Katanga Mining Ltd Ord KATFF

Sudden Interest in KAT

[Kooler]

this could be the reason.......

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UPDATE 1-Katanga Mining sets $250 mln rights offering

Tue Apr 28, 2009 10:37am EDT

Bridge loan and rights offering to improve co's finances

* Bridge loan repayable by June 30, 2009

April 28 (Reuters) - Katanga Mining Ltd (KAT.TO) said it entered into a bridge loan agreement and a rights offering plan with natural resources company Glencore Finance (Bermuda) Ltd to strengthen its financial position.

Katanga said the bridge loan will address its immediate solvency risk as the funds are urgently required in order to fund its ongoing operations.

The rights offering will address the company's requirement for an additional $250 million in capital.

In addition to paying back the bridge loan, the funds received from the offering will provide funding for Phase 2 of its African Kamoto/Dima mining project, and allow for ramp-up of production at the project.

Glencore has agreed that it will, within three business days after the mailing of the final prospectus in respect of the offering, subscribe for shares.

Katanga has been experiencing financial difficulties since at least the third quarter of 2008.

On Jan 12, 2009, Glencore funded an additional $100 million in debt financing to Katanga through the amendment and restatement of its existing $150 million exchangeable credit facility, the company said.

Shares of the mining company were trading down nearly 8 percent at 30 Canadian cents Tuesday morning on the Toronto Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Anil D'Silva) (([e-mail]; within U.S. [phone]; outside U.S. [phone]; Reuters Messaging: [e-mail]))