AAA.L Regulatory News (AAA)

16 May 2005 07:00

Adastra Minerals Inc16 May 2005 International Finance Corporation to Exercise Kolwezi Option Trading: TSX and AIM:AAA LONDON, U.K. (May 16, 2005) - Adastra Minerals Inc. ("Adastra" or "the Company")today announced that the World Bank Group's Board of Executive Directors hasapproved a proposed investment by its private sector arm, the InternationalFinancial Corporation (IFC), into Kingamyambo Musonoi Tailings Sarl, (KMT). TheIFC will acquire a 7.5% equity interest in KMT. KMT owns 100% of the KolweziCobalt and Copper Tailings Deposits ("Kolwezi" or "the Project") in theDemocratic Republic of Congo ("DRC"). "We see this decision by the World Bank Group as both a powerful endorsement ofthe Project's robust economics and as another key component of the Project'sfinancial structure," said Tim Read, President and CEO of Adastra. "The IFC hasjoined the Industrial Development Corporation of South Africa ("IDC") as both anequity investor and a potential lender when Kolwezi reaches its developmentphase. Moreover both these international organizations believe strongly inSustainable Development and recognize the important social, environmental andmacro-economic benefits that the Kolwezi Project will bring to the region." The IFC, as is also the case with the IDC, will acquire its shareholding in KMTat a price based on the allowable expenditures on the Project up to the date ofexercising its option, and will pre-fund its proportion (based on ownership ofClass C shares) of the estimated costs of progressing the Project to a financedgo-ahead decision. As a result of the IDC and IFC option exercises, Adastra'swholly owned subsidiary Congo Mineral Developments, will receive approximatelyUS$12 million in cash. The current share-holdings in KMT, a DRC-registered company, are: Congo Mineral Developments 82.5% Government of the DRC ("GDRC") 5.0% Gecamines, the DRC mining parastatal 12.5% Following the exercise of the IFC and the IDC options, the share-ownership ofKMT will be as follows: Capital Structure Shareholders Ownership Class of % of KMT % of class % of KMT Shares A 5.0 Government of the DRC 100.0 5.0 B 12.5 Gecamines 100.0 12.5 C 82.5 Congo Mineral Developments 78.8 65.0 IDC 12.1 10.0 IFC 9.1 7.5 _____ _____ 100.0 Total 100.0 About the International Finance Corporation The mission of IFC (www.ifc.org) is to promote sustainable private sectorinvestment in developing countries, helping to reduce poverty and improvepeople's lives. IFC finances private sector investments in the developing world,mobilizes capital in the international financial markets, helps clients improvesocial and environmental sustainability, and provides technical assistance andadvice to governments and businesses. From its founding in 1956 through FY04,IFC has committed more than $44 billion of its own funds and arranged $23billion in syndications for 3,143 companies in 140 developing countries. IFC'sworldwide committed portfolio as of FY04 was $17.9 billion for its own accountand $5.5 billion held for participants in loan syndications. 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. Such aproject would generate significant tax and foreign exchange earnings, as well asproviding local employment and contributing to the revival of the DRC's copperbelt infrastructure. About Adastra Adastra Minerals is an international mining company listed on the Toronto StockExchange and on AIM, in London, under the symbol "AAA". It is currentlydeveloping several mineral assets in Central Africa, including the KolweziProject and the Kipushi zinc mine in the DRC. Adastra's growth strategyemphasizes the creation of shareholder value through the development ofworld-lass resources in stable or stabilizing political environments. Ends Contact us: LondonTim Read Justine Howarth / Cathy MalinsChief Executive Officer Parkgreen CommunicationsT: +44 (0)20 7355 3552 T: +44 (0)20 7493 3713F: +44 (0)20 7355 3554 F: +44 (0)20 7491 3936E: london@adastramin.com E: justine.howarth@parkgreenmedia.com North AmericaMartti KangasThe Equicom GroupT: +1 416 815 0700 x. 243 +1 800 385 5451 (toll free)F: +1 416 815 0080E: 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 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. This information is provided by RNS The company news service from the London Stock Exchange