production; variations in ore grade or tonnes mined; future prices of
copper and cobalt; futures prices of oxide concentrate; 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 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 statements containing forward-looking
information 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
statements containing forward-looking information. Katanga does not
undertake to update any forward-looking information or statement that
is incorporated herein, except in accordance with applicable securities
laws.

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