43
© 2008 Katanga Mining Limited Trading symbol: KAT.TO October 2, 2008 Mine Tour – Project Overview
© 2008 Katanga Mining Limited Trading symbol: KAT.TO
October 2, 2008Mine Tour – Project Overview
22
This management presentation contains “forward-looking statements”, within the meaning of the United States Private Securities Litigation Reform Act of 1995 and similar Canadian legislation, concerning the business, operations and financial performance and condition of Katanga. Forward-looking statements include, but are not limited to, statements with respect to anticipated developments in Katanga’s operations in future periods; planned exploration activities; the adequacy of Katanga’s financial resources and other events or conditions that may occur in the future; estimated production and synergies; the ability of Katanga to become a significant low cost copper/cobalt company; the ability of Katanga to continue to create value for its shareholders; the ability of Katanga to meet expected financing requirements; the future price of copper and cobalt; the estimation of mineral reserves and resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; permitting time lines and permitting, mining or processing issues; currency exchange rate fluctuations; government regulation of mining operations; information concerning the interpretation of drill results; success of exploration activities; environmental risks; unanticipated reclamation expenses; title disputes or claims; and limitations on insurance coverage. 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” or “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 related to: unexpected events during construction, expansion and start-up; variations in ore grade, tonnes mined; delay or failure to receive board or government approvals; timing and availability of external financing on acceptable terms; risks related to international operations; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; 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, labour disputes and other risks of the mining industry; delays in the completion of development or construction activities, as well as those factors discussed in or referred to in the current annual Management’s Discussion and Analysis and current Annual Information Form of Katanga 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 undertakes to update any forward-looking statements that are incorporated herein, except in accordance with applicable securities laws.
Cautionary and Forward-Looking Statements
3
10 Years Invested in the DRC
Council of Ministers and Presidential
approval of JV
Kamoto JV Agreement
entered into after 12 months of negotiation
New Mining Code published
Findings of DRC mining contract review received
Democratic Presidential
elections
Katanga milestones DRC milestones
First contact made with DRC
to explore opportunities
Kinross Forrest Limited JV
formed
JV assumes site mgmt; initial
financing & path to Phase I
Phase I completed and
first copper produced
1997 Oct 2001 Jul 2002 Feb 2004 Jul/Aug 2005 Jul 2006 Nov 2006 Dec 2007 Jan 2008 Feb 2008 Jul 2008
Merger with Nikanor
completed
MoU signed between
Gécamines and KFL Limited &
GEC
44
From Mine to Metal
Underground Mining
Cobalt metal
Milling
Flotation
Open Pit Mining
Copper cathode
5
Company Highlights
Major single-site operation in the DRC
Producing refined copper cathode and cobalt metal
Commercial production achieved in 2Q 2008; generating operating cash flow
239Mt M&I resource @ 4.45% Cu and 0.44% Co
Target >300ktpa Cu and >30ktpa Co production in 2011
Mine life 40+ years
75-25 joint venture with Gécamines (state-owned mining company)
6
0% 1% 2% 3% 4% 5% 6%
KatangaTenke
Mount IsaTaimyr Peninsula
AntaminaOlympic Dam
OK TediCollahuasiGrasberg
EscondidaEl Teniente
Codelco NorteLos Pelambres
Bingham CanyonLos Bronces
AlumbreraBatu HijauToquepala
Morenci
Ore Grade - % M&I Contained Copper0 500 1,000 1,500
EscondidaGrasberg
Codelco NorteMount IsaAntaminaKatanga
CollahuasiEl Teniente
Bingham CanyonMorenci
Los PelambresTaimyr Peninsula
Batu HijauAlumbrera
Olympic DamOK Tedi
Los BroncesToquepala
Tenke
Copper Equivalent Production (Kt)
Leading Global Mines by Production1
…Ranked by Grade2,3
1. Based on 2007 production, except Katanga, Tenke and Taimyr Peninsula (2011 forecasts: 300 Kt Cu and 30 Kt Co, 115kt Cu and 8Kt Co, 2006 figures respectively). Price assumptions used to convert production to copper equivalent: Cu $1.60/lb, Co $10.00/lb, Zn $0.75/lb, Ag $11.00/Oz, Au $700/Oz, Mo $12.00/lb.
2. Katanga figure includes all deposits.3. Based on reported Measured and Indicated resource copper grades. Source: CIBC World Markets
World-Scale Producer
Katanga
Katanga
7
Strengthened Management Team
Kim FreemanSenior Vice President, Project Development
Jean-Louis LabelleDirector, Senior Project Manager
John RossDirector, Metallurgy
Brian BarberConstruction Manager
Steve Jones CFO
Adrian De FreitasDirector, Operations &Acting GM, Operations
8
20 km
3. KOV open pit
mine
1. Luilu Met. Plant /
Planned SX-EW refinery
Mine to Refinery on One Site
A. Dikuluwe open pit (O/P) B. Mashamba West (O/P) C. Mashamba East (O/P)D. Musonie-T-17 (O/P) E. Kananga (O/P) F. Tilwezembe (O/P)G. Kolwezi Concentrator
Approximately 5 km
A B C
F
D
E
G
1
2 3
4
2. Kamoto Concentrator
4. Kamotounderground
mine
9
Reserves & Resources
10
High-Grade Reserves & Resources
Reported under Canadian NI 43-101 standards of disclosure for mineral projects. Sources: Katanga June 2006 Feasibility Study & NI 43-101 and press release dated 22/02/07; Nikanor November 2007 Revised Independent Technical Report.
400
0.38
740
0.43
CoCuProven and Probable Mineral Reserves
310
0.48
107,000Ore Tonnes (’000s)
66,000Ore Tonnes (’000s)
3.3Contained Metal Grade %
3,500Contained Metal Tonnes (000s)
3.5Contained Metal Grade %
2,300Contained Metal Tonnes (000s)
Measured and Indicated Mineral Resources
172,000Ore Tonnes (000s)
4.8Contained Metal Grade %
8,200Contained Metal Tonnes (000s)
Inferred Mineral Resources
Updated Reserves & Resources Statement to be published as part of expansion feasibility study
11
Reserve and Resource Estimate by Mine
0.38%3.34%107,782Total Inferred Mineral Resources
Inferred Mineral Resources
0.65%1.59%13,100Tilwezembe0.74%1.44%4,000Kananga West0.32%3.56%71,200KOV
0.40%5.33%126,900KOV
Resource Estimate by Mine
0.73%0.58%0.15%
0.43%
0.48%0.87%0.45%
0.48%0.48%0.54%0.48%
Cobalt Grade %
5.28%
4.13%
3.85%Copper Grade %Ore Tonnes (000s)Proven and Probable Mineral Reserves
4.79%172,848
3.54%66,297
2.58%2.14%
2.28%3.61%
2.79%3.81%
11,826Kamoto
45,507Kamoto
5,336Mashamba East2,320Musonoie-T17
1,501T1719,289Mashamba East
Total Proven & Probable Mineral Reserves
21,227Kamoto5,985T17
18,736Mashamba East
Total Indicated Mineral Resources
Mineral reserves are separate from mineral resources.Reported under Canadian NI 43-101 standards of disclosure for mineral projects. Sources: Katanga June 2006 Feasibility Study & NI 43-101 and press release dated 22/02/07; Nikanor November 2007 Revised Independent Technical Report.
Updated Reserves & Resources Statement to be published as part of expansion feasibility study
12
Geology
13
Kamoto Underground
2007 Reserve Extraction Plan
14
KOV and Kamoto East Pits
0 1000 2000
1400
1000
Kamoto pit Kov pit
S N
Cut 3Cut 7
Geotechnical units, Cut 3 and Cut 7
LEGEND:
RGSCMNSDSOREBDYRSCRATL
14
15
Olivera Orebody
Virgule Orebody
Kamoto East Orebody
Final Phase 1
TopoPhase 2
KOV Ore Body / Pit Cross Section
16
Project Overview
1717
Kamoto Phase II Rehabilitation
KTC:– 3rd cascade mill– 58 flotation cells
Luilu:– New roaster– Doubling leaching & electro-winning
capacityWork completed to date:– 12 of 14 leach & CCD tanks– 18 of 54 electro-winning cells– 58 of 58 float cells
Piling of roaster line 2 starting in August
Production capacity of 70,000 tpa Cu and 3,000 tpa CoCompletion scheduled for end 2008
18
Expansion Feasibility Study
Scheduled for completion during October 2008
Mineral resource evaluations to be updated to comply with NI 43-101
Project capital and operating costs to be updated
Assessment of the environmental issues related to the combined operations
sufficient to complete a revised EIS/EMPP
1919
KOV Open Pit
Oxide:Sulphide ratio at KOV calculated to be 57:43
Equipment arriving on site and commissioning ongoing
Fleet and workshop to be fully operational 4Q 2008
20
1275
Lining a Decant Pond
Silt Dam
Pumping starts fourth quarter 2008
KOV Dewatering Plan
21
Greenfield SX/EW
Roaster
High voltage yard
Acid plant
Cobalt area
Leach tanks & CCD circuitSX/EW module 3
Fire water pond
SX/EW module 1
SX/EW module 2
Existing Luilu RefineryHigher grade refined metal produced
Increased Cu & Co recoveries
Phased modular approach
1 Module ~ 80ktpa Cu
2222
Key Project Milestones*
*Based on scoping study. Feasibility study will finalize schedule.1. Current estimate of capex schedule for Kamoto project. Phases III & IV are being reviewed as part of the Expansion Feasibility Study
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1
2008 2009 2010Task 2011
Kamoto phase II 1
Kamoto phase III 1
Kamoto phase IV 1
Expansion Feasibility Study
Module 1 SX/EW Construction
Mining of KOV Begins
Acid Plant Commissioning
New Cobalt Plant Commissioning
Module 2 SX/EW Construction
Capex $152 m
Est. Capex $124 m
Est. Capex $64 m
2323
Phased Production Growth
0
50
100
150
200
250
300
350
2008 2009 2010 2011
Tonn
es C
oppe
r ('0
00s) Copper - new refinery
Copper - refurbished plant
New feasibility study and mine plan available during Oct 2008 will redefine the production profile
0
5
10
15
20
25
30
35
2008 2009 2010 2011
Tonn
es C
obal
t ('0
00s) Cobalt - new refinery
Cobalt - refurbished plant
2424
2008 Expected Quarterly Production
9,800
7,450
6,150
4,115
0
2,000
4,000
6,000
8,000
10,000
12,000
1QA 2QA 3QE 4QE
Tonn
es C
oppe
r
Payable Copper in ConcentrateCopper Cathode
1,125
875
585
135
0
200
400
600
800
1,000
1,200
1QA 2QA 3QE 4QE
Tonn
es C
obal
t
Payable Cobalt in ConcentrateCobalt Metal
2Q copper production on forecast, but 2H 2008 forecast lowered
2008 expected payable production of 27,500t copper & 2,700t cobalt
Previous forecast 33,500t payable copper & 2,900t payable cobalt
Cobalt Residue Belt Filter
2525
2008 Expected Production
KTC Copper Concentrate (tonnes) – feed to Luilu 106,000
Copper cathode (pounds) 54 million
Cobalt metal (pounds) 2.4 million
KZC Cobalt Concentrate (tonnes) 54,000
Payable copper (pounds) 6.3 million
Payable cobalt (pounds) 3.5 million
Total Payable copper (pounds) 60.3 million
Total Payable cobalt (pounds) 5.9 million
26
Financial Position at June 30, 2008
2009+ GlencoreMarket pricing90% payable on leaving site
2009 onwards capex spend to be determined by expansion feasibility study
100% Offtake agreements in place
2008 LN Metals
Capital expenditure
US$150m Glencore convertible loan
US$125m in corporate debentures
Low debt level
US$352m at June 30, 2008
Net cash position
First draw planned in 1H 2009
Facility currently under discussion:up to $550 million
Future needs offset by:Current operating cash flowMetal prices remaining strong
Financial scope to be determined following completion of expansion feasibility study
Financing initiative
27
Mining Lease & Contract Review
Memorandum of Understanding with Gécamines signed, July 31
Merging DCP and KCC Joint Ventures
Mining licence to be held directly by KCC
Addressing requirements of DRC resulting from Mining Contract Review
Provisions of July 31 MoU, together with provisions of Feb 7 agreement, will be integrated into the merged JV document
28
External Challenges: Infrastructure
RailImports – rail already used for importing suppliesExports – current route to DurbanMaputo and Dar-es-Salaam operational but not practicalRoute to Lobito: shorter with only one border crossing; upgrade expected to be completed by 2009.
RoadExports – direct route from Kolwezi to DurbanImports – over 600 loads transported for Phase I – transit as short as 7 days from JohannesburgLubumbashi to Kolwezi road – upgrade being financed by World Bank
29
External Challenges: Power
Short term
Unaffected by recent load shedding on 220kV network
Our installations are fed from 120kV substation
SNEL guaranteed 65MW by June 2008 – sufficient power until end 2009
Long term
Private sector refurbishment of Inga II will add 850 MW by 2011
Plans to secure financing to refurbish Koni and Mwadingusha
Working closely with SNEL on future needs – 2011 requirement approx. 250MW
30
Corporate Social Responsibility
313131
Benefits
Now employing some 3,700 DRC nationals
Local payroll now exceeding US$3.5m per month
Supporting up to 15,000 jobs in the regional economy
Benefits to the DRC to date: US$900m1
Returns over 20 years from 2011: US$7.0bn2
Substantial Benefits to DRC
Policy
Open & active engagement with local stakeholdersWork in partnership to create sustainable livelihoodsLong-term improvements to living standardsGuided by international standards
Education/Training &Enterprise
Health
Agriculture
Infrastructure
Programs
1. Benefits to the DRC to date figure is up to June 30, 2008 and includes capital expenditure2. Returns to DRC figure based on $1.50/lb Cu and $10.00/lb Co & excludes capital expenditure
3232
Agriculture
Mukweji Farm – crops & livestock introduced; self sustaining by end 2008Women’s agricultural projectNursery established for site rehabilitation
Implementing Community Projects
30kms of road rehabilitation / paving Kolwezi plus Luilu to airport roadLocal road improvement employing ex-artisanal minersWater & electricity supply reinstatedDitch & drain clearance
Infrastructure
3333
Implementing Community Projects
Supporting creation of independent SMEsDay care centre for orphansRefurbishing Kolwezi schools & build new Tilwezembe school
Education / Training & Enterprise
Mwangeji Hospital refurbishment –water supply & sanitationChild vaccination programMalaria prevention program
Health
© 2008 Katanga Mining Limited Trading symbol: KAT.TO
Mine Tour – Achievements and Looking Ahead
35
Achievements to Date
36
From Rehabilitation…
Joint Venture took over site July 2006 – US$175m Phase I investment program
37
…to Production
Production restarted Dec 2007 …on Schedule …on Budget
38
Merger – January 2008
Economies and efficiencies of scale
Significant capital and operating synergies
Strong balance sheet and cash flow generation
Reunite adjacent assets
Potential to be Africa’s largest Cu producer and world’s largest Co producer
39
Conclusions and Looking Ahead
40
Goals for 2H 2008
Continue to strengthen management team
Complete Kamoto Phase II construction
Continue production ramp up of copper cathode and cobalt metal
Start mining at KOV
Complete feasibility study near end of 3Q 2008
Consolidate Joint Ventures & complete contract review process
Potential for LSE listing in 2009
Generate earnings and positive cash flow from operations
41
0% 1% 2% 3% 4% 5% 6%
KatangaTenke
Mount IsaTaimyr Peninsula
AntaminaOlympic Dam
OK TediCollahuasiGrasberg
EscondidaEl Teniente
Codelco NorteLos Pelambres
Bingham CanyonLos Bronces
AlumbreraBatu HijauToquepala
Morenci
Ore Grade - % M&I Contained Copper0 500 1,000 1,500
EscondidaGrasberg
Codelco NorteMount IsaAntaminaKatanga
CollahuasiEl Teniente
Bingham CanyonMorenci
Los PelambresTaimyr Peninsula
Batu HijauAlumbrera
Olympic DamOK Tedi
Los BroncesToquepala
Tenke
Copper Equivalent Production (Kt)
Leading Global Mines by Production1
…Ranked by Grade2,3
1. Based on 2007 production, except Katanga, Tenke and Taimyr Peninsula (2011 forecasts: 300 Kt Cu and 30 Kt Co, 115kt Cu and 8Kt Co, 2006 figures respectively). Price assumptions used to convert production to copper equivalent: Cu $1.60/lb, Co $10.00/lb, Zn $0.75/lb, Ag $11.00/Oz, Au $700/Oz, Mo $12.00/lb.
2. Katanga figure includes all deposits.3. Based on reported Measured and Indicated resource copper grades. Source: CIBC World Markets
World-Scale Producer
Katanga
Katanga
42
Overview
Targeting over 300,000 tonnes Cu and over 30,000 tonnes Co by 2011
Potential to be Africa’s largest Cu producer & world’s largest Co producer
Now generating operational cash flow
Genuine commitment tosustainable development
Globally significant integratedsingle-site operation
Proven management teamand track record
Large-scale, low-cost andlong-life producer
43
Q & A
Tel: +44 20 7440 5800Fax: +44 20 7440 5801
Contact Details
Email: [email protected]: www.katangamining.com
