FQM.L Regulatory News (FQM)

21 Apr 2008 14:00

First Quantum Minerals Ld21 April 2008 NEWS RELEASE 08-08 April 21, 2008 www.first-quantum.com www.scandinavianminerals.com First Quantum to acquire Scandinavian Minerals cash and share transaction valued at approximately cdn.$281 Million London, England and Toronto, Canada - First Quantum Minerals Ltd. ("FirstQuantum") (TSX: "FM"; LSE: "FQM") and Scandinavian Minerals Limited ("Scandinavian Minerals") (TSX: "SGL") today announced that they have enteredinto a definitive agreement pursuant to which a wholly-owned subsidiary of FirstQuantum will acquire, by way of a court-approved plan of arrangement, all of theoutstanding common shares of Scandinavian Minerals on the basis of Cdn.$9.00 incash plus 0.01 common shares of First Quantum for each common share ofScandinavian Minerals. The implied value of the purchase price is Cdn.$9.89 per Scandinavian Mineralsshare (based on the closing price of First Quantum shares on the Toronto StockExchange of Cdn.$89.36 on April 18, 2008), representing a 41.3% premium to theclosing price of Scandinavian Minerals shares on the Toronto Stock Exchange ofCdn.$7.00 on April 18, 2008 and a 53.8% premium to the volume-weighted averagetrading price of the Scandinavian Minerals shares on the Toronto Stock Exchangeof Cdn.$6.43 for the 20 trading days ended April 18, 2008. The Board of Directors of Scandinavian Minerals has unanimously approved thetransaction and resolved to recommend to the holders of Scandinavian Mineralsshares that they vote in favour of the transaction. In addition, the directorsand senior officers of Scandinavian Minerals have entered into voting agreementswith First Quantum, pursuant to which they have irrevocably agreed to vote theirshares (including any shares issuable upon the exercise of options),representing approximately 13.6% of the issued and outstanding common shares ofScandinavian Minerals, in favour of the transaction. In determining to recommendthe transaction to the shareholders of Scandinavian Minerals, the Board ofDirectors considered a number of factors and relied, in part, on an opinion fromParadigm Capital Inc., financial advisors to Scandinavian Minerals, to theeffect that, subject to the assumptions and conditions set forth in suchopinion, the consideration to be received by the holders of ScandinavianMinerals common shares pursuant to the transaction is fair, from a financialpoint of view, to such holders. Commenting on the transaction, Mr. Peter Walker, President and Chief ExecutiveOfficer of Scandinavian Minerals said, "We believe that the transaction createsa compelling opportunity for the shareholders of Scandinavian Minerals torealize immediate and substantial value for their shares whilst also gainingexposure to profitable and fast-growing metal production through the receipt ofFirst Quantum shares. First Quantum has the experience and track record to takethe Kevitsa project through development to production smoothly andexpeditiously." Mr. Philip Pascall, Chairman and Chief Executive Officer of First Quantum said,"The acquisition of the Kevitsa nickel-copper-PGE deposit fits First Quantum'sstrategy of developing or acquiring projects where, with our experience, we canadd material value to the process of bringing them to commercial production andtheir subsequent efficient operation. Accordingly we look forward to lending ourexpertise to the development of one of the world's major undeveloped sulphidenickel deposits and one of the largest mineral discoveries in Finland's history.This acquisition is also consistent with our goal of diversifying our assetsgeographically and across commodities." About the Transaction The transaction will be carried out by way of a statutory plan of arrangementpursuant to the Canada Business Corporations Act and must be approved by theOntario Superior Court of Justice and the affirmative vote of ScandinavianMinerals' shareholders at a special meeting of shareholders to be called andheld to consider the transaction. The proposed transaction is expected to close in the second quarter of 2008,shortly after receipt of shareholder and court approvals. The completion of the transaction is subject to customary closing conditions,including the receipt of any required regulatory approvals. The arrangement agreement contains customary non-solicitation provisions, butpermits Scandinavian Minerals, in certain circumstances, to terminate thearrangement and accept an unsolicited superior proposal, subject to fulfillingcertain conditions. Scandinavian Minerals has agreed to pay First Quantum abreak fee of US$8 million in such circumstances and certain other limitedcircumstances if the transaction is not completed. First Quantum will finance the acquisition through a combination of cash-on-handand access to existing credit facilities. The transaction is not contingent onany financing condition. Details regarding these and other terms of the transaction are set out in thearrangement agreement, which will be filed by First Quantum and ScandinavianMinerals on the Canadian SEDAR website at www.sedar.com. Further information regarding the transaction will be contained in a proxycircular that Scandinavian Minerals will prepare and mail to holders ofScandinavian Minerals common shares in connection with the special meeting ofshareholders to be held to approve the transaction. It is expected that thesematerials will be mailed in May 2008 for a meeting to be held in June 2008. Oncemailed, the proxy circular will also be available on SEDAR at www.sedar.com. Allshareholders are urged to read the proxy circular once it becomes available asit will contain additional important information concerning the transaction. Paradigm Capital Inc. has acted as financial advisor to Scandinavian Minerals inconnection with the transaction. RBC Capital Markets has acted as financialadvisor to First Quantum in connection with the transaction. About Scandinavian Minerals Scandinavian Minerals is a Canadian public company listed on the Toronto StockExchange under the symbol "SGL" and on the Frankfurt Freiverkehr market underthe symbol W3M. The Company's current focus is the development of its 100%-ownedKevitsa nickel-copper-PGE project in northern Finland. Kevitsa, situated in northern Finland, is one of the world's major undevelopedsulphide nickel deposits and one of the largest mineral discoveries in Finland'shistory. The Kevitsa deposit is easily accessible by road. Water andhydroelectric power are available nearby. In April 2007 Scandinavian Minerals commenced the Feasibility Study for theKevitsa project. The Study is being coordinated by St Barbara LLP of London, UK.The metallurgical process has been developed by the Mineral ProcessingLaboratory of the Geological Survey of Finland. Plant engineering and design isbeing performed by Outotec Oyj. The Feasibility Study is based on an open pitoperation mining approximately 5 million tons per year of ore, with productionof nickel and copper concentrates for sale to local or overseas smelters and isexpected to be completed in the second quarter of calendar 2008. For further information, please visit www.scandinavianminerals.com or contact: John Kearney, Chairman Peter Walker, President & CEO(416) 203-6128 (+358) 400 499 390 About First Quantum First Quantum is a mining and metals company whose principal activities includemineral exploration, development and mining. First Quantum produces LME grade"A" copper cathode, copper in concentrate, gold and sulphuric acid. FirstQuantum's operations in Zambia include the 100% owned Bwana Mkubwa SX/EWfacility and sulphuric acid plants and the 80% owned Kansanshi open pitcopper-gold deposit. In the Democratic Republic of Congo, First Quantum operatesboth the 100% owned Lonshi open pit copper mine, which provides oxide copper orefor processing at Bwana Mkubwa, and the 95% owned Frontier copper mine. Inaddition, First Quantum holds a 65% interest in the Kolwezi copper-cobalttailings project currently under development. In Mauritania, First Quantumoperates the 80% Guelb Moghrein copper-gold mine. About Finland Finland is a republic which became a member of the European Union in 1995. Itspopulation is 5.3 million, of which approximately 560,000 live in the capitalHelsinki and two-thirds live in urban areas. Finland is situated in northernEurope between latitudes 60degrees and 70degrees North with approximately aquarter of its total area north of the Arctic Circle. However, due to the GulfStream, its climate is relatively mild and temperate. Finland has an advancedindustrial economy, with the metal, engineering and electronics industriesaccounting for approximately 60% of export revenues. First Quantum believesthat Finland is a mining-friendly country, with: • a long history of minerals exploration and metals production; • a well-developed mining act; and • excellent mining industry infrastructure, with major processing and refining facilities for copper and nickel plus zinc, cobalt and stainless steel. In addition, Finland has in recent years ranked consistently in the top six ofthe world's national economies for competitiveness and productivity, accordingto the Global Competitiveness Index published by the Geneva-based World EconomicForum. Since 1995, Transparency International organization, an internationalorganization combating corruption, has regularly ranked Finland at or near thetop of its list of least corrupt countries in the world. On Behalf of the Board of Directors 12g3-2b-82-4461of First Quantum Minerals Ltd. Listed in Standard and Poor'sG. Clive NewallPresident For further information visit our web site at www.first-quantum.com Contact: Clive Newall, President 1st Floor, Mill House Mill Bay Lane Horsham West Sussex RH12 1TQ United Kingdom Tel: +44 140 327 3484 Fax: +44 140 327 3494 E-Mail: clive.newall@fqml.com. Or Harriet Pask or Sarah MacLeod Hogarth Partnership Ltd. Tel: +44 (0) 20 7357 9477 Certain information contained in this news release constitutes "forward-lookingstatements" within the meaning of the Private Securities Litigation Reform Actof 1995 and forward-looking information under applicable Canadian securitieslegislation. Such forward-looking statements or information, including but notlimited to those with respect to the proposed transaction, the development ofthe Kevitsa project, the prices of nickel, gold, copper, cobalt and sulphuricacid, estimated future production, estimated costs of future production, theCompany's hedging policy and permitting time lines, involve known and unknownrisks, uncertainties, and other factors which may cause the actual results,performance or achievements of the Company to be materially different from anyfuture results, performance or achievements expressed or implied by suchforward-looking statements or information. Such factors include, among others,the ability of each of First Quantum and Scandinavian Minerals to satisfy all ofthe closing conditions to complete the transaction, the possibility that theshareholders of Scandinavian Minerals will not approve the transaction, theactual prices of copper, nickel, gold, cobalt and sulphuric acid, the factualresults of current exploration, development and mining activities, changes inproject parameters as plans continue to be evaluated, as well as those factorsdisclosed in the Company's documents filed from time to time with the Alberta,British Columbia, and Ontario Securities Commissions, the Autorite des marchesfinanciers in Quebec, the United States Securities and Exchange Commission andthe London Stock Exchange. This information is provided by RNS The company news service from the London Stock Exchange