Also Announces Customs Authority Instruction Temporarily Preventing Imports and Exports

ZUG, Switzerland, Nov. 14, 2018 /CNW/ - Katanga Mining Limited (TSX: KAT) ("Katanga" or the "Company") today announces its 2018 third quarter financial results. Katanga's interim Financial Statements and Management's Discussion and Analysis ("MD&A") will be available on SEDAR, www.sedar.com.

Katanga also disclosed today that the Direction Générale des Douanes et Accises ("DGDA") in the Democratic Republic of the Congo issued an internal instruction on November 9, 2018, temporarily preventing the Company's 75% owned subsidiary, Kamoto Copper Company SA ("KCC"), from importing or exporting any material or production, including copper production, as a result of KCC's alleged failure to declare and pay duties on the export of at least 6,650 tons of copper in December 2014 and January 2015.

Financial performance highlights for the three and nine months ended September 30, 2018

The movement in revenue is due to the following price and volume factors:

• Copper revenue increased to $246.3 million in Q3 2018 from $204.4 million in Q2 2018. Copper revenue increased to $597.2 million in Q3 2018 YTD from $(0.2) million in Q3 2017 YTD. Cobalt revenue increased to $181.8 million in Q3 2018 from $141.1 million in Q2 2018. Cobalt revenue increased to $323.0 million in Q3 2018 YTD from nil million in Q3 2017 YTD. The increase in copper and cobalt revenue for both periods relates to an increase in sales of copper cathode and cobalt contained in hydroxide due to the resumption of production in December 2017 following the completion of phase 1 of the whole ore leach project and the on-going ramp-up of production in 2018;
  
  
• Concentrate revenue decreased to $0.3 million in Q3 2018 YTD from $17.8 million in Q3 2017 YTD. The decrease in concentrate revenue relates to a decrease in KITD oxide concentrate sales, driven by the utilization of concentrate in the leaching process following the completion of phase 1 of the whole ore leach project in December 2017 to produce copper cathode and cobalt contained in hydroxide; and
  
  
• Included in sales is a net provisional pricing adjustment resulting from movements in the commodity price between the date of sale and the final pricing based on average prices for a specified period thereafter. At each reporting date, provisionally priced sales that have not been finalized retain an exposure to future changes in prices and are marked-to-market based on London Metal Exchange ("LME") and Metal Bulletin ("MB") forward prices. These adjustments were recorded in sales in the statement of loss and comprehensive loss and within receivables on the statement of financial position.

DGDA Instruction Preventing Imports and Exports

The DGDA issued an internal instruction on November 9, 2018, temporarily preventing KCC from importing or exporting any material or production, including copper production, as a result of KCC's alleged failure to declare and pay duties on the export of at least 6,650 tons of copper in December 2014 and January 2015. Both before and after the issuance of the internal instruction, KCC has continued to produce copper at normal levels and is in discussions with the DGDA with a view to resolving the matter and resuming imports and exports.

The dispute with the DGDA arose as a result of the Company's previously disclosed overstatement of copper cathode production by 6,650 tonnes in December, 2014. This overstated cathode production was provisionally invoiced in the amount of $43 million on December 31, 2014. However, as disclosed in the Company's restated consolidated financial statements for the years ended December 31, 2016 and 2015, the restated financial statements eliminated the recording of the overstated cathode production and the provisional invoicing of $43 million.

Although the 6,650 tonnes of copper cathode at issue were not produced by KCC in 2014 or exported in 2015, the DGDA claims that KCC failed to pay export duties on the export of these copper lots. The DGDA proposes to levy export duties and significant penalties on KCC as a result of the alleged failure to pay export duties.

Given that the copper cathode production at issue did not exist and that the copper lots were not exported, KCC strongly asserts that no export duties are owing on the overstated (not produced and not sold) copper cathode. As indicated above, KCC is engaged in discussions with the DGDA with a view to resolving the dispute.

Although the Company is optimistic that the parties will reach a satisfactory resolution in the coming days to allow imports and exports to continue, unless the dispute with the DGDA is resolved and KCC's imports and exports are permitted to resume in the near future, the suspension of imports and exports is expected to negatively impact the Company's production and revenue during the suspension.

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.

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. 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.

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. 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 Limited