First Quantum pursues Adastra

18 Jan 2006 07:01

First Quantum Minerals Ld18 January 2006 Not for release, publication or distribution in whole or in part in or into Australia or Japan. NEWS RELEASE 06-02 January 18, 2006 www.first-quantum.com FIRST QUANTUM MINERALS ANNOUNCES A SHARE EXCHANGE OFFER VALUED AT C$189.3 MILLION TO ACQUIRE ALL OUTSTANDING SHARES OF ADASTRA MINERALS AT AN IMPLIED PRICE OF C$2.23 PER SHARE - OFFER REPRESENTS A 24% PREMIUM TO ADASTRA MINERALS SHAREHOLDERS - (ALL DOLLAR AMOUNTS ARE STATED IN CANADIAN $, STERLING EQUIVALENTS ARE CALCULATED AT £1: $2.06) First Quantum Minerals Ltd. ("First Quantum", TSX Symbol "FM", LSE Symbol "FQM")announced today that it will make a share exchange take-over bid (the "Offer")to acquire all of the outstanding common shares of Adastra Minerals Inc. ("Adastra" TSX:AAA; AIM:AAA) at an implied offer price of approximately $2.23(£1.08) per share (based on First Quantum's January 17, 2006 closing price onthe Toronto Stock Exchange of $38.94) in a transaction which values thefully-diluted share capital of Adastra at approximately $189.3 million (£91.9million). Under the Offer Adastra common shareholders will be entitled toreceive 1 First Quantum Common Share for each 17.5 Adastra Common Shares held.Based on the number of fully-diluted Adastra Common Shares, as publiclydisclosed, under the Offer, First Quantum will issue up to an aggregate ofapproximately 4.9 million First Quantum Common Shares to Adastra shareholders. Based on the closing price of First Quantum's Common Shares on the Toronto StockExchange on January 17, 2006, the implied offer price represents a premium ofapproximately 24% over the Adastra closing price on the Toronto Stock Exchangeof $1.80 as at January 17, 2006. The implied offer price represents a 31%premium over the $1.70 Adastra equity financing completed in December 2005. Adastra is an international mining company currently developing several mineralassets in Central Africa, including the Kolwezi Copper-Cobalt Tailings Projectand the Kipushi Copper Zinc Mine in the Democratic Republic of Congo ("DRC"). "First Quantum's strategy is to develop significant copper resources in Zambia,the DRC and elsewhere in Africa. Over the last ten years it has grown to becomea significant copper and gold producer with a number of further developmentopportunities. The proposal to merge First Quantum and Adastra will allow themanagement of First Quantum to apply its skills to the projects owned by Adastra" said Mr. Philip Pascall, Chairman and CEO of First Quantum. "We see the mergerof the two companies as offering major benefits to both groups of shareholders." "We believe our offer represents full and fair value and reflects the benefitsof expected synergies from the deal. First Quantum's shares provide asignificantly lower risk profile and better liquidity for Adastra shareholders." First Quantum has had extensive experience in successfully developing, financingand operating major mines and tailing deposits in the Copperbelt region of theDRC. In recent years, First Quantum has processed the tailings at Bwana Mkubwaand has developed and now operates the open pit at Lonshi in the DRC. FirstQuantum is at an advanced stage in finalising its plans to develop a major newmine, known as Frontier, in the DRC. Through these operations, First Quantum hasacquired considerable practical experience in working in the DRC and with theDRC Government. First Quantum has also developed, on time and on budget, theKansanshi mine in Zambia which is now producing copper at the rate ofapproximately 120,000 tonnes per annum. This experience will be of considerablebenefit in ensuring Adastra's projects are developed and financed effectivelyand economically. "We look forward to Adastra's shareholders participating in the enlarged group.We believe that First Quantum's management has the drive, commitment andexperience to ensure that Adastra's various opportunities, in particular thetailings project at Kolwezi, are developed in an economical and expeditiousmanner. This would be to the benefit of both groups' shareholders." said Mr.Pascall. "But for Adastra's shareholders there is an additional plus," he added"they will be able to share in First Quantum's existing operations, as well asour new projects, while waiting for the Kolwezi project to come on stream. Inparticular, they will benefit from First Quantum's strong cash flow and itsattractive dividend policy." First Quantum has engaged RBC Capital Markets as financial advisor in connectionwith the Offer. RBC Capital Markets will act as dealer manager for the Offer inCanada and the United States. Numis Securities Limited acts as NominatedAdviser and Broker to First Quantum in the United Kingdom. Full details of the Offer will be included in a formal offer and take-over bidcircular to be mailed to Adastra shareholders. First Quantum will formallyrequest a list of Adastra's shareholders today and expects to mail the take-overbid circular to Adastra's shareholders as soon as reasonably practicablefollowing receipt of the shareholder list. The Offer will be open for acceptancefor 35 days. The Offer will be subject to certain conditions of completion,including receipt of all necessary regulatory approvals, absence of materialadverse changes and acceptance of the Offer by Adastra shareholders owning notless than two-thirds of the Adastra Shares on a fully-diluted basis. Once thetwo-thirds percentage acceptance level is met, First Quantum intends, but is notrequired, to take steps to acquire all remaining Adastra Shares in accordancewith applicable law. The formal offer and take-over bid circular will be filed on SEDAR and on EDGAR.Adastra Shareholders should read the circular and any other materials relatingto the Offer, copies of which can be obtained at the SEDAR website atwww.sedar.com or on the EDGAR website at www.sec.gov. First Quantum will host a conference call at 10:00am EST today, to discuss theproposed transaction and have posted a presentation on their web site(www.first-quantum.com) pertaining to the Offer. Parties accessing this facilityfrom the UK are advised that the conference call is directed solely at (i)investment professionals falling within Article 19(5) of the Financial Servicesand Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (ii) highnet worth companies etc falling within article 49(2) of the Order. The call canbe accessed toll free in North America by dialing 1-888-789-0089 andinternationally by dialing 1-416-695-5259. The call will also be webcast fromwww.first-quantum.com. A replay of the conference call will be archived for oneweek and can be accessed toll free in North America by dialing 1-888-509-0081and internationally by dialing 1-416-695-5275. About First Quantum Minerals First Quantum is a growing mining and metals company whose principal activitiesinclude mineral exploration, development and mining. The Company produces LMEgrade "A" copper cathode, copper in concentrate, gold and sulphuric acid. TheCompany'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 operatesthe 100% owned Lonshi open pit copper mine which provides oxide copper ore forprocessing at Bwana Mkubwa, a 100% interest in the newly discovered Frontiercopper-cobalt deposit, and 11,000 sq/km of exploration rights. In Mauritania,First Quantum is developing the 80% owned Guelb Moghrein copper gold deposit. Important Notice Persons who are resident in the United Kingdom should note the following threepoints: i. The Offer will not be subject to the provisions of the United KingdomTakeover Code. ii. The formal offer and take-over bid circular will not constitute aprospectus for the purposes of the Prospectus Rules published by the FinancialServices Authority of the United Kingdom (the "FSA"). Accordingly, the formaloffer and take-over bid circular will not be reviewed or approved by the FSA orby London Stock Exchange plc and it is not intended that any action will betaken by First Quantum, by Numis Securities or by RBC entities that would permita public offer of First Quantum shares to be made in the United Kingdom whichwould require an approved prospectus in accordance with the United KingdomFinancial Services and Markets Act 2000 ("FSMA") and the Prospectus Rules. iii. The Offer will be made to, and deposits of Adastra shares will beaccepted from, only those shareholders in the United Kingdom who are (or who areacting on behalf of), and who are able to establish to the satisfaction of FirstQuantum that they are (or are acting on behalf of): "qualified investors" withinthe meaning of section 86(7) of FSMA, or (ii) persons to whom the Offer mayotherwise be made or directed without an approved prospectus having first beenmade available to the public in the United Kingdom. UK shareholders receivingthe formal offer and take-over bid circular should consult with their legaladvisors to determine whether they are eligible as "qualified investors" or areotherwise able to receive and accept the Offer. The content of this press release, which has been prepared by and is theresponsibility of First Quantum, has been approved by Numis Securities Limited,Cheapside House, 138 Cheapside, London England EC2V 6LH, solely for the purposesof section 21 of the United Kingdom's Financial Services and Markets Act 2000.Numis Securities Limited is acting exclusively for First Quantum in connectionwith the Offer and no one else and will not be responsible to anyone other thanFirst Quantum for providing the protections afforded to clients of NumisSecurities Limited nor for providing advice in relation to the Offer or anyother matter referred to in this press release. This announcement does not constitute or form part of any offer to sell orinvitation to purchase any securities or solicitation of an offer to buy anysecurities, pursuant to the Offer or otherwise. The Offer will be made solely bythe formal offer and take-over bid circular, which will contain the full termsand conditions of the Offer, including details of how the Offer may be accepted. This announcement is for information purposes and is not a substitute for theformal offer and take-over bid circular. First Quantum plans to file with theU.S. Securities and Exchange Commission a Registration Statement on Form F-80,which will include the offer and take-over bid circular, and a tender offerstatement on Schedule 14D-1F. Adastra Shareholders are urged to read thecircular and any other materials relating to the Offer, including theregistration statement on Form F-80 and the tender offer statement on Schedule14D-1F, when these documents become available, because they will containimportant information. Copies of the circular and other materials relating tothe Offer can be obtained when they become available free of charge at the SEDARwebsite at www.sedar.com or on the EDGAR website at www.sec.gov. This press release contains forward-looking statements. The words "expect","will", "intend", "estimate" and similar expressions identify forward-lookingstatements. Forward-looking statements are necessarily based upon a number ofestimates and assumptions that, while considered reasonable by management, areinherently subject to significant business, economic and competitiveuncertainties and contingencies which could cause actual results to differmaterially from the future results expressed or implied by the forward-lookingstatements. Such statements are qualified in their entirety by the inherentrisks and uncertainties surrounding future expectations. These risk factorsinclude, but are not limited to: realization of operational synergies, relianceon Adastra's publicly available information which may not fully identify allrisks related to their performance, success in integrating the retaildistribution systems, and the integration of supply chain management processes,as well as other risk factors listed from time to time in First Quantum'sreports, comprehensive public disclosure documents including the AnnualInformation Form, and in other filings with securities commissions in Canada (onSEDAR at www.sedar.com) and the United States (on EDGAR at www.sec.gov). On Behalf of the Board of Directors 12g3-2b-82-4461of First Quantum Minerals Ltd. Listed in Standard and Poor'Sedar Profile #00006237Philip PascallChairman & CEO For further information visit our web site at www.first-quantum.com North American contact: Geoff Chater or Bill Iversen 8th Floor, 543 Granville Street, Vancouver, British Columbia, Canada V6C 1X8 Tel: (604) 688-6577 Fax: (604) 688-3818 Toll Free: 1 (888) 688-6577 E-Mail: info@first-quantum.com United Kingdom contact: Clive Newall, President1st 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@first-quantum.com. or Carina Corbett, 4C-Burvale, Tel: + 44 20 7907 4761 The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Certain of the information contained in this news release constitute "forward-looking statements" within the meaning of the Private SecuritiesLitigation Reform Act of 1995. Such forward-looking statements, including butnot limited to those with respect to the prices of gold, copper 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. Such factors include, among others, the actualprices of copper, gold and sulphuric acid, the factual results of currentexploration, development and mining activities, changes in project parameters asplans continue to be evaluated, as well as those factors disclosed in theCompany's documents filed from time to time with the British Columbia SecuritiesCommission and the United States Securities and Exchange Commission. ENDS This information is provided by RNS The company news service from the London Stock Exchange