Mr. Tahir Usmani reports

KATANGA MINING ANNOUNCES 2018 FIRST QUARTER PRODUCTION AND FINANCIAL RESULTS

Katanga Mining Ltd. has released its first quarter 2018 production and financial results. Katanga's interim financial statements and management's discussion and analysis are available on SEDAR.

                                   PRODUCTION HIGHLIGHTS 
                                                                  Three months ended         
                                                March 31, 2018       Dec. 31, 2017      March 31, 2017
Mining
Waste mined                         tonnes           9,905,100          11,193,159           7,547,604
Ore mined                           tonnes             836,539             433,169                   -
Average copper grade                     %                3.23                2.18                   -
Contained copper in ore mined       tonnes              27,019               9,459                   -
KTC
KITD material processed                Dmt             745,983             481,617             348,045
KITD grade                               %                1.43                1.68                1.26
Open-pit ore milled                 tonnes             878,672             163,211                   -
Cu grade in ore                          %                3.92                4.05                   -
Luilu
WOL feed -- KITD concentrate           Dmt              86,445              13,755                   -
WOL feed -- open-pit ore               Dmt             819,200             126,471                   -
Finished copper                     tonnes              27,677               2,196                   -
Finished cobalt                     tonnes                 525                   -                   -
                                   -------           ---------           ---------           ---------

Unless otherwise specified, all dollar amounts referred to in this press release are U.S. dollars.

Commissioning and resumption of production after 2015 suspension:

• On Sept. 11, 2015, the company announced the decision to suspend the processing of copper and cobalt during the construction phases of the whole ore leach project (WOL project). The suspension continued throughout most of 2017 with copper production resuming upon completion of phase 1 of the WOL project on Dec. 11, 2017.
• Phase 2 construction activities of the WOL project are progressing according to the 2018 project execution plan. Hot commissioning of the second train of the WOL project is expected to commence in fourth quarter 2018.
• The cobalt production section of the plant was commissioned during March, 2018, leading to the production of 525 tonnes of cobalt metal contained in hydroxide.
• The low-grade solvent extraction train was commissioned and ramped up during first quarter 2018, contributing to first quarter 2018 production of 27,677 tonnes of copper cathode.

Mining:

• Waste mined decreased to 9,905,100 tonnes in first quarter 2018 from 11,193,159 tonnes in fourth quarter 2017 relating to reduced waste mining activities in 2018 to provide sufficient ore availability for the WOL project.
• Ore mined in open-pit operations (KOV open pit and Mashamba East open pit) increased to 836,539 tonnes in first quarter 2018 from 433,169 tonnes in fourth quarter 2017. Ore mined in combined open-pit operations in first quarter 2018 had an average copper grade of 3.23 per cent, representing contained copper of 27,019 tonnes. Ore mined in the KOV open pit in fourth quarter 2017 had an average copper grade of 2.18 per cent, representing contained copper of 9,459 tonnes. No ore was mined at the Mashamba East open pit in 2017.
• In first quarter 2018, the company recommissioned for use in the KOV open pit:
  • Two CAT 793D trucks for increased hauling capacity;
  • One CAT D9R dozer related to the continuing mining ramp-up.
• In first quarter 2018, the company commissioned:
  • Two CAT 745 ADT lube trucks for increased ancillary work;
  • One CAT CS74B compactor for road and access maintenance.

Processing:

• Open-pit ore milled and Kamoto interim tailings dam (KITD) material processed at the Kamoto concentrator (KTC) during first quarter 2018 increased over fourth quarter 2017 as the Luilu metallurgical plant ramp-up and commissioning progressed.
• Finished copper increased to 27,677 tonnes in first quarter 2018 from 2,196 tonnes in fourth quarter 2017. Cobalt contained in hydroxide increased to 525 tonnes in first quarter 2018 from nil tonnes in fourth quarter 2017. Both increases related to the WOL commissioning and ramp-up plan.
• In first quarter 2018, the company recommissioned the following assets at KTC:
  • CM5 for milling capacity, which is currently milling at design capacity;
  • Three flotation trains for additional flotation capacity;
  • One CAT D8R dozer for stockpile management.
• In first quarter 2018, the company commissioned the following assets at KTC:
  • Three CAT 745 ADTs for B3 crusher feed and ore management;
  • One CAT 992K for IPC crusher feed;
  • One CAT 320D excavator for B3 crusher feed and ore management.
• In first quarter 2018, the company commissioned the following at Luilu to improve throughputs and recoveries:
  • A low-grade solvent extraction circuit;
  • A cobalt production plant, consisting of impurity removal and cobalt precipitation sections.

During first quarter 2018, the company completed the following on the WOL project, acid plant and cobalt projects (as defined below):

• A preleach train is expected to result in the more efficient use of sulphuric acid.
• The cobalt circuit was commissioned, with the first cobalt hydroxide produced in March, 2018.
• The construction of phase 2 of the WOL project started in January, 2018. Progress was made on the high-grade clarifier, receiving thickener and the postleach clarifier, which form the basis for copper production. It is expected that phase 2 construction will be completed by fourth quarter 2018.
• Progress according to the project schedule is being made on the cobalt debottlenecking project and cobalt dryers, aimed at increasing potential maximum cobalt production capacity to 40,000 tonnes per annum by first quarter 2019.
• Design work progressed during first quarter 2018 on the acid plant. The acid plant is a sulphuric acid and sulphur dioxide production plant to be constructed at KCC, which is anticipated to improve the reliability (compared with imports) of the supply of these reagents to the WOL project processing circuit. The acid plant is designed to produce 1,900 tonnes per day of sulphuric acid, 200 tonnes per day of sulphur dioxide and net 17 megawatts of co-generated power. Acid production is expected to commence in third quarter 2019.

                                      FINANCIAL HIGHLIGHTS 
                                     (all figures in U.S.)
                                                                                    Three months ended
                                                                   March 31, 2018      Dec. 31, 2017     March 31, 2017
Financial
Total sales*                                               $000           146,743              7,696                 (2)
Including net provisional pricing adjustments*             $000            (2,197)               265                 (2)
Total cost of sales***                                     $000          (178,348)            (4,289)                 -
                                                           ----         ---------          ---------          ---------
Gross (loss) profit***                                     $000           (31,605)             3,407                 (2)
Net (loss) attributable to shareholders                    $000           (77,924)          (230,657)          (100,923)
C1 cash costs**                                            $/lb              2.54                  -                  -
Cash flows generated from (used in) operating activities   $000            35,431            (71,844)           (17,330)
EBITDA**                                                   $000            16,359           (187,587)           (52,466)

* Negative price and sales amounts are a result of adverse repricing and marked-to-market
(M2M) adjustments.                    
** Refer to Item 22 in management's discussion and analysis: non-international financial 
reporting standard measures.  
*** Since the resumption of production, expenses previously disclosed in operating expenses 
have been reclassified to cost of sales.

Review of first quarter 2018 results:

• Profitability during first quarter 2018, when compared with fourth quarter 2017, was affected by the following:
  • Total sales increased to $146.7-million in first quarter 2018 from $7.7-million fourth quarter 2017 relating to a 22,189-tonne increase in copper cathode sold.
  • Cost of sales increased to $178.3-million in first quarter 2018 from $4.3-million in fourth quarter 2017 relating to increased sales volumes.
  • EBITDA (earnings before interest, taxes, depreciation and amortization) increased to a gain of $16.4-million in first quarter 2018 from a loss of $187.6-million in fourth quarter 2017 related to increased revenue generated in the period and lower cost of sales as described herein.
  • Depreciation increased to $54.6-million in first quarter 2018 from $31.2-million in fourth quarter 2017 relating to the volume-related depreciation impact on assets being amortized on a unit-of-production basis.
  • Net loss attributable to shareholders decreased to $77.9-million in first quarter 2018 from $230.7-million in fourth quarter 2017.
• Cash flow from operating activities increased to $35.4-million in first quarter 2018 from cash outflow from operations of $71.8-million in fourth quarter 2017. The increase in cash generation was driven by the increase in revenue due to production ramp-up.

Qualified person

Tahir Usmani, PEng, APEGA, chief mine planning engineer of KCC, has reviewed and approved the scientific and technical disclosure in this news release. Mr. Usmani is a qualified person for the purposes of National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

About Katanga Mining Ltd.

Katanga Mining operates a major mine complex in the Democratic Republic of the 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.

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