8th Feb 2006 10:34
Adastra Minerals Inc08 February 2006 NEWS RELEASE Adastra Indaba Conference Presentation Trading: TSX and AIM: AAA London, UK (February 8, 2006) - At today's Indaba Conference in Cape Town, SouthAfrica, Tim Read, President and Chief Executive of Adastra Minerals Inc. ("Adastra" or the "Company"), gave a presentation in which he included an updateon the Kolwezi Tailings Project ("Kolwezi Project"). Definitive Feasibility Study The Kolwezi Project Definitive Feasibility Study ("DFS") is well advanced andscheduled to be completed in early March 2006. Management anticipates it willdefine a project with annual production capacity of approximately 5,900 tonnesof cobalt and 33,200 tonnes of copper. These annual production estimates aremore than 7% higher for cobalt and 10% higher for copper than the estimatesAdastra announced in December 2004. Total project capital costs (includingowners' costs, engineering, procurement and construction fees and contingencies,insurance, first-fill and spares) are anticipated to be less than US$350 millionin December 2005 real terms. Management believes that the higher production estimates will more than offsetthe operating and capital cost increases expected to be included in the DFS whencalculating the net present value of the Kolwezi Project. Financing As recently announced, Adastra has mandated the Royal Bank of Scotland as seniorarranger for an untied commercial bank tranche of the Kolwezi Project financingfor US$60-75 million with an eight year maturity and has mandated the IndustrialDevelopment Corporation of South Africa Limited and Investec Bank Limited toco-arrange a South African export credit tranche of the project financing forUS$80-120 million with a ten year maturity. In addition, other bilateral and multilateral lenders have provided expressionsof interest in providing senior and subordinated loans amounting to in aggregatemore than US$150 million. Advanced negotiations for a capital overrun facilityof US$30 million are underway with two public sector lenders. Adastra expectsto start lender due diligence and detailed documentation immediately followingcompletion of the DFS in early March 2006. Management has also been activelyinvestigating means of raising project equity without the need to issue newAdastra shares, although there can be no certainty that this will be achieved. Off-take agreements Negotiations are well advanced to sell all of the copper production andapproximately 50% of the cobalt production under long-term contracts. "We have made significant progress in developing the Kolwezi Project" said TimRead, President and Chief Executive of Adastra. "Technical and financialwork-streams are on track to achieve our goal of beginning construction by theyear-end." Hostile Take-Over Bid Tim Read will also take the opportunity to reiterate the view of the Board ofDirectors of Adastra and its financial advisers that the opportunistic andhostile bid made for the Company by First Quantum Minerals Ltd ("First Quantum")significantly undervalues the Company. The offer to Adastra shareholders of 1First Quantum share for every 171/2 Adastra shares would give Adastrashareholders approximately 7% of the combined company, a derisory shareholdingin an enlarged group when compared with the significant contribution that theKolwezi Project would make to the production, profitability, resources andreserves of an enlarged group. As previously announced, Adastra shareholders who, in aggregate, hold more than50% of Adastra's issued share capital have advised the Board that they do notfind First Quantum's offer attractive and would support the Board in rejectingthe offer. A copy of the presentation will shortly be available on Adastra's websitewww.adastramin.com. ENDS Contact us: London Tim Read Cathy Malins / Annabel LeatherChief 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: [email protected] E: [email protected] North America Martti KangasThe Equicom GroupT: +1 416 815 0700 x. 243 +1 800 385 5451 (toll free)F: +1 416 815 0080E: [email protected] 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. Notes to editors; 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 of 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 scheduled to be completed in early March 2006.If this study is favourable, construction is expected to commence beforeyear-end, with first production in mid 2008 and a mine life of around 50 years. 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. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AAA.L