20th Feb 2008 18:15
First Quantum Minerals Ld20 February 2008 NEWS RELEASE 08-04 February 20, 2008 www.first-quantum.com FIRST QUANTUM MINERALS RECEIVES NOTICE FROM DRC MINING CONTRACT REVIEW IN REGARD TO THE KOLWEZI TAILINGS PROJECT First Quantum Minerals Ltd. ("First Quantum" or the "Company", TSX Symbol "FM",LSE Symbol "FQM") announces that on Feb 19, 2008, it received a letter from theDemocratic Republic of Congo Minister of Mines advising of the results of theCongolese Government's Mining Contracts Review Commission revisitation of theKingamyambo Musonoi Tailings Sarl ("KMT") Mining Convention ("Convention"). KMTis owned by First Quantum 65%, La Generale Des Carrieres et Des Mines ("Gecamines") 12.5%, Industrial Development Corporation of South Africa ("IDC")10%, the International Finance Corporation ("IFC") 7.5% and the Government ofthe Democratic Republic of Congo 5% ("RDC"). The Convention was one of over 60 contracts reviewed by the government. A translation of the letter indicates the following: 1. Reproaches 1.1 The creation of KMT SARL has been carried out in breach of the provisions of the Royal Arrete of 22 June 1926 on SARL, in particular article 1.1, as the Decree Ndegrees 04/020 of 15 March 2004 authorising the creation of KMT SARL is dated before the incorporation of the company (authentification of the articles of association of 16 March 2004); 1.2 The terms of the tender offer's submission have been breached, in particular in relation to the price of the transfer of the mining rights from Gecamines to KMT lowered from 130 millions USD to 15 millions USD, of which 5 millions USD have been paid as of today; 1.3 The shares have been set arbitrarily in the absence of a feasibility study capable of identifying the resources and of determining the participation of each party in the share capital; 1.4 Since the conclusion of this partnership in 1997, the prospecting works only begun in 2007, thus leading to the freezing of the deposits; 1.5 The grants of the majority of the shares to CMD was made against a simple undertaking to search for the financing, the repayment of which is however to be borne by the joint venture. 2. Position of the Government The Government requests the termination of this contract to the best interest ofeach party. Considering the arrival of the new partner First Quantum Ltd, this partnershipcan however be maintained, under the following conditions: - to regularise the incorporation of the company in strict conformity to the Congolese law on commercial companies; - to respect the terms of the initial tender offer and its implications, in particular the up-front payment (pas de porte); - to transmit to the Government the feasibility study of the project. This feasibility study shall, inter alia, identify and evaluate the real contribution of the parties to the company in order to achieve an equitable allocation of the shares; - to propose a schedule of the social actions which have a visible impact; - Gecamines must have an active role in the day-to-day management of the company. The Company has advice that the Convention is valid and binding and that KMT hascomplied with all its terms. The Convention provides a dispute resolutionmechanism through international arbitration. The Company will liaise with itsfinancially contributing partners the IFC and IDC and, as invited by theMinister, will through KMT respond to the letter shortly and arrange to meetwith him in due course. Further information will be provided as it becomes available. On Behalf of the Board of Directors 12g3-2b-82-4461of First Quantum Minerals Ltd. Listed in Standard & Poor'sG. Clive Newall Sedar Profile #00006237President For further information visit our web site at www.first-quantum.com 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: [email protected]. Or Harriet Pask or Sarah MacLeod Hogarth Partnership Ltd. Tel: +44 (0) 20 7357 9477 The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Certain information contained in this news release are "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 prices of gold, copper, cobalt andsulphuric acid, estimated future production, estimated costs of futureproduction, the Company's hedging policy and permitting time lines, involveknown and unknown risks, uncertainties, and other factors which may cause theactual results, performance or achievements of the Company to be materiallydifferent from any future results, performance or achievements expressed orimplied by such forward-looking statements or information. Such factorsinclude, among others, the actual prices of copper, gold, cobalt and sulphuricacid, the factual results of current exploration, development and miningactivities, changes in project parameters as plans continue to be evaluated, aswell as those factors disclosed in the Company's documents filed from time totime with the Alberta, British Columbia, and Ontario Securities Commissions, theAutorite des marches financiers in Quebec, the United States Securities andExchange Commission and the London Stock Exchange. ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
FQM.L