Mine Tour Project Overview. October 2, Katanga Mining Limited Trading symbol: KAT.TO

Transcription

1 Mine Tour Project Overview October 2, Katanga Mining Limited Trading symbol: KAT.TO

2 Cautionary and Forward-Looking Statements 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 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. 2

3 10 Years Invested in the DRC First contact made with DRC to explore opportunities Kinross Forrest Limited JV formed Kamoto JV Agreement entered into after 12 months of negotiation JV assumes site mgmt; initial financing & path to Phase I Phase I completed and first copper produced Merger with Nikanor completed MoU signed between Gécamines and KFL Limited & GEC 1997 Oct 2001 Jul 2002 Feb 2004 Jul/Aug 2005 Jul 2006 Nov 2006 Dec 2007 Jan 2008 Feb 2008 Jul 2008 New Mining Code published Council of Ministers and Presidential approval of JV Democratic Presidential elections Findings of DRC mining contract review received Katanga milestones DRC milestones 3

4 From Mine to Metal Underground Mining Open Pit Mining Milling Flotation Copper cathode Cobalt metal 4

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 4.45% Cu and 0.44% Co Target >300ktpa Cu and >30ktpa Co production in 2011 Mine life 40+ years joint venture with Gécamines (state-owned mining company) 5

6 World-Scale Producer Escondida Grasberg Codelco Norte Mount Isa Antamina Katanga Collahuasi El Teniente Bingham Canyon Morenci Los Pelambres Taimyr Peninsula Batu Hijau Alumbrera Olympic Dam OK Tedi Los Bronces Toquepala Tenke Leading Global Mines by Production 1 Katanga Tenke Mount Isa Taimyr Peninsula Antamina Olympic Dam OK Tedi Collahuasi Grasberg Escondida El Teniente Codelco Norte Los Pelambres Bingham Canyon Los Bronces Alumbrera Batu Hijau Toquepala Morenci Ranked by Grade 2, ,000 1,500 Copper Equivalent Production (Kt) 0% 1% 2% 3% 4% 5% 6% Ore Grade - % M&I Contained Copper 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 6

7 Strengthened Management Team Steve Jones CFO Adrian De Freitas Director, Operations & Acting GM, Operations Kim Freeman Senior Vice President, Project Development Jean-Louis Labelle Director, Senior Project Manager John Ross Director, Metallurgy Brian Barber Construction Manager 7

8 Mine to Refinery on One Site Approximately 5 km 1 1. Luilu Met. Plant / Planned SX-EW refinery E 2 A B C 4 3 D G 2. Kamoto Concentrator 3. KOV open pit mine 20 km 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 F 4. Kamoto underground mine 8

9 Reserves & Resources 9

10 High-Grade Reserves & Resources Proven and Probable Mineral Reserves Ore Tonnes ( 000s) Contained Metal Grade % Contained Metal Tonnes (000s) Measured and Indicated Mineral Resources Ore Tonnes (000s) Contained Metal Grade % Contained Metal Tonnes (000s) Inferred Mineral Resources Ore Tonnes ( 000s) Contained Metal Grade % Contained Metal Tonnes (000s) Cu Co 66, , , , , , Reported under Canadian NI standards of disclosure for mineral projects. Sources: Katanga June 2006 Feasibility Study & NI 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 10

11 Reserve and Resource Estimate by Mine Proven and Probable Mineral Reserves Kamoto T17 Mashamba East Total Proven & Probable Mineral Reserves Resource Estimate by Mine Kamoto T17 Mashamba East KOV Total Indicated Mineral Resources Inferred Mineral Resources Kamoto Mashamba East Musonoie-T17 KOV Kananga West Tilwezembe Total Inferred Mineral Resources Ore Tonnes (000s) 45,507 1,501 19,289 66,297 21,227 5,985 18, , ,848 11,826 5,336 2,320 71,200 4,000 13, ,782 Copper Grade % 3.85% 3.81% 2.79% 3.54% 4.13% 3.61% 2.28% 5.33% 4.79% 5.28% 2.14% 2.58% 3.56% 1.44% 1.59% 3.34% Cobalt Grade % Mineral reserves are separate from mineral resources. Reported under Canadian NI standards of disclosure for mineral projects. Sources: Katanga June 2006 Feasibility Study & NI 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 0.48% 0.54% 0.48% 0.48% 0.45% 0.87% 0.48% 0.40% 0.43% 0.15% 0.58% 0.73% 0.32% 0.74% 0.65% 0.38% 11

12 Geology 12

13 Kamoto Underground 2007 Reserve Extraction Plan 13

14 KOV and Kamoto East Pits S Geotechnical units, Cut 3 and Cut 7 N 1400 Kamoto pit Kov pit 1000 Cut 7 Cut 3 LEGEND: RGS CMN SDS OREBDY RSC RATL

15 KOV Ore Body / Pit Cross Section Phase 2 Phase 1 Topo Final Virgule Orebody Olivera Orebody Kamoto East Orebody 15

16 Project Overview 16

17 Kamoto Phase II Rehabilitation Production capacity of 70,000 tpa Cu and 3,000 tpa Co Completion scheduled for end 2008 KTC: 3 rd cascade mill 58 flotation cells Luilu: New roaster Doubling leaching & electro-winning capacity Work 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 17

18 Expansion Feasibility Study Scheduled for completion during October 2008 Mineral resource evaluations to be updated to comply with NI 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 18

19 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

20 1275 KOV Dewatering Plan Silt Dam Lining a Decant Pond Pumping starts fourth quarter

21 Greenfield SX/EW SX/EW module 1 High voltage yard Fire water pond Acid plant SX/EW module 2 SX/EW module 3 Leach tanks & CCD circuit Roaster Higher grade refined metal produced Increased Cu & Co recoveries Existing Luilu Refinery Phased modular approach 1 Module ~ 80ktpa Cu Cobalt area 21

22 Key Project Milestones* Task Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Kamoto phase II 1 Capex $152 m Kamoto phase III 1 Est. Capex $124 m Kamoto phase IV 1 Est. Capex $64 m Expansion Feasibility Study Module 1 SX/EW Construction Module 2 SX/EW Construction Mining of KOV Begins Acid Plant Commissioning New Cobalt Plant Commissioning *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 22

23 Phased Production Growth Tonnes Copper ('000s) Copper - new refinery Copper - refurbished plant New feasibility study and mine plan available during Oct 2008 will redefine Tonnes Cobalt ('000s) Cobalt - new refinery Cobalt - refurbished plant the production profile

24 2008 Expected Quarterly Production 12,000 10,000 Payable Copper in Concentrate Copper Cathode 9,800 Tonnes Copper 8,000 6,000 4,000 4,115 6,150 7,450 Cobalt Residue Belt Filter 2, QA 2QA 3QE 4QE 2Q copper production on forecast, but 2H 2008 forecast lowered 2008 expected payable production of 27,500t copper & 2,700t cobalt Tonnes Cobalt 1,200 1, Payable Cobalt in Concentrate Cobalt Metal ,125 Previous forecast 33,500t payable copper & 2,900t payable cobalt 0 1QA 2QA 3QE 4QE 24

25 2008 Expected Production KTC Copper Concentrate (tonnes) feed to Luilu 106,000 Copper cathode (pounds) Cobalt metal (pounds) 54 million 2.4 million KZC Cobalt Concentrate (tonnes) 54,000 Payable copper (pounds) Payable cobalt (pounds) 6.3 million 3.5 million Total Payable copper (pounds) Total Payable cobalt (pounds) 60.3 million 5.9 million 25

26 Financial Position at June 30, 2008 Net cash position US$352m at June 30, 2008 Low debt level US$125m in corporate debentures US$150m Glencore convertible loan Capital expenditure 2009 onwards capex spend to be determined by expansion feasibility study 100% Offtake agreements in place Financing initiative Financial scope to be determined following completion of expansion feasibility study Future needs offset by: Current operating cash flow Metal prices remaining strong Facility currently under discussion: up to $550 million First draw planned in 1H LN Metals Glencore Market pricing 90% payable on leaving site 26

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 27

28 External Challenges: Infrastructure Road Exports direct route from Kolwezi to Durban Imports over 600 loads transported for Phase I transit as short as 7 days from Johannesburg Lubumbashi to Kolwezi road upgrade being financed by World Bank Rail Imports rail already used for importing supplies Exports current route to Durban Maputo and Dar-es-Salaam operational but not practical Route to Lobito: shorter with only one border crossing; upgrade expected to be completed by

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 29

30 Corporate Social Responsibility 30

31 Substantial Benefits to DRC Programs Policy Benefits Agriculture Infrastructure Health Open & active engagement with local stakeholders Work in partnership to create sustainable livelihoods Long-term improvements to living standards Guided by international standards 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$900m 1 Education/ Training & Enterprise Returns over 20 years from 2011: US$7.0bn 2 1. Benefits to the DRC to date figure is up to June 30, 2008 and includes capital expenditure 2. Returns to DRC figure based on $1.50/lb Cu and $10.00/lb Co & excludes capital expenditure 31

32 Implementing Community Projects Infrastructure 30kms of road rehabilitation / paving Kolwezi plus Luilu to airport road Local road improvement employing exartisanal miners Water & electricity supply reinstated Ditch & drain clearance Agriculture Mukweji Farm crops & livestock introduced; self sustaining by end 2008 Women s agricultural project Nursery established for site rehabilitation 32

33 Implementing Community Projects Health Mwangeji Hospital refurbishment water supply & sanitation Child vaccination program Malaria prevention program Education / Training & Enterprise Supporting creation of independent SMEs Day care centre for orphans Refurbishing Kolwezi schools & build new Tilwezembe school 33

34 Mine Tour Achievements and Looking Ahead 2008 Katanga Mining Limited Trading symbol: KAT.TO

35 Achievements to Date 35

36 From Rehabilitation Joint Venture took over site July 2006 US$175m Phase I investment program 36

37 to Production Production restarted Dec 2007 on Schedule on Budget 37

38 Merger January 2008 Reunite adjacent assets Economies and efficiencies of scale Significant capital and operating synergies Strong balance sheet and cash flow generation Potential to be Africa s largest Cu producer and world s largest Co producer 38

39 Conclusions and Looking Ahead 39

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 40

41 World-Scale Producer Escondida Grasberg Codelco Norte Mount Isa Antamina Katanga Collahuasi El Teniente Bingham Canyon Morenci Los Pelambres Taimyr Peninsula Batu Hijau Alumbrera Olympic Dam OK Tedi Los Bronces Toquepala Tenke Leading Global Mines by Production 1 Katanga Tenke Mount Isa Taimyr Peninsula Antamina Olympic Dam OK Tedi Collahuasi Grasberg Escondida El Teniente Codelco Norte Los Pelambres Bingham Canyon Los Bronces Alumbrera Batu Hijau Toquepala Morenci Ranked by Grade 2, ,000 1,500 Copper Equivalent Production (Kt) 0% 1% 2% 3% 4% 5% 6% Ore Grade - % M&I Contained Copper 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 41

42 Overview Large-scale, low-cost and long-life producer Globally significant integrated single-site operation 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 Proven management team and track record Genuine commitment to sustainable development Now generating operational cash flow 42

43 Q & A Contact Details Tel: Fax: info@katangamining.com Website: 43