FQM.L Regulatory News (FQM)

15 Mar 2006 08:08

Adastra Minerals Inc15 March 2006 NEWS RELEASE Adastra Waives Shareholder Rights Plan Trading: TSX and AIM: AAA London, UK (March 15, 2006) Adastra Minerals Inc. ("Adastra" or the "Company")announces that the board of directors has waived the application of theShareholder Rights Plan (the "Plan") to the First Quantum offer effective as ofMarch 14, 2006. "First Quantum's offer is scheduled to expire more than 60 days since firstbeing announced. The Plan, which was overwhelmingly supported by shareholders,has therefore served its purpose and we believe that shareholders should nowhave their say," said Bernard Vavala, Chairman of Adastra's Board of Directors."We believe the majority of Adastra shareholders continue to find the offerunattractive and have previously given their support to the Board in rejectingthe offer." Since the launch of First Quantum's opportunistic offer Adastra has madesignificant progress in developing the Kolwezi Project. Adastra has completedthe Definitive Feasibility Study, which clearly demonstrates the inadequacy ofFirst Quantum's offer, completed the Environmental and Social Impact Assessment,advanced commercial discussions with Mitsubishi, completed a preliminarygeological sampling programme of the subsurface licence and awarded mandates toco-arrange an export credit tranche of the project financing to the IndustrialDevelopment Corporation of South Africa and Investec Bank Limited. Adastra notes that First Quantum has still failed to address the principalreasons why the Adastra Board urged shareholders to reject First Quantum'soffer, namely that: • First Quantum's offer substantially undervalues Adastra's assets; • the share exchange terms proposed by First Quantum do not fairly reflect the relative values of the assets which each of First Quantum and Adastra would be contributing to a merged company; • First Quantum's offer continues to represent a significant discount to the current market price of Adastra shares; and • First Quantum's offer values Adastra at less than that implied by Mitsubishi's proposal to buy just 14.9% of Kolwezi. The Adastra Board reiterates its unanimous recommendation that shareholdersreject First Quantum's offer and not tender their shares to the First Quantumoffer. 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 Tailings Projectand the possible rehabilitation of the Kipushi zinc mine in the DemocraticRepublic of Congo. Adastra's growth strategy emphasizes the creation ofshareholder value through the development of world-class resources in stable orstabilizing 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 was completed in March 2006. Construction isexpected to commence before year-end, with first production in mid 2008 and amine life in excess of 50 years. The project is expected to 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: London AdastraTim Read, President and Chief Executive OfficerTel.: +44 (0)20 7257 2040 Parkgreen CommunicationsJustine Howarth / Cathy MalinsTel.: +44 (0)20 7493 3713 Toronto 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 andforward-looking information within the meaning of the Securities Act (Ontario)(together, "forward-looking statements"). Such forward-looking statements,include but are not limited to the Company's plans for its Kolwezi Project inthe Democratic Republic of Congo ("DRC"), the Kolwezi Project's net presentvalue, its overall economic potential, the availability of project financing,the likelihood of completion of a transaction with Mitsubishi transaction andinvolve known and unknown risks, uncertainties and other factors which may causethe actual results, performance or achievements expressed or implied by suchforward-looking statements to be materially different. Such factors include,among others, 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, fluctuations in the price of copper and cobalt,conclusions of economic evaluations, changes in project parameters as planscontinue to be refined, the inability or failure to obtain adequate financing orcomplete the proposed transaction with Mitsubishi Corporation on a timely basisand other risks and uncertainties, including those described in the Company'sAnnual Report on Form 20-F for the year ended October 31, 2005 and reports onForm 6-K filed with the Securities and Exchange Commission and the CanadianSecurities Administrators and available at www.sedar.com. This information is provided by RNS The company news service from the London Stock Exchange