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Press release from CNW Group

Katanga Mining announces ore reserves and mineral resources

Friday, March 23, 2012

Katanga Mining announces ore reserves and mineral resources08:40 EDT Friday, March 23, 2012ZUG, SWITZERLAND, March 23, 2012 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") is pleased to announce its ore reserve and mineral resource estimates as at December 31, 2011.Key Updates: Mineral ResourcesOverall, the mineral resource for Kamoto Copper Company (KCC) (in which the Company has a 75% interest) decreased by 9.9 million tonnes (2% of total resource), while the TCu grade increased by 2% due to the increase in copper grade, which exists below the current pit floor in the T-17 Open Pit.The material changes (more than 5% difference) in the mineral resources for KTO, T-17 Open Pit and KOV Open Pit are: A total increase of 5% in the Measured mineral resource of KTO is based on the depletion of the resource due to mining (1.4 million tonnes) in 2011, an increase in the resource of 2.9 million tonnes due to the development of a new resource model for Etang North, which is based on new exploration data and updated density information, with subsequent movement of resources from Indicated mineral resources to Measured mineral resources (increased confidence in the resource estimate) and a slight increase in the total tonnage due to a change in interpretation;A decrease of 8% (2.8 million tonnes) in the Indicated mineral resources of KTO is based on the movement of resources from Indicated to Measured mineral resources (increase in confidence in the resource estimate) based on the new interpretation;The increase in Measured mineral resources of 4.5 million tonnes for the T-17 Open Pit and 3.9 million tonnes for the KOV Open Pit, respectively, is due to increased confidence in the resource estimate based on recent exploration results, updated density information and new resource models based on new interpretations that are based on new drilling information;The RSC lithological component of the T-17 Open Pit below planned pit-bottom (8.9 million tonnes) was excluded from the resource statement to conform to the reporting of the mineral resources of KTO, where the RSC lithological component is excluded due to mining method limitations in the underground mines. All of these mineral resources are in the inferred category.There are no changes in the resources reported for Mashamba East Open Pit, Kananga Mine and Tilwezembe Open Pit, as no geological work has been done on these areas in 2011.A reconciliation table comparing the 2011 and 2012 Mineral Resource Estimates is set out in Annexure A.Key Updates: ExplorationNo change in the QAQC methodology and procedures were made over the past year, as the current QAQC procedures and methodology are within acceptable industry standards;The new drilling information for KTO (Kamoto Etang North ore body only, 3980m), T-17 Open Pit (4237m) and KOV Open Pit (3461m), as captured during 2010, necessitated the remodelling of the resource models for these ore bodies by KCC. The resource models for these ore bodies were reviewed by Golder in detail and are compliant with JORC and NI 43-101(both defined below);The drilling campaign also enabled KCC to update the density information of these ore bodies. The new density information confirmed and amended the historical density information that was used previously for conversion from volumes to tonnes.Key Updates: Ore ReservesThe outcome of the December 2011 Ore Reserve estimate is a decrease of only 1 million tonnes of Reserve despite the fact that 4.5 million tonnes have been mined in 2011 due to the addition to the Reserves of:Reserves at KOV due to additional design work conductedInclusion of the Reserve up to 2014 at T-17 underground due to additional technical and design studies conducted during 2011Inclusion of T-17 Extension due to additional study conductedA reconciliation table comparing the 2011 and 2012 Ore Reserves is set out in Annexure B and the key mining parameters which inform the Ore Reserve Estimates are set out in Annexure CKATANGA MINING LIMITEDCONSOLIDATED ORE RESERVES AND MINERAL RESOURCES 1, 2, 3, 4, 5,6,7,8as at December 31, 2011Ore ReservesMt%TCu%TcoProved13.03.430.51Probable83.04.330.46Proved & Probable96.04.210.47    Mineral Resources   Measured40.54.140.54Indicated248.13.980.45Measured & Indicated288.64.000.46Inferred169.12.420.31More detailed ore reserve and mineral resource estimates are as follows:KATANGA MINING LIMITEDPROVED AND PROBABLE ORE RESERVES 1, 4, 5,6,8as at December 31, 2011Ore Reserves  Mt  %TCu%TcoKamoto32.43.590.52T172.53.510.56Mashamba East5.93.000.36KOV55.14.740.45TOTAL 96.04.210.47KATANGA MINING LIMITEDMEASURED AND INDICATED MINERAL RESOURCES 1, 2, 3, 4, 5,7,8as at December 31, 2011Measured and Indicated Mineral ResourcesMt%TCu    %TCoKamoto65.04.480.57T1713.93.880.61Mashamba East75.01.800.38KOV121.15.370.41Kananga4.11.610.79Tilwezembe9.51.890.60TOTAL 288.64.000.46KATANGA MINING LIMITEDINFERRED MINERAL RESOURCES 1, 2, 3, 4, 5,7,8as at December 31, 2011Inferred Mineral Resources Mt%TCu%TCoKamoto11.05.000.59T175.24.210.98Mashamba East65.30.760.10KOV69.83.580.32Kananga4.02.000.98Tilwezembe13.81.750.60TOTAL 169.12.420.31Notes:The ore reserve and mineral resource estimates have been prepared in accordance with the classification criteria of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia, as amended ("JORC Code").  If the definitions and classification standards adopted by the Canadian Securities Administrators' National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") had been used instead of those of the JORC Code, the estimates of mineral reserves and mineral resources would be substantially similar to the estimates of ore reserves and mineral resources presented here.Mineral resources are inclusive of ore reserves.Mineral resources which are not ore reserves do not have demonstrated economic viability.For Kamoto, the ore reserve and mineral resource estimates are for Kamoto Copper Company SARL's ("KCC") entire interest in such ore reserves and mineral resources, whereas the Company owns 75% of KCC.  La Generale des Carrieres et des Mines and La Société Immobilière du Congo, state-owned mining companies in the Democratic Republic of Congo, own the remaining 25% of KCC.Numbers may not add due to rounding.Unless otherwise noted, the Company's ore reserves are estimated using appropriate cut-off grades based on an assumed long term price of $6000 per tonne of copper and long term price of $23 149 per tonne of cobalt. Ore reserves are estimated using appropriate process recoveries, operating costs and mine plans that are unique to each property and include estimated allowances for dilution and mining recovery.Unless otherwise noted, the Company's mineral resources are estimated using appropriate lithological interpretations, grade compositing and grade estimation techniques for copper and cobaltThe Company's normal data verification procedures have been used in collecting, compiling, interpreting and processing the data used to estimate ore reserves and mineral resources. Independent data verification has not been performed. However the data has been independently validated.Qualified Person and Technical ReportThis press release was prepared under the supervision of Tim Henderson, Technical Consultant, Katanga and a 'qualified person' as such term is defined in NI 43-101. Mr. Henderson has reviewed and approved the contents of this press release.The Company's technical report entitled "An Independent Technical Report on the Material Assets of Katanga Mining Limited, Katanga Province, Democratic Republic of Congo" dated March 31, 2011 prepared by Golder Associates Africa (Pty) Ltd under the supervision of Mr. Willem van der Schyff as the "qualified person" in compliance with NI 43-101 is filed on SEDAR at www.sedar.com under the Company's profile for disclosure on 31 March 2011 (the "2011 Technical Report"). This press release is based on the 2011 Technical Report and additional work described in new technical reports to be filed on SEDAR and under the Company's profile for disclosure on 31 March 2012.Cautionary Note to US Investors concerning estimates of Measured, Indicated and Inferred Mineral ResourcesThe above tables uses the terms "Measured, Indicated and Inferred Mineral Resources" using the ore reserves and mineral resource categories of the JORC Code.  We advise US investors that while these terms are recognized and required by Canadian regulations, the US Securities and Exchange Commission does not recognize them.  "Inferred mineral resources" have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of inferred mineral resources will ever be upgraded to a higher category.  In accordance with Canadian rules, estimates of inferred mineral resources cannot form the basis of feasibility or other economic studies.  US investors are cautioned not to assume that any part or all of the Inferred Mineral Resource exists, or is economically or legally mineable.About Katanga Mining LimitedKatanga 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 StatementsThis press release may contain forward-looking statements, including predictions, projections, and mineral reserve and mineral resource estimates. Forward-looking statements include, but are not limited to, mineral reserve and mineral resource estimates.  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. 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, 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.Annexure AKatanga Mining Limited Mineral Resource Reconciliation at December 31, 2011ClassificationProject Area20112010VarianceMt%TCu%TCoMt%TCu%TCoMtMeasuredKTO32.14.330.5830.74.540.541.4T-17 Open Pit4.52.710.540004.5KOV Open Pit3.94.250.220003.9Subtotal40.54.140.5430.74.540.549.8IndicatedKTO32.94.630.5735.74.690.6-2.8Mashamba East Open Pit751.80.38751.80.380T-17 Open Pit9.44.440.658.52.750.870.9KOV Open Pit117.25.410.42123.95.370.4-6.7Kananga Mine4.11.610.794.11.610.790Tilwezembe Open Pit9.51.890.69.51.890.60Subtotal248.13.980.45256.73.950.45-8.6Measured and IndicatedKTO654.480.5766.44.620.57-1.4Mashamba East Open Pit751.80.38751.80.380T-17 Open Pit13.93.880.618.52.750.875.4KOV Open Pit121.15.370.41123.95.370.4-2.8Kananga Mine4.11.610.794.11.610.790Tilwezembe Open Pit9.51.890.69.51.890.60TOTAL288.640.46287.44.020.461.2InferredKTO1150.5910.65.110.590.4Mashamba East Open Pit65.30.760.165.30.760.10T-17 Open Pit5.24.210.9815.31.910.61-10.1KOV Open Pit69.83.580.3271.23.560.32-1.4Kananga Mine420.98420.980Tilwezembe Open Pit13.81.750.613.81.750.60TOTAL169.12.420.31180.22.320.32-11.1Annexure BKatanga Mining Limited Ore Reserve Reconciliation as at December 31, 2011Mining operation2011 Reserve Estimate2010 Reserve EstimateVarianceNotesMt%TCuMt%TCuMtKamoto underground32.43.59343.6-1.6Mined out in 2011 and qualified to 2014T-17 Underground0.93.51000.9Appropriate study to 2014 with increased resource Cu%T-17 Open Pit1.63.521.52.610.1Approval and appropriate study of T-17 ExtensionMashamba East Open pit5.935.930UnchangedKOV Open Pit55.14.7455.74.73-0.6Mined out in 2012 and design adjustmentsTotal964.18974.2-1Net reduction in Reserves due to 2011 mining.The ore reserve estimate at KTO is qualified up to 2014. Appropriate technical design and scheduling study is required in the next 18 months to enable an ore reserve estimate from 2014 due to the material and strategic mine planning changes envisaged.  It must be considered that the mining methods envisaged are more familiar to the mine and have a higher overall extraction than the current strategy as reflected in the ore reserves (based on the 2008 SRK study).  The impact of these changes on the LOM Plan, mining infrastructure requirements and mining operational costs requires appropriate technical study.Annexure COre Reserve Estimation: Key Mining ParametersReference Mining Costs (USD $/t)2.40Reference Mining Processing (USD $/t)31.81Reference Mining Metal Price for Cu (USD $/t)4,790Reference Mining Metal Price for Co(USD $/t)25,228           OperationMining DilutionsMining and Pillar LossesGeological LossesCut off Grade (Cu)Processing Recoveries (Cu)Processing Recoveries (Co)Kamoto Underground4% to 13%10 to 50 %3% to 5%0.60%90.5%76.6%KOV9%1%5%0.60%85%65%T17 Underground5%- 10%5% to 35%5%0.60%85%65%T17 Extension Open Pit10%20%5%0.60%85%65%Mashamba East9%39%5%0.60%85%65%  For further information: Jeff Best CEO Tel: +41 (041) 766 71 10 Nico Paraskevas CFO Tel:+41 (041) 766 71 10