AAA.L Regulatory News (AAA)

24 Jan 2006 07:01

Adastra Minerals Inc24 January 2006 Adastra Minerals Update on First Quantum Minerals Ltd. Approach Trading: TSX and AIM: AAA London, 24 January 2006 On 18 January 2006, First Quantum Minerals Ltd. ("First Quantum") announced thatit will make an unsolicited share exchange offer to acquire all of theoutstanding shares of Adastra Minerals Inc. ("Adastra", the "Company"). The initial view of the Board of Directors of Adastra (the "Board") and itsfinancial advisers is that this opportunistic offer significantly undervaluesthe Company. In order formally to respond to First Quantum's offer, the Board has formed aSpecial Committee comprising John Bentley, Etienne Denis and Bernard Vavala,three independent directors, and has retained N M Rothschild & Sons Limited asits financial adviser and the Special Committee has hired Torys LLP as its legaladviser. Adastra's legal advisers are Stikeman Elliott LLP. The recommendationof the Board and its reasons supporting such recommendation will be mailed toshareholders and filed with securities regulators in Canada and the UnitedStates within 15 days following the time that any formal offer is made forAdastra. Adastra notes that First Quantum approached Adastra about a potential shareexchange offer in November 2005, at which time it proposed an exchange ratio of1 First Quantum common share for every 15 Adastra common shares. The exchangeratio proposed by First Quantum in its 18 January press release (1 First Quantumcommon share for every 17.5 Adastra common shares) is significantly inferior tothat proposed in November, which at that time the Board rejected as undervaluingthe Company and its prospects. The Board is committed to achieving maximum value for Adastra shareholders,whether through eliciting an improved offer, completing the financing anddevelopment of the Kolwezi Project, or otherwise. Shareholders are urged totake no action until the Special Committee and its advisers have had theopportunity to review any formal offer once made and the Board has made itsrecommendation to shareholders. 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. Royal Bank of Scotland has been mandated to arrange the international commercialtranche of the financing for the project and the Company has receivedexpressions of interest in lending to the project from a number of public sectorfinancial institutions. The definitive feasibility study is expected to becompleted in early March 2006. If this study is favourable, construction isexpected to commence before year-end, with first production planned for thethird quarter of 2008. 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 developingseveral mineral assets in Central Africa, including the Kolwezi 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. Contact us: AdastraTim Read, President and Chief Executive OfficerTel.: +44 (0)20 7355 3552 RothschildCharles Mercey / Stuart VincentTel.: +44 (0)20 7280 5000 Canaccord Adams LimitedRobert FinlayTel.: +44 (0)20 7518 2777 Parkgreen CommunicationsJustine Howarth / Annabel LeatherTel.: +44 (0)20 7493 3713 EquicomMartti KangasTel.: +1 (416) 815 0700 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 principal properties in the Democratic Republic of Congo("DRC"). These forward-looking statements are subject to a variety of risks anduncertainties which could cause actual events or results to differ materiallyfrom those reflected in the forward-looking statements, including, withoutlimitation, risks and uncertainties relating to political risks involving theCompany's operations in the DRC and the policies of other nations andorganizations towards companies doing business in such jurisdictions, theinherent uncertainty of production and cost estimates and the potential forunexpected costs and expenses, commodity price fluctuations, the inability orfailure to obtain adequate financing on a timely basis and other risks anduncertainties, including those described in the Company's Annual Report on Form20-F for the year ended October 31, 2004 and Reports on Form 6-K filed with theSecurities and Exchange Commission. N M Rothschild & Sons Limited ("Rothschild"), which is authorised and regulatedby the Financial Services Authority in the United Kingdom, is acting for Adastrain relation to the matters referred to in this announcement and no one else andwill not be responsible to anyone other than Adastra for providing theprotections offered to clients of Rothschild nor for providing advice inrelation to the matters referred to in this announcement. This information is provided by RNS The company news service from the London Stock Exchange