Shareholder Rights Plan

1 Dec 2005 07:02

Adastra Minerals Inc01 December 2005 Adastra's Board Approves Shareholder Rights Plan Trading: TSX and AIM: AAA LONDON, U.K. (December 1st, 2005) Adastra Minerals Inc. ("Adastra" or the "Company") today announced that its Board of Directors has approved the adoptionof a shareholder rights plan (the "Plan") as part of its procedures for dealingwith any parties who may wish to acquire control of the Company by way of atake-over bid or other transaction. The Plan is intended to ensure allshareholders of the Company are treated fairly in any transaction involving apotential change of control of the Company, and is consistent with the Board'scommitment to maximise shareholder value. "We believe it is prudent to protect the interests of all shareholders if anunsolicited bid were to be made to secure control of Adastra," said Tim Read,CEO of Adastra. "This is particularly necessary during this crucial period inthe development of the Kolwezi Tailings Project. We are expecting to completeboth the Definitive Feasibility Study and the Environmental and Social ImpactAssessment by early March and close the project financing in the second half ofnext year. This coming year should, therefore, be a period of considerableactivity and value addition for Adastra." The Plan has been adopted in order to provide the Company's Board of Directorswith sufficient time to assess and evaluate any take-over bid or other controltransaction and to explore and develop alternatives that maximise shareholdervalue and to give shareholders adequate time to decide. Although the Plan will take effect immediately, the Company's intention is toask its shareholders to ratify the Plan at its next annual meeting ofshareholders. The Plan will expire if that ratification is not obtained withinsix months. If approved, the Plan will continue in effect until the annualmeeting of shareholders in 2009. The Plan is similar to other shareholder rights plans adopted by Canadiancorporations. Until the occurrence of certain specific events, the rights willtrade with the common shares of the Company and be represented by the sharecertificates for such shares. The rights become exercisable only when a person,including any party related to it or acting jointly with it, acquires orannounces its intention to acquire 20 percent or more of the outstanding commonshares of the Company without complying with the "Permitted Bid" provisions ofthe Plan. Should a non-permitted acquisition occur, each right would entitleeach holder of common shares (other than the offeror or certain parties relatedto it or acting jointly with it) to purchase additional common shares of theCompany at a 50 percent discount to the market price at the time. It is not the intention of the Plan to prevent take-over bids. Under the Plan,a Permitted Bid is a bid made to all shareholders on identical terms andconditions that is open for at least 60 days. If at the end of 60 days morethan 50% of the outstanding shares, other than those owned by the offeror orcertain parties related to it or acting jointly with it, have been tendered, theofferor may take up and pay for the shares but must extend the bid for a further10 business days to allow all other shareholders to tender. 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 DRC. Adastra'sgrowth strategy emphasizes the creation of shareholder value through thedevelopment of world-class resources in stable or stabilizing politicalenvironments. Contact us: Adastra in London Tim 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 Adastra in North America Martti 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