FQM.L Regulatory News (FQM)

27 Feb 2006 09:20

Adastra Minerals Inc27 February 2006 Adastra Notes First Quantum's Failure to Address Value Trading: TSX and AIM: AAA London, UK (February 27, 2006) - Adastra Minerals Inc. ("Adastra") announcesthat, together with its financial and legal advisers, it has reviewed FirstQuantum's reply to its Directors' Circular of February 17. Adastra notes that First Quantum failed to address the principal reasons why theAdastra Board urged shareholders to reject the offer, namely that: • First Quantum's offer substantially undervalues Adastra's assets. • The share exchange terms do not fairly reflect the relative values ofthe assets which each of First Quantum and Adastra would be contributing to amerged company. • First Quantum's offer represents a significant discount to the currentmarket price of Adastra shares. Adastra also reiterates that, despite First Quantum's statements to thecontrary, the offer (based on First Quantum's closing price on February 24,2006) imputes a lower value to Adastra than does Mitsubishi's offer for aminority interest in the Kolwezi Project. The Adastra Board reiterates its unanimous recommendation that shareholdersreject First Quantum's hostile takeover bid and do not tender their shares tothe First Quantum Offer. Bernard Vavala, Chairman, said: "The Adastra Board remains focused on one goal,achieving value for its shareholders. First Quantum's offer significantlyundervalues Adastra's assets. The offer is opportunistic and disadvantageous toAdastra shareholders. First Quantum's offer represents a discount to Adastra'scurrent share price and a majority of our shareholders have said they supportthe Board in rejecting the bid. First Quantum would be well advised to focus onthe inadequacy of its offer as opposed to extraneous matters." 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, andthe possible rehabilitation of the Kipushi zinc mine in the DRC. Adastra'sgrowth strategy emphasizes the creation of shareholder value through thedevelopment of world-class resources in stable or stabilizing politicalenvironments. 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' N1 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 and 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: LondonAdastraTim Read, President and Chief Executive OfficerTel.: +44 (0)20 7257 2040 RothschildCharles Mercey / Stuart VincentTel.: +44 (0)20 7280 5000 Parkgreen CommunicationsJustine Howarth / Annabel LeatherTel.: +44 (0)20 7493 3713 North America 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 resource size,production capacity, net present value, its overall economic potential and theavailability of project financing, and involve known and unknown risks,uncertainties and other factors which may cause the actual results, performanceor achievements expressed or implied by such forward-looking statements to bematerially different. Such factors include, among others, risks anduncertainties relating to political risks involving the Company's operations inthe DRC and the policies of other nations and organizations towards companiesdoing business in such jurisdictions, the inherent uncertainty of production andcost estimates and the potential for unexpected costs and expenses, fluctuationsin the price of copper and cobalt, conclusions of economic evaluations, changesin project parameters as plans continue to be refined, the inability or failureto 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, 2005 and Reports on Form 6-K filed with theSecurities and Exchange Commission and the Canadian Securities Administratorsand available at www.sedar.com. 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