HAILEYBURY (miningweekly.com) – TSX-listed Katanga Mining has secured a $265,3-million two-year convertible loan facility, the company announced on Wednesday.

The facility comprises a new loan facility of $100-million underwritten by 8,5% shareholder Glencore Finance, as well as an amendment to an existing $150-million loan provided by Glencore, which, with accrued interest, amounts to about $165,3-million.

The copper- and cobalt-miner, which has already scaled back its operations to cushion the effects of low metals prices, cautioned last week that it required additional funding "on an urgent basis" to stay afloat.

Katanga said on Wednesday that it has drawn up a revised production plan, targetting a rate of 150 000 t/y, and the loan facility will enable it to meet the immediate financial requirements for the new plan through the first quarter of 2009.

After that, it will need to raise another $250-million in debt or equity finance, or a combination of the two, during the first six months of next year.

Once the company has raised the $250-million, the full amount of the $265,3-million facility will be mandatorily converted into equity.

The company is consolidating, rehabilitating and expanding the neighbouring Kamoto and KOV operations in the DRC, after merging with rival Nikanor earlier this year.

The revised production plan involves maintaining capacity at 70 000 t/y until 2010, and rehabilitating the remainder of the KTC concentrator and Luilu metallurgical facility to 150 000 t/y by 2012.

After that, Katanga plans to continue to ramp up production to more than 300 000 t/y, using new sulphur-extraction/electrowinning modules.

The company's shares rose 1,43% on Wednesday, to C$0,355 a share by 11:44 in Toronto, before they were halted pending the announcement.

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