AAA.L Regulatory News (AAA)

12 Dec 2005 07:01

Adastra Minerals Inc12 December 2005 Adastra Mandates Royal Bank of Scotland In Kolwezi Financing Trading: TSX and AIM: AAA LONDON, U.K. (December 12th, 2005) Adastra Minerals Inc. ("Adastra" or the "Company") is pleased to announce that it has awarded Royal Bank of Scotland plc("RBS") the mandate to arrange the untied commercial bank tranche of the projectfinancing for the Kolwezi Tailings Project ("Kolwezi" or the "Project") in theDemocratic Republic of Congo. The mandate agreement has been executed by RBS and Adastra's wholly ownedsubsidiary Congo Mineral Developments Ltd ("CMD"). CMD is the majorityshareholder of Kingamyambo Musonoi Tailings SARL ("KMT"), the company that willbe the borrower and operate the Project. CMD is responsible for carrying out theDefinitive Feasibility Study and the Environmental and Social Impact Assessment,and for organising the financing for the Project. "This important mandate forms a key component of the project financing ofKolwezi", said Tim Read, President and Chief Executive of Adastra. "The untiedcommercial bank tranche will be for US $60-75 million with an eight yearmaturity and will fund some 20% of the Project's total capital requirements. Weare delighted to have the support of such a pre-eminent bank in driving theKolwezi project forward." The RBS appointment follows the recent announcement by the International FinanceCorporation (part of the World Bank Group) and the Industrial DevelopmentCorporation of South Africa of their participation as shareholders in theProject. The two institutions are also expected to be important lenders to theProject, in addition to the untied commercial bank tranche. Separately, Adastra and its project finance adviser, Rothschild, have helddetailed discussions with a wide range of public and private sector financialinstitutions. The positive response has enabled Adastra to commence detailedplanning of the financing of Kolwezi. "The Project remains firmly on course," said Tim Read. "The DefinitiveFeasibility Study and the Environmental and Social Impact Assessment areexpected to be completed in March 2006, the negotiations for the power contractare well advanced, and there has been considerable progress towards securinglong term off-take agreements for the cobalt and copper production. Ourobjective is to start construction of the Project in the second half of 2006." About Adastra Adastra is an international mining company listed on the Toronto Stock Exchangeand on AIM, in London, under the symbol "AAA". It is currently developingmineral assets in Central Africa, including the Kolwezi Tailings Project and thepossible rehabilitation of the Kipushi zinc mine in the DRC. Adastra's growthstrategy emphasizes the creation of shareholder value through the development ofworld-class resources in stable or stabilizing political environments. About the Kolwezi Project Adastra's Kolwezi Project consists of two dams containing 112.8 million tonnesof oxide tailings, grading 1.49% copper and 0.32% cobalt, as determined by Dr.Isobel Clark of Geostokos Limited, a "qualified person" as defined by theCanadian Securities Administrators' NI 43-101. This resource has the potentialto host one of the world's largest and lowest cost cobalt producers. Adefinitive feasibility study is expected to be completed in the first quarter of2006. If this study is favourable, construction is expected to commence beforeyear-end, with first production in mid 2008. The project is expected to produceinitially approximately 5,500 tonnes of cobalt and 30,000 tonnes of copperannually, at which level of output Kolwezi has a mine life in excess of 50years. Such a project would generate significant taxation, royalty and dividendrevenues to the Government, as well as providing local employment andcontributing to the regeneration of the DRC's copper belt infrastructure. Contact us: Adastra in London Tim Read Justine Howarth / Cathy Malins Chief Executive Officer Parkgreen Communications T: +44 (0)20 7355 3552 T: +44 (0)20 7493 3713 F: +44 (0)20 7355 3554 F: +44 (0)20 7491 3936 E: london@adastramin.com E: justine.howarth@parkgreenmedia.com Adastra in North America Martti KangasThe Equicom Group T: +1 416 815 0700 x. 243 +1 800 385 5451 (toll free) F: +1 416 815 0080 E: mkangas@equicomgroup.com This News Release contains forward-looking statements within the meaning of theUnited States Private Securities Litigation Reform Act of 1995 concerning theCompany's plans for its Kolwezi Project in the Democratic Republic of Congo ("DRC") and the resource size and economic potential of that project. Theseforward-looking statements are subject to a variety of risks and uncertaintieswhich could cause actual events or results to differ materially from thosereflected in the forward-looking statements, including, without limitation,risks and uncertainties relating to political risks involving the Company'soperations in the DRC and the policies of other nations and organizationstowards companies doing business in such jurisdictions, the inherent uncertaintyof production and cost estimates and the potential for unexpected costs andexpenses, commodity price fluctuations, the inability or failure to obtainadequate financing on a timely basis and other risks and uncertainties,including those described in the Company's Annual Report on Form 20-F for theyear ended October 31, 2003 and Reports on Form 6-K filed with the Securitiesand Exchange Commission. This information is provided by RNS The company news service from the London Stock Exchange