Falconbridge Limited

Falconbridge Limited

August 08, 2006 18:53 ET

Falconbridge Board of Directors Recommends Shareholders Tender to Xstrata Offer

TORONTO, ONTARIO--(CCNMatthews - Aug. 8, 2006) - The Board of Directors of Falconbridge Limited ("Falconbridge") (TSX:FAL)(NYSE:FAL) announced today that it recommends that Falconbridge shareholders tender their shares to the offer made by the Anglo-Swiss mining company, Xstrata plc.

Under the terms of its offer amended July 19, 2006, Xstrata offered to purchase all of the outstanding common shares of Falconbridge it does not already own for Cdn$62.50 per Falconbridge share. The offer expires at 8:00 p.m. (Toronto time) on August 14, 2006 and, among other things, remains conditional on approval from Xstrata shareholders.

With the termination of the Support Agreement between Inco and Falconbridge, Falconbridge's Board of Directors examined alternatives for the Company, including the possibility of other potential acquirers of Falconbridge. The Board is satisfied that it is unlikely that an offer more attractive than Xstrata's will emerge.

"Xstrata currently owns 24.5% of Falconbridge and since its offer is for any or all shares of Falconbridge, it appears likely that it will attract sufficient shares to gain effective control of Falconbridge on August 14," said Derek Pannell, Falconbridge's Chief Executive Officer. "Although Xstrata has consistently stated its desire to own 100% of Falconbridge, there can be no assurance that shareholders who do not accept the Xstrata offer on or before August 14, 2006 will be able to sell their shares to Xstrata for cash at Cdn$62.50 at some later date. Accordingly, the Falconbridge Board of Directors recommends that shareholders tender their shares to this offer in order to realize the value of their Falconbridge shares."

"Furthermore, I believe Xstrata is a well-run company that values both the physical assets and the human expertise within Falconbridge," said Pannell. "The commitments Xstrata announced on July 25 relating to locating Xstrata Nickel as well as copper and zinc offices in Toronto, job protection, research and development and continued investment in Canada are reassuring to Falconbridge employees."

Falconbridge Limited is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel orebodies. It employs 14,500 people at its operations and offices in 18 countries. Falconbridge's common shares are listed on the New York Stock Exchange (FAL) and the Toronto Stock Exchange (FAL). Falconbridge's website can be found at www.falconbridge.com.


Certain statements contained in this News Release are forward-looking statements (as defined in applicable securities legislation). Inherent in forward-looking statements are risks and uncertainties well beyond our ability to predict or control. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this News Release.

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